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Instead of harping on the issue of low freight rates, the local maritime
sector should put extra focus on improving efficiency and introducing
value-added services.
United Arab Shipping Agency Co Malaysia Sdn Bhd country general manager
Desmond Yong said although Malaysia's freight rate was one of the lowest in
the region, it was only one of the few factors that could attract shipping
lines to the ports.
“As Port Klang is traditionally a space top up and containers positioning
hub for shipping lines, it is also important for us to have a strong
transhipment network which can build Port Klang into South-East Asia's
transhipment hub,” he said.
“Transhipment, cargo consolidation and value-adding activities can increase
export and import volume.
“We should also concentrate on attracting more shipping lines to locate
their regional offices in Malaysia. That will strengthen Port Klang's
position as a hub port.”
Yong also said government agencies and key industry players' performance in
terms of effective policies and operational efficiency should be benchmarked
against their counterparts in hubs like Singapore and Hong Kong.
He added that local exporters must focus more on efficiency, innovation,
quality, value-added services and branding instead of low costs.
“Malaysia is already on its way to being recognised as a hub for shipping
lines for top up and positioning,” he said.
“But we must quickly build upon other key factors which could attract more
shipping lines and feeder operators.”
Barwil Unitor Ships Service Malaysia managing director Winston W.F. Loo said
Malaysian freight rates were competitive compared with neighbouring
countries.
“As far as direct callers are concerned, the rates, on average, are quite
attractive.
“Of course, there are lines that charge rates which are slightly higher out
of Singapore by 2% to 3%, but I believe that is negligible.
“Compared with China, our rates here are lower by 6% to 12%,” he said.
According to Loo, Malaysia should look at Singapore and learn how to achieve
a high level of efficiency and productivity and not be bogged down with
trivial issues such as freight rates.
“This is because we have local cargo produced right here in our own country
and Singapore does not. The main issue which we need to address is how to
ensure that more and more of our cargo are routed via our own ports,” he
said.
He added that high volumes of cargo, competitive pricing by terminals, other
landside activities and high productivity levels were factors that attracted
shipping lines to ports.
Maritime Institute of Malaysia research fellow Nazery Khalid said the
decision by shipping lines to call at ports was based on various factors
involving economics, trade, ports, shipping, and geo-strategic and even
political reasons.
It does not solely depend on freight rates.
“Nevertheless, freight rates cannot be divorced from these elements but are
influenced by them.
“Profit projection, risk assessment, cargo space onboard ships, frequency of
ship calls, intensity of competition, and bullishness and bearishness on
trade and economic prospects are all vital in the determination of freight
rates,” he said.
Currently, according to Nazery, there is a shortage of space for Malaysian
hinterland cargo as local tonnage is not sufficient for local trades
(short-haul trips).
“The fact that MISC does not have sufficient tonnage to operate on its own
in the major trade routes and has to rely on space-sharing alliance reflects
this situation. In addition, local ship owners prefer long hauls in mainline
trades as they are more profitable.
“These contribute to the shortage of space in short-haul trades, for example
to Asean countries, and hence the high freight rates.
“Our rates are generally lower than some neighbouring nations, but are
higher for certain trades. No doubt shippers want low rates, but over and
above, they also want good service from shipping lines,” he said.
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