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The Malaysia Shipowners Association (Masa) has reiterated that shippers
should not blame ocean freight charges for the high cost of goods
in Sabah.
"Ocean freight charges for imports into Kota Kinabalu from Port
Klang only constitute about 40 per cent (of total transport
costs), while that for exports out of Kota Kinabalu to Port Klang
constitutes barely 10 per cent. Therefore, the burden of shipping
cost on prices of goods is really much smaller than what has been
made out," said Masa executive secretary Captain Imtiaz Hussein at
a dialogue organised by the Sabah Bumiputera Chamber of Commerce
with various trade associations in Kota Kinabalu on Friday.
The dialogue was aimed at correcting the misperception that the
high cost of goods in Sabah was due to high charges imposed by
shipping lines.
Imtiaz, who led a six-man delegation from the association, said
the total logistic supply chain involves several interfaces
including haulage, forwarding and shipping agents, warehousing and
port handling charges which are not within the shipowners'
control.
"This (dialogue) is important to us because this flawed argument
was fundamental in advancing the claims by shippers in the state
who wanted the government to relax the national cabotage shipping
policy because of high shipping costs as the cause for the high
prices of goods in the state," he said.
"On this score, it is not for Masa to tell whether other
components costs in the total transportation are high or low, but
we feel the other costs must also undergo similar scrutiny by the
shippers." he added.
Imtiaz said a major component of the ocean shipping charge is the
bunker costs or costs for fuel oil used by ships.
Shipping lines all over the world apply bunker adjustment factor (BAF)
as a variable surcharge to the ocean shipping charge because of
the volatility in the prices of the fuel oil.
"We pointed out to the shippers (during the dialogue) that in view
of its price volatility and that fuel oil are a major component of
our operational cost, BAF is applied as a surcharge, meaning we
adjust the BAF according to market prices of fuel oil," Imtiaz
said.
The BAF surcharge is based on a formula, which relates to the
exposure of shipping lines on a per TEU (20-foot equivalent unit)
basis of the incremental bunker cost when the market bunker price
moves beyond agreed threshold.
"Masa also pointed out that unlike land transport providers and
even manufacturers who enjoy subsidised fuel, shipping lines do
not enjoy such benefits. Since bunker fuel is not subsidised, it's
therefore exposed to fluctuations in fuel oil prices."
The dialogue was attended by 19 trade associations including the
Federation of Sabah Manufacturers, the Sabah Timber Industry
Association and local government agencies, namely the Institute of
Development Studies and the Ministry of Industrial Development,
Sabah.
Imtiaz said Masa wants the shippers in Sabah to understand that
there are other cost components in what shippers eventually pay as
total transport costs. |
