CHEAPER GOODS IN SABAH, SARAWAK

Exemption from cabotage policy means reduced shipping costs

THE phrase “better to order from KL” may soon be outdated for people in Sabah, Sarawak or Labuan, who want to purchase certain items in bulk.

Organisers of major events would normally buy items like Tshirts from Kuala Lumpur as it would be cheaper than to purchase locally.

Not only T-shirts, but other mass-produced retail items are also priced higher in the two states and Federal Territory.

The reason behind this is the lack of manufacturers and supply of cheaper materials and machines needed to produce the items.

There’s hope yet, though, as the exemption of Sabah, Sarawak and Labuan from the cabotage policy from June 1 may turn things around.

Costs were normally added by the shipping industry and passed down to the end user, said a retired Labuan based importer.

“Removal of the protectionist policy may allow for a more competitive and cheaper shipping industry plying the domestic routes.

“This can happen as foreign vessels will be able to stop by here and move on to other ports in the peninsula,” he said.

With the cabotage policy, foreign vessels are only allowed to unload and return to their ports of origin.

The importer, who declined to be named, said however, the cabotage policy was not the only reason behind the discrepancies in prices of goods.

“We should also look at how the shipping industry run their operations as well as profiteering by certain parties,” he said.

In the past, importers had complained about surcharges such as for delays in ports in the 1980s, and even for congestion in the 1970s.

“In the 1970s, when there was global congestion at ports because of the United States-Iran conflict, shippers charged 60 sen per tonne for their cargo,” he said.

When the congestion eased, however, shippers continued to charge the sum.

The same thing happened in the mid-1980s.

“Shippers claimed ports were unable to handle their cargo fast enough and they imposed a surcharge of RM150 per 20-foot container.

“But over the years, when the ports improved their services, the surcharge stayed,” he said, but noted it was eventually removed.

It was all about sincerity, he said and described the decision announced by Prime Minister Datuk Seri Najib Razak as a “bold one”.

“The local shipping industry may not like it, but the move will benefit the people.”

Sabah Special Tasks Minister Datuk Teo Chee Kang had also said the move had returned a fundamental right for the state.

The decision honours the InterGovernmental Report that was prepared before the formation of Malaysia.

The cabotage policy was seen as an interference to the shipping policy in Sabah when it was implemented some 30 years ago.

Moving on, the focus for Sabah should be on making the Sapangar Bay Container Port a transshipment hub like Port Klang and Tanjung Pelepas in Johor.

To realise this, it needs an anchor shipping line that makes the port its operational base.

Things can only get better from there.

Removal of the protectionist policy may allow for a more competitive and cheaper shipping industry plying the domestic routes.