Ex­emp­tion from cab­o­tage pol­icy means re­duced ship­ping costs

New Straits Times - - News -

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.

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