Shippers explore ways to stay afloat
PUTRAJAYA: Shipping companies are exploring ways to stay afloat including through consolidation, said Transport Minister Datuk Seri Liow Tiong Lai.
He said mammoth shipping lines want to optimise the economies of scale to move more cargo on a single journey by deploying mega vessels.
“The challenging environment has spurred many shipping lines to consolidate their businesses to remain competitive.
“Consequently, the massive business consolidation among the shipping companies leads to the births of mega vessels,” he said at the launch of the marine cargo and container insurance scheme— iCargo+ — here yesterday.
He said mega vessels would have an impact on port infrastructure as facilities needed to be upgraded to both service and accommodate such vessels.
“Container vessels are not only becoming larger. They are becoming larger at a faster pace. It took close to 25 years for vessels to double in size from 3,000 to 6,000 twenty-foot equivalent units (TEUs),” he said.
Subsequently, vessels growing from 6,000 to 11,000 TEUs took only half that time and a mere 12 years for vessels to double again to 22,000 TEUs.
“This development presents significant impacts whereby policymakers will have to work harder to ensure the national ports keep pace with the industry by providing expandable port facilities,” said Liow .
He added that the total container throughput at Malaysian ports this year was at 24.81 million TEUs with a total of 158,640 ship calls.
“To maintain our competitive edge, we continue to invest in infrastructure and manpower development. However, such investments are necessary but insufficient,” he added.
Quantum Ivory Sdn Bhd chief executive officer Chua Hock Peng said iCargo+ offers Malaysian shippers peace of mind by lowering their operating cost as they only need to pay a single premium for cargo insurance while the container insurance is automatically covered at no extra cost.
He said the marine risk management company works closely with shipping lines in Malaysia as iCargo+ proves to be the best practice offering a win-win situation to logistics industry players. Ayisy Yusof