M’sian shipping struggling to catch up, while ports ‘anchors aweigh’ from troubled waters
KUALA LUMPUR: Malaysia’s Maritime industry had a mixed development in 2022 with the shipping business slowly steaming in rough waters in 2022, attempting to recover from the hard knocks of the Covid-19 pandemic, and rebuilding it amid a lack of directional stability, but the ports have started gaining momentum.
The Malaysian ports, especially those with greater exposure to the global supply chain, are seen to be consistently improving its efficiency and capacity to compete with regional players while simultaneously embedding digitalisation.
The Malaysian Shipping Masterplan (MSMP) 2017-2022 was launched five years ago and is due for a review, but the industry is still falling short of its targets. This coupled with the pandemic that wrecked the supply chain has left the industry in limbo, or at least directionless.
According to a source from the Transport Ministry, MSMP has been extended to 2025 and the National Shipping and Port Council (NSPC) has been reactivated.
Maritime Institute of Malaysia (MIMA) Director of Research’s Office former senior researcher (Special Tasks) Ang Chin Hup said MSMP was developed by MIMA to improve ports and the shipping industry in the country.
“Over the last five years, the public and private sectors have worked hard to meet the targets,” he added. “We have seen the port sector do well, while the shipping sector has performed pretty averagely, and shipbuilding and ship maintenance has lagged far behind.”
He emphasised that the MSMP was in line with the global picture, maximising Malaysia’s competitive advantage, notably in utilising its strategic location adjacent to the Malacca Straits, with close to 80,000 vessels passing through on a yearly basis.
“We do not have market control, and it is well known that we are unable to compete with some
of the larger shipyards in South Korea and China due to their size, efficiency, and speed,” he pointed out.
On recent developments, Malaysia Shipowners’ Association (MASA) chairman Mohamed Safwan Othman said the Transport Ministry has revived the NSPC in September and appointed it to lead all six main sectors after a two-year hiatus
“MASA was given the lead on ship financing, however, we haven’t had the first meeting and the progress and updates on MSMP are pretty much based on the outcome and results of the NSPC,” he told Bernama.
Meanwhile, in response to the decline in Malaysian shipping tonnage and an increasing number of shipping businesses in distress, Ang said Malaysia still has shipping tonnage, but it is simply not commercial or feasible to go into international shipping.
He added that the lack of achievement was due to the Covid19 epidemic, which is one of the reasons why the industry’s growth has been stalled for two years.
Ang also emphasised the maritime industry is dealing with issues related to technology, digitalisation and human capital, and that the new MSMP must consider developing the entire ecosystem, which includes peripheral industries such as maritime legal systems, banking, financing, insurance, training and education, and should not be limited to port, bunkering or shipyard development.
He also alleged that local banks are not supportive of the industry since they do not perceive the practicality of the project or loan.
“The first question they asked was if you have any contracts,” he stressed, adding that local bankers had a better understanding of many other industries than the shipping business.
Bunkering on the other hand is a very profitable business and is handled in US dollar, but the chances for optimisation are limited, he said.