Penang freight forwarders see operations improving
They expect business to pick-up in the second quarter of this year
GEORGE TOWN: Penang’s freight forwarders are expecting business to pick up this year after hitting the bottom in 2015.
The Penang Freight Forwarders Association (PFFA) air freight chairman Jay Shanker told StarBiz that business should improve this year, with volume of cargo handled at the Penang International Airport (PIA) last year having improved slightly over 2015.
Shanker said the slowdown started four years ago, and 2015 was the worst year, compared to 2013 and 2014.
“The total volume of cargo handled for 2016 at PIA was 111,424 tonnes, compared to 109,422 (in the previous year).
“We had earlier forecast 103,000 tonnes to be handled for 2016, so the actual tonnage handled was a slight improvement. We expect a pick-up in the forwarding business in the second quarter of 2017,” he said.
PFFA has projected the total volume handled at PIA to hit 116,994 tonnes this year, up 5% from 2016.
Of the 111,424 tonnes, some 62,290 tonnes handled were exported, which was a drop of 4% from 64,916 in 2015.
The tonnage handled for import was 49,134 tonnes, up 9% from 44,506 tonnes.
“The global electronic and semiconductor market is still weak, so the electronic products exported from Penang has dropped. Electronic and semiconductor components comprise over 70% of the air cargo shipped out from Penang.
“There should be improvement in the business environment in the second quarter of the year. Freight rates should also increase due to better demand for forwarding services,” he said.
Current freight rate charges to the US have been maintained at around RM10 to RM15 per kg, depending on the destination in the US, and the season.
The charges to Europe were between RM8 to RM12 per kg, depending on the destinations in Europe, and the season.
Competition from Middle-Eastern airlines flying out of Kuala Lumpur International Airport (KLIA) continues to impact the volume of air cargo flown out of Penang.
“Penang-based companies send cargo by trucks to Kuala Lumpur so that the cargo can be flown out of KLIA using the Middle-Eastern airlines, which offer very competitive rates.
“Those companies with no urgency for the cargo to reach their destinations had also opted to ship via sea, which is cheaper than shipping by air.
“This has also impacted the slowdown on the volume of cargo handled at PIA,” he said.