Home' Ships and Shipping : August 2009 Contents Ports and shipping as crucial facilitators
In a matter of a few decades, Malaysia has transformed its
economy from one that was agricultural and commodities-
dependent to one which is based on manufacturing and trade.
In 2008, the country's total trade was valued at US$335 billion,
an increase of 6.8 percent from 2007. Exports rose by 9.6 percent
to US$187 billion, while imports increased by 3.3 percent to
US$147 billion, resulting in a trade surplus of US$40 billion.
Malaysia is now among the top 20 largest trading nations in the
world, with a share of approximately 1.4 percent of global trade.
The phenomenal growth in global trade has had a huge impact
on the development of ports and shipping in Malaysia, spurring
investment and the development of various infrastructure projects
to support increasing trade with the world's nations. This is
underlined by the estimate that 95 percent of Malaysia's
international trade, the lifeblood of its economy, is being carried
through the oceans via its international seaports.
The evolution of ports in Malaysia
The dramatic transformation and rapid industrialisation of
Malaysia's economy over the last few decades has made it into one
of the world's major trading nations. Ports went through intensive
growth and tremendous development during the period of rapid
economic development in the country and the South East Asian
region in the 1980s and 1990s.
In Malaysia, ports have evolved beyond places where ships load
and unload cargoes and passengers. The country's ports have
assumed a critical role in the overall pattern of trade and transport,
providing a link between the shipping service and the inland
Malaysia's ports today, featuring world-class facilities, act as crucial
points of interface with other transport modes such as road, rail, river
and air. Port operations in Malaysia, as is the case worldwide, have
entered into a phase of sophisticated development with
computerisation of container terminal operations. There are dynamic
and revolutionary changes that are taking place in the various aspects
of container sizes, ship sizes, equipment, intermodal transport, IT,
data exchange and communication.
Tanjung Pelepas Port, Malaysia
There is keen competition between ports in the region to attract
cargo and to tender port services. This in turn exerts pressure on
ports to keep pace with technological advances and to provide
The country's major seaports in Penang, Port Klang and
Tanjung Pelepas are located along the coast of the Straits of
Malacca featuring excellent facilities and connectivity.
Malaysia has taken an approach emphasising the expansion of
capacity to provide a supply-driven environment, upgrading the
equipment and facilities of its ports to ensure efficiency.
In addition, niche ports have been established in the form of
Port Klang as the national load centre and Port of Tanjung Pelepas
as the transhipment hub, which have aggressively spread their
wings to enhance their global connectivity. All these bear
testimony to Malaysia's tremendous rise and growing clout as a
The tremendous growth in cargo throughput in Malaysian ports
and in commercial shipping activities in the country over the years
can be attributed to the relentless efforts made by the Malaysian
Government and its agencies. All these are done without
undermining the need for the nation's ports and carriers to
develop competence, competitiveness and economic efficiency.
To achieve the objective of enhancing the competitiveness and
attractiveness of Malaysian ports, the government has undertaken
the following steps:
• Ensuring a supply-driven environment by providing ample
capacity in ports to mitigate congestion and reduce waiting times;
• Developing services such as feedering and bunkering at local ports,
and other ancillary services such as banking, insurance and legal;
• Facilitating supply of adequate facilities to accommodate large
vessels and increasingly larger types of ships;
• Creating a commercially competitive environment to provide
value-added logistics services and infrastructure to encourage
• Creating a conducive environment to attract main line
operators, such as offering shipping lines the opportunity to buy
equity in ports;
• Promoting ship financing by setting up financial institutions to
assist the maritime community via competitive financing;
• Designating Port Klang as the national load centre in 1993 to
serve a hinterland with a large cargo base;
• Designating Port of Tanjung Pelepas as a transhipment hub port.
In addition to port development, efforts have also been undertaken
to facilitate and promote trade. Free commercial zones have been
created at ports to simplify documentation processing and procedures
for cargo consolidation and to attract value-added services.
Several ports use community-based EDI systems and a
nationwide electronic trade declaration system allowing users to
link to the customs information system, which is in place and is
continuously enhanced to facilitate more efficient trade.
Merchant shipping in Malaysia
Malaysia embarked on the journey towards setting up its own
commercial shipping line in the late 1960s to serve its own exports
and to address the problem of balance of payments as a result of
the absence of a national carrier. The impetus also came from the
unhappiness of local shippers over the rates charged by shipping
conferences handling most of Malaysian cargoes.
The establishment of the national carrier, MISC, in 1968 with
government equity participation marked a milestone in the
development of modern commercial shipping in Malaysia.
Petronas purchased a 29 percent stake in MISC and took over its
management in 1997, marking another momentous milestone in
the company's transformation into a leading liner. Its growth was
further enhanced by the acquisition of Konsortium Perkapalan and
PNSL in 1998. MISC's merger with Petronas Tankers in the same
year boosted Petronas' stake in the company to 62 percent.
Today, MISC has grown into one of the world's largest shipping
operators with over 100 vessels. MISC has a modern,
well-diversified and relatively young fleet of 27 LNG tankers,
making it the world's single largest owner operator of LNG tankers.
Besides MISC, major commercial shipping companies such as
Malaysian Merchant Marine, Halim Mazmin, Nepline, Gagasan
Carriers, Global Carriers, Malaysia Bulk Carrier and Wawasan
Shipping also have modern and well-diversified fleets, plying the
world's oceans carrying all types of cargoes and loads. Some are
listed on Bursa Malaysia and most are members of the Malaysian
Shipowners' Association (MASA).
As of January 1, 2008, Malaysia had 392 vessels of 1,000GT and
above with a combined tonnage of 11.17 million DWT, making it
the twentieth largest controlled merchant fleet in the world.
The local shipping sector has benefited from a substantial rise in
the country's foreign trade and the rising demand for shipping
services. The cargoes carried by Malaysian ships consist mainly of
its export products, heading mostly to the country's largest trading
partners which include the US, Singapore, Japan, China, Taiwan,
Korea, Germany and the UK.
Malaysia has also made great strides in ship financing to
support the growth of the shipping sector. The establishment of
Bank Industri in 1979 was testimony to its intent to develop the
The bank earmarked shipping as a prime sector to benefit from
its loans provided at special rates and terms. The creation of a
shipping fund in 1992 was another show of support by the
government towards shipping. From the fund, US$2,250 million
was set aside for the ship financing facility, directly managed by
Bank Industri, and US$140 million for the Shipping Venture Fund.
In 1994, another US$84 million was added to the fund aimed at
financing expansion of shipyard capacity to build larger vessels. In
the 2000 budget, the government announced another US$280
million to replenish the fund.
These funds were made available to shipping players and,
further to this, a shipping venture capital company, Global
August 2009 SHIPS AND SHIPPING
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