Malaysian ports unaffected despite firms shipping south, minister says
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KUALA LUMPUR, Sept 21 — Datuk Seri Liow Tiong Lai insisted today that Malaysian ports will remain competitive, although five major global shipping firms under the Ocean Alliance have ditched Port Klang for Singapore in April.
The transport minister said the move would only result in a “short-term ripple effect”, and Port Klang may potentially present itself as a more attractive alternative in the future.
“Our competitiveness, particularly Port Klang, remains unaffected despite the move by Ocean Alliance, led by CMA CGM, to relocate their operations in the Port of Singapore”.
“It is only a short term ripple effect due to the move by Ocean Alliance, and mergers and acquisitions of CMA CGM,” he said today, after chairing the 3rd National Logistics Task Force Meeting for 2017 in Putrajaya.
Liow said operations in Singapore may become challenging for shipping lines, due to two out of three shipping alliances making the island their bases.
“It makes more sense for each of the alliance to locate its hub in different ports so that it can compete leveraging on the strength of its supply chain. But now, they are competing within a single hub in the same port without deriving any strategic advantage. Instead of having a pool each for themselves, they now are competing within a single pool.
“It is not far-fetched to say that with shipping lines intensifying competition against one another in Singapore, Port Klang will potentially be an attractive alternative hub in the future. It is a golden opportunity for shipping lines,” Liow said.
Singapore’s paper The Straits Times reported last week that the move has raised questions over Putrajaya’s aggressive plans to build new harbours and rail links along the Straits of Melaka which is one of the world’s busiest maritime trade routes.
It noted further that many of Malaysia’s investments are partnerships with China, yet one of the country’s biggest companies and the world’s fourth largest player, the Ocean Alliance, made a huge shift from Klang to port operator PSA Singapore’s terminal in April.
The move has added to concerns in the industry over China’s commitment to supporting the logistics industry in Malaysia, the paper noted.