Cabotage: Some shipping industry players support open policy

While the local shipowners deem the recently-announced partial relaxation of the cabotage policy as untimely, some quarters of the local maritime industry think otherwise.

The Government had partially liberalise the cabotage policy for containerised transhipment cargo for the sectors between the Port of Sepangar, Bintulu, Kuching with Port Klang and the Port of Tanjung Pelepas and vice versa effective June 3.

The liberalisation will allow foreign vessels to carry containerised transhipment cargo within the above sectors without a need for a domestic shipping licence.

According to a prominent industry player, the liberalisation was inevitable in the long run, especially if Malaysia wanted to be more competitive.

“It opens up opportunity for importers and exporters in Sabah and Sarawak as well as the industries to enjoy a lower freight cost due to competition in the shipping transportation sector, which can be translated into cheaper price of consumer goods and industrial needs.

“Additionally, the move will allow the two east Malaysian states to lure international shipping lines to the country,” he said, adding that it would also benefit the ports in Sabah and Sarawak as well as to the economic development corridors there.

When international shipping lines can go directly to Sabah and Sarawak, they can take suitable cargo for the Far East and the US markets as opposed to coming to Singapore or Port Klang before they go to the Far East or China.

An industry observer said the Federation of Sabah Manufacturers also recently reiterated the need to abolish the policy, saying that the move could also pave the way for the Kota Kinabalu Sepangar container port to become a hub for the Brunei, Indonesia, Malaysia and the Philippines-East Asean Growth Area (BIMP-EAGA) region.

“It must be noted that even after the policy is relaxed and international shipping lines travel to east Malaysia, they will at most call one or two ports in Sabah or Sarawak.

“However, ports like Sepangar, Bintulu or even Kuching can vie to become a hub port for the BIMP-EAGA region and be a getaway for shipment of cargoes to the Far East,” he said.

In general, he said, there was still a lot of cargo in Bangladesh, Myanmar and India, which local Malaysian shipping lines can target.

Source: StarBiz