Shippers add surcharge at Johor Port

JOHOR BARU: Several shipping companies have this month started imposing surcharge on manufacturers using Johor Port to export their finished products due to severe congestion at the port.

Johor Port Shipping and Forwarding Association secretary Michael Cheah said shipping companies had no choice but to impose the surcharge because of the unsolved delays at the port.

He said most shipping companies would start imposing the surcharge on users if congestion at a port was beyond control and it was up to individual companies whether to impose the surcharge or not.

Inefficiency is said to be one of the main reasons that contributed to the congestion at Johor Port.

Cheah said the surcharge was to recover or mitigate tremendous losses suffered by vessel operators in running costs for chartered hired, bunker burn and misconnections to mother vessels.

"Johor Port cannot stop the shipping companies from imposing the surcharge and manufacturers also cannot blame them for doing so,'' he told StarBiz in a telephone interview.

Cheah said while the association did not have any details on the surcharge rate, he estimated that it could start from US$25 per twenty-footer container unit (TEU).

He said while the surcharge would not be able to reduce congestion at Johor Port which has been ongoing over the last 10 years, the operator should look at ways to improve efficiency at the terminal.

Cheah said inefficiency was one of the main reasons that contributed to the congestion at Johor Port, which could only handle less than 12 containers per hour, way below 22 and 25 containers per hour at other local ports.

Michael Cheah ... Manufacturers in Pasir Gudang industrial area are the worst affected

"Manufacturers in Pasir Gudang industrial area are the worst affected by the surcharge as they now have to fork out extra money to use the port,'' he said.

Cheah said manufacturers in Pasir Gudang had started using Port of Tanjung Pelepas (PTP) in Gelang Patah, about 80km away from Johor Port, to avoid paying the surcharge.

Previously, the majority of manufacturers in Pasir Gudang was reluctant to use PTP despite the latter did not face any congestion and no surcharge imposed by shipping companies there.

Many manufacturers said they would incur higher stevedorage (trucking cost or container-lift-on-fee) of RM230 per container if they were to use PTP, as opposed to RM180 to transport each container to Johor Port.

"With the surcharge, it only makes sense for them to use PTP but in a free economy, it is up to them (manufacturers) when it comes to their port of choice,'' Cheah said.

He said the Pasir Gudang-based manufacturers had voiced their problems to the International Trade and Industry and the Transport Ministries, but both could not do much to address the surcharge issue.

MMC Corp Bhd, which controls Johor Port and PTP, had last year proposed to the Government to consolidate and rationalise operations at the two ports but this was rejected.

Under the proposal, container operations at Johor Port will be moved to PTP, turning the former into a non-containerised port, while PTP will focus on handling containerised cargo.

Johor Port has grown dramatically since 1979. Designed and built to handle between 750,000 and 800,000 TEUs annually, it has now reached a saturation point with no more room for expansion.

Billionaire Tan Sri Syed Mokhtar Al-Bukhary, who controls MMC Corp, has 100% equity in PTP and 70% stake in Johor Port.

Source: StarBiz