CCM plans aggressive expansion

CONTAINER Connections (M) Sdn Bhd (CCM), one of the leading depots in container operations management, is on an aggressive expansion plan to grow its business in the region by 2012.

The company is eyeing several markets, both in the country and Southeast Asia, to open depots namely in Kuantan, Penang, Bangkok and Laemchabang in Thailand, and Surabaya and Jakarta in Indonesia.

"The expansion is part of our three-year plan. We see huge potential in the depot business and we intend to tap it and grow further," said general manager Razak Rahman.

CCM, which has its headquarters in Singapore, provides logistic services for implementation of depot management systems in the containerisation industry, serving both domestic and international sectors.

It currently owns three depots, namely in Singapore, Pasir Gudang, Johor, and the latest being in Northport, Port Klang.

"We are spending RM8 million for the new depot, which includes purchasing new container forklifts that cost RM1.2 million each," Razak told reporters after the opening of the company's depot in Northport yesterday.

The new depot was launched by Port Klang Authority (PKA) chairman Datuk Lee Hwa Beng.

PKA is the regulator for both Northport and Westport.

Razak said by September, a fourth depot on a 3.2ha site in Westport area will be operating to enhance the group's depot services in the region.

CCM was incorporated in November last year and has an impressive track record in providing maintenance and repair services to the shipping and leasing lines in Singapore and Peninsular Malaysia.

Its current depot has a land area of 4.8ha which is able to accommodate at least 9,800 TEUs (20-foot equivalent units).

Meanwhile, Lee said Port Klang moved 4.31 million TEUs of cargo in the January-June 2010 period, up 29.3 per cent from 3.33 million TEUs a year earlier, as the global economy recovery boosted cargo traffic.

"We project 8.2 million TEUs for the whole year, where Westport is projected to handle 5.2 million TEUs and Northport 3.0 million TEUs," he said.

Source: Business Times

Butterworth container terminal woes to be resolved by next month

The congestion problem at the North Butterworth Container Terminal (NBCT) will be resolved by next month when an additional 3,000 ground slots at its container yard is ready for stacking cargo.

Penang Port Commission (PPC) general manager Noor Ariff Yusoff said the additional slots were part of the phase three expansion programme at the NBCT.

“The cargo handled at the NBCT had increased by 27.3% in the first half of 2010, compared to the corresponding period of 2009. This is why there is congestion,” he said.

He was responding to the congestion problem at the NBCT, the Association of Malaysian Hauliers (AMH) R. Amaippan’s advice to customers to use Port Klang, and Penang Chief Minister Lim Guan Eng’s call for outside expertise to be brought in to assist PPC and Penang Port Sdn Bhd (PPSB).

Noor Ariff said PPC and PPSB were now working on collecting the relevant data from all port users to formulate a system for cargo delivery and storage that was agreeable to everyone.

“We will be having a meeting with all the stakeholders on July 28 to come up with a solution for the hauliers that will help them out until next month when the 3,000 additional ground slots are ready,” he said.

PPC chairman Tan Cheng Liang also asked Lim to cooperate to help out with the congestion problem and not politicise the issue in the media.

“The Chief Minister should help out in approving reclamation projects by PPSB, as the state government is in charge of land matters.

“He is diverting attention from problems facing his administration such as the illegal sand mining issue in Balik Pulau,” Tan said.

She said PPSB also wanted to solve the congestion problem soonest, as it has a key performance index to fulfil, which was to achieve handling over one million TEUs (20 ft equivalent units) of cargo this year.

Penang Freight Forwarders Association (PFFA) president Krishnan Chelliah said that PFFA members had already received enquiries from exporters here on the cost of exporting from Port Klang.

“They are also checking out whether by exporting via Port Klang they will meet their shipping deadlines and avoid being penalised by their customers for late deliveries,” he said.

Source: StarBiz

Former PTP chief set to be Johor Port CEO

According to the Business Times, Johor Port CEO Abdul Khalid was given the option to join Port of Tanjung Pelepas' parent MMC Corp or go on leave.

THE former chief executive officer of Port of Tanjung Pelepas (PTP) Captain Ismail Hashim is poised to join Johor Port Bhd as its new executive director beginning August 1, replacing Abdul Khalid Lal Khan.

According to sources, Abdul Khalid was given the option to join PTP's parent MMC Corp Bhd or go on leave.

It is understood that he was among those who opposed to the rationalisation plan involving PTP and Johor Port.

The realignment at PTP is seen as a move by MMC to finally push forward the rationalisation of the two ports after almost a decade of trying to see it through.

It is understood that staff at Johor Port were briefed of this move last Friday.

However, a representative from MMC Corp declined to comment when contacted. MMC wholly owns Johor Port and has a 70 per cent stake in PTP.

Under the rationalisation plan, all container operations will be moved to PTP in Gelang Patah while Johor Port in Pasir Gudang will handle all other cargoes such as bulk and liquid shipments.

This was reportedly a move taken to ease the congestion in Johor Port which is operating at full capacity with no room for expansion.

In addition, the usage of larger container vessels require the port to have certain equipment and depths to receive them.

Federation of Malaysian Manufacturers Johor Branch was also reported to be against the idea initially as the proposed move would cause disruptions in operations for manufacturers in Pasir Gudang, Tampoi and Tebrau Industrial Estates.

It is estimated that the haulage costs will double after taking into account the higher port charges at PTP.

Another report indicated that to reduce the cost burden, PTP and MMC had come out with several suggestions including a lower port tariff.

"Currently, many contracts and agreements could not proceed due to the uncertainties of this rationalisation," said a source.

The move was supposed to take effect on January 1 this year but is reportedly still waiting for the government's decision.

The outcome of discussions between PTP and manufacturers at Johor Port on the issue had been submitted to the Transport Ministry last year.

Source: Business Times

Penang congestion: Send cargo to Port Klang

The Association of Malaysian Hauliers (AMH) is advising its customers in the northern region to send their export container cargo to Port Klang.

AMH (northern region) chairman R. Amaiappan told StarBizWeek that this would be only a temporary measure until PPSB could resolve the congestion of container cargo issue at the North Butterworth Container Terminal (NBCT).

“Although on July 1, 2010, there was an instruction from Penang Port Sdn Bhd (PPSB) chairman Datuk Dr Hilmi Yahaya to the NBCT to open up the window frame for delivering container cargo to five days, the order was not implemented.

“We still have to deliver export containers within the one and half day window frame.

“Since the PPSB could not open up a five-day window frame in accordance with the guidelines for all the ports in the country, and it is not possible for us to deliver within the shorter window frame, we will tell our customers to ship from Port Klang instead.

“This is to help ease off the congestion at the NBCT container yard, which is over 85% stacked with container cargo most of the time,” he said.

Last month, StarBiz reported that 20 container haulage companies in the northern region were losing about RM18mil a month in “opportunity losses” because of the shorter window frame to deliver container cargo for export.

This happened about two months ago, PPSB reduced the five-day window frame for haulage companies to deliver their export container cargo to one-and-a half to two days.

“If PPSB cannot resolve the congestion problem at the NBCT container yard soon, there will be more goods waiting to be shipped out, worsening the problem at hand, as the Ramadan holiday season is approaching.

“So if we don’t make use of Port Klang now, container cargo will not reach their destinations on time,” he said.

PPSB general manager (container) Obaid Mansor said the matter had to do with the physical constraint of the container yard at NBCT.

“This has nothing to do with orders. For the past one month, vessels have been coming in late to ship out cargo at the NBCT container yard, resulting in space constraint.

“If vessels can come on time to ship out the cargo, then we can open up a five-day window frame,” Obaid said.

Penang Port Commission chairman Tan Cheng Liang said the matter was raised at a Penang Port Consultative Council (PPCC) meeting about two weeks ago.

“We were informed that PPSB top management had given instructions for the NBCT to resume the five-day window frame for cargo delivery.

“Meanwhile PPCC had also formed a committee headed by its general manager to thrash out all the issues of operations,” Tan said.

Penang Importers & Exporters Association (PIEA) secretary Wong Yim Fatt said its members would probably not opt for Port Klang as the trucking charges were high.

“The shorter window frame is giving us exporters a lot of problem, as there is not enough time to ship out our cargo.

“We hope PPSB is able to resolve the problem soon.

“In the meantime, we would like to ask PPSB to give us a waiver for late submission of cargo, which is RM60 per shipment,” he said.

Federation of Malaysian Manufacturers (FMM, North) chairman O.K. Lee said FMM was not a party to the decision of AMH to use Port Klang instead of NBCT.

“We will leave it to the members to decide which port they want to use,” Lee said.

When asked for comments, Penang Chief Minister Lim Guan Eng said PPSB should step in to resolve the problem immediately.

”Instead of attracting business, it is driving business away,” Lim said.

Source: Star Biz

Buoyant freight rates

Malaysia's container shipping freight rates have returned to near pre-crisis levels, driven by a combination of demand and shortage of container equipment.

"We started to see rates go up from the last quarter of last year," CMA-CGM Malaysia managing director Simon Whitelaw told Business Times.

"All main shipping routes are seeing an uptrend, especially for long haul freight rates," he added.

While recently there have been reports saying that shipping lines have been raising rates indiscriminately for cargo moving from Asia to Europe, shipping lines insist that it is part of a rate restoration programme, following a recovery in the global economy.

For example, freight rates on the Asia-Europe trade route plunged to US$250 (RM800) per box or 20-foot equivalent units (TEUs) from a peak of US$2,000 (RM6,400) per box in 2008, as the global economy slowed.

Rates are currently hovering at between US$1,750 and US$1,780 (RM5,600 to RM5,696) per box.

"During the crisis, shipping lines have cut capacity, laid up vessels, laid off people and support industries were also affected. Now that there is a recovery you can't automatically get everything back up. It takes time," Shipping Association of Malaysia chairman Ooi Lean Hin said.

Last year, the global container shipping industry was reported to have lost more than US$15 billion (RM48 billion) due to slumping trade, overcapacity and price wars.

The shortage of containers for export and vessel capacity has also been a topic of concern of late. Unreplenished stock equipment and the scrapping of old containers have resulted in a shortage of container equipment.

"The challenge for exporters now is to find equipment and/or vessel space to ship their cargo, rather than harp on rates which have yet to return to pre-crisis levels," Ooi said.

That's because the squeeze on capacity and equipment, combined with the willingness of Chinese shippers to pay more, have resul-ted in the principals of container lines allocating more container space to them and less to Malay-sian shippers.

For example, the rate for carrying a 20-foot box from China to Europe is some US$2,000 (RM6,400 ).

"I've always said that the shipping industry is one that does not require any regulatory control because shipping is very sensitive to the function of demand and supply," Ooi said, reiterating that shipping lines do not operate like a cartel.

Source: Business Times

Port Klang retains status as busiest container port

Port Klang, comprising Northport and Westports, has retained its title as the country's busiest container port in the first half of this year, with a 48.3 per cent share of the total number of containers handled by all Malaysian ports.

Its rival, Port of Tanjung Pelepas in Johor, was listed second busiest, handling 35.4 per cent of the country's total container throughput.

Port Klang moved 4.31 million TEUs (20-foot equivalent units) of cargo in the January-June 2010 period, up 29.3 per cent from 3.33 million TEUs a year earlier, as the global economic recovery boosted cargo traffic, said Port Klang Authority (PKA) general manager Kee Lian Yong.

It handled 856,110 TEUs of exports, up 25.8 per cent from a year earlier, and the volume of imports rose 18.2 per cent to 828,082 TEUs. Transshipment volume rose 34.5 per cent to 2.62 million TEUs.

Kee said Westports led the way in the first half of 2010 with a 30 per cent increase in container volume from the same period in 2009, handling 2.65 million TEUs, while Northport saw a 28 per cent increase to 1.66 million TEUs last year.

"We are on track to achieve our stretch target of 8.4 million TEUs for the whole year, where Westports is projected to handle 5.2 million TEUs and Northport 3.2 million TEUs. The fourth quarter is traditionally the busiest quarter of the year," Kee told Business Times in an interview.

Port Klang moved 7.31 million TEUs last year, a decline of 8.3 per cent compared with 7.97 million TEUs recorded in 2008.

"The projection for 2011 is a growth of 10 to 12 per cent in container volume (from 2010)," said Kee.

Meanwhile, in terms of tonnage handled, traffic through Port Klang in the first five months (January-May) of this year increased by 36.8 per cent to 65.54 million tonnes from 47.90 million tonnes a year earlier.

"PKA and the two terminal operators (Northport and Westports) took this time of slow-paced economy and downturn to reshape our strategies. These strategies have hastened and increased our growth even more so with the global economic recovery as can be seen by our growth percentage for the first half of 2010," said Kee.

He added that the port authority is aware that emerging ports in Asia such as Vietnam and Sri Lanka pose stiff competition to Port Klang.

"In order for us to be competitive, we are constantly looking at our operations to ensure (we offer) effective and efficient service, are service oriented, and have cost-effective operations and a commercial competitive environment," he said.

Source: Business Times

Container ship catches fire off Port Klang

An Oman-bound container ship, MV Charlotte Mearsk, carrying 1,000 containers and 21 crew members, caught fire some 111km off Port Klang Wednesday night.

District maritime enforcement chief Maritime Capt Mohd Amir Hamzah said the fire broke out in the ship's cargo area around 10.10pm.

"All the crew are safe," he told a news conference here Thursday.

He said that the Malaysian Maritime Enforcement Agency (MMEA) dispatched its KM Danga vessel and a speedboat to the scene upon receiving information on the incident.

"Although we were told that the crew were putting out the fire, and would proceed with their journey, we went to the scene nonethless," he said.

Mohd Amir said that when the MMEA team arrived around 4am Thursday, the containers were still on fire.

A Bombardier helicopter and another ship, KM Marlin, were called in to help control the fire, he added.

"We have yet to ascertain the cause of the fire and the items in the containers," he said, adding that the MMEA was also identifying the ship's owner.

The operation to put out the fire was still underway in the afternoon.

Source: The Star

Shipowners refute Sabah manufacturers' claims

THE Malaysian Shipowners' Association (Masa) has once again refuted claims that the cabotage policy and shipping charges are the cause for the high cost of living in Sabah. It was responding to the Federation of Sabah Manufacturers' (FSM) complaints this time.

In a statement yesterday, Masa chairman Nordin Mat Yusoff said there was a distinct difference in what constituted ocean shipping cost and what is within the control of shipowners.

"The ocean shipping cost makes up less than half of the total landed transportation charges paid by shippers in Sabah. The remaining 50 per cent includes charges such as land transportation and storage," he said.

Nordin said that the ocean shipping charges had dropped by more than half a decade ago and that the rates were market-driven. He rejected claims by FSM that Masa was a cartel.

"There is simply no cartel in the trade because shipping lines serving the route do not collectively agree on ocean freight rates and shippers are free to choose the shipping line," Nordin said.

Source: Business Times