Truck drivers protest at Northport over depot charges, delays

PORT KLANG: Container truck drivers who are unhappy with depot operators for allegedly exorbitant charges and causing delays, have taken their grouses to the streets.

Thousands protested at Bandar Sultan Sulaiman, outside Northport here Wednesday, from 10am, urging the Transport Ministry and Port Klang Authority (PKA) to help resolve this matter.

Several demonstrators were also seen hurling stones and empty bottles at trailers that refused to stop. The protest lasted for almost two hours. The drivers claimed they were acting on their own and were not from any group.

R. Pandian, 52, a container lorry driver for 30 years, said they resorted to a protest after depot operators raised handling fees.

"They used to charge RM5 and now it is between RM15 and RM20. We would not mind paying a standardised fee of RM20 if their services improved.

"But their services got from bad to worse and this has resulted in an average of one trip a day for all of us," he said, adding that drivers could previously make at least four trips, back and forth from the depots.

Meanwhile, PKA chairman Datuk Teh Kim Poo, when contacted, said the problem was beyond the authority's jurisdiction.

However, he said, he would see how he could handle this issue as Klang Barisan Nasional chief, by speaking to depot operators and truckers.

Source: BizStar

Klang ports facing a standstill

PORT KLANG: Trouble is looming at the ports here following a planned move by over 1,000 container truck drivers to stop transporting goods on Wednesday to protest against depot operators.

The drivers plan to hold a three-hour gathering from 9am outside Northport to express their frustrations over long-standing issues on delays and increases in depot gate charges, which they claim are affecting their earnings.

The planned demonstration is worrying Northport and West Port as their action may affect operations.

According to a driver who declined to be named, the service level at the depots had resulted in them having to wait for three to four hours to pick a box and transport it to the customer’s premises.

“We are only able to do one or two trips a day and this has reduced our earnings. Some of us are paid monthly wages of RM300 and our main income is from our daily trips. Some drivers are not paid monthly wages.

“We will be able to do six or more trips if the depot operators are more efficient,” he said, adding that previously it would only take them 45 minutes to pick a container.

A haulage company executive said the depot operators had introduced gate charges of between RM10 and RM16 per container so that they could invest in new equipment to improve service. Previously, it was RM5.

“But, until now, nothing has changed and it has severely impacted the livelihood of these much needed professional drivers,” he said, adding that attempts to resolve the issue had been unsuccessful.

Depot operators are paid by shipping lines to store their containers while haulage operators work on behalf of the shippers to move the containers.

An Association of Malaysian Hauliers official said he hoped that the drivers would not go ahead with the stop-work action because this would adversely affect the ports.

In an interview with StarBiz on Feb 20, association president Datuk Che Azizuddin Che Ismail had admitted that haulage operators were still having problems with container depot operators, suggesting that depots should be placed inside port areas rather than outside.

“It’s easier and cheaper if all containers go back to the port. It’s not productive to have a container 10km away from the port,” he said, adding that although some ports in Malaysia had on-dock depots, it was still not efficient as there was only one gate for trucks to collect and send the boxes.

Source: BizStar

Freight forwarders cry foul over exorbitant port charges

Thursday, 10 November 2011

Ten trade associations from various industries have collectively submitted a memorandum to the government, raising concern over exorbitant port charges that they claim are affecting profits and incurring unnecessary higher costs to their operations.

The associations collectively seek the urgent intervention of the Special Taskforce to Facilitate Business (Pemudah), Ministry of International Trade and Industry (MITI), Ministry of Transport, Ministry of Domestic Trade, Cooperatives & Consumerism, Port Klang Authority, Malaysian National Shippers Council and the relevant government agencies to issue clear, enforceable guidelines on the landside charges that shipping lines are allowed to charge.

As of press time yesterday, they had yet to get a response or reply to their memorandum from the government. "Since 2009, new bloated charges are being implemented and now such charges are becoming standard charges for all the ports in Malaysia, and this seriously affects freight forwarders businesses," Federation of Malaysian Freight Forwarders (FMFF) president Alvin Chua Seng Wah told The Malaysian Reserve in an interview.

The FMFF — together with the Malaysia Hardware, Machinery & Building Material Dealers’ Association, Associated Chinese Chambers of Commerce and Industry of Malaysia, Steel Wire Association of Malaysia, Building Materials Distributors Association of Malaysia, Malaysia Mould & Die Association, Federation of Malaysian Foundry & Engineering Industries Associations, Machinery and Equipment Manufacturers Association, Malaysian Indian Metal Traders and Recyclers Association, Malaysia Hardware Wholesaler Association and Metal Dealers’ Association Selangor & Kuala Lumpur — jointly submitted the memorandum to MITI and Pemudah, together with various other related agencies last month. The memorandum stressed that the situation has led to significant increase in shipping costs over the last few years and, if left unchecked, will severely affect the competitive edge of the local industries.

"Our main concerns are that over the recent years, shipping lines have been increasing and creating new landside charges which are dubious in nature and do not reflect the services they provide," said the memorandum.

"They are increasing our cost of doing business by merely creating charges without any input and we are perturbed with the fact that they are permitted to enforce all these charges based on what they deemed to be 'commercial arrangements'," it added.

According to Alvin, the charges are related to the services at the port terminals and are not connected to the freight charges which shippers pay directly to shipping lines or non-vessel operating common carrier operators.

"When Port Klang adjusted its container port charges in 2001, the actual container tariff of the port operator charges the shipping lines RM230 for a 20ft container (twenty-foot equivalent units or TEU), but the shipping lines in turn charge the shipper/consignee RM335 under the name of 'Terminal Handling Charges'. They explained that the difference of RM105 is to cover respositioning of empty containers after un-stuffing and cleaning of containers," said the memorandum.

"Based on our investigation, the repositioning cost is paid for by the shippers/consignees who are paying the local hauliers to undertake the haulage job," the memorandum specified.

The memorandum said shipping lines have also enforced the collection of "container deposits" of RM300 to RM1,000 per container and would deduct any charges incurred for washing and repairing of those containers.

Other grievences include a RM30 charge for "Electronic Data Interchange" on shippers and consignees for their mandatory submission of the shipping manifest, which the memorandum said was the shipping lines' responsibility to do so under the requirements of the Customs Act 1967.

Furthermore, it said the "Container Seal" charge was increased from RM10 to RM15 per unit when the norminal market cost is just RM1.20 per seal while depot gate charges, which are currently set at RM5 per container, are expected to be increased to RM30 per box soon.

The memorandum also stated that some shipping lines have recently introduced a new charge, "Container Yard Shifting", with a RM150 fee per container, which is "highly dubious" as the shipping lines are not involved in any container handling and movement at the terminal.

It said another new dubious charge is the "Container Maintenance" charge of RM30 per TEU that is being unfairly charged under the "Container Deposits" scheme currently being collected by shipping lines, in which there is no explanation and justification for this charge.

"About five million TEUs go through Port Klang every year, of which about 2.5 million TEUs are import containers.

"One such frivolous charge alone like the 'Container Shifting Charge' of RM150 per box, if left unregulated, will cost our domestic industries about RM375 million annually and the overall cost to our domestic industry is huge and it must be regulated before it gets out of control," the memorandum stressed.

Source: Malaysian Reserve

Ports plan tariff hike

A number of major ports in Malaysia plan to increase port tariffs or introduce new tariff items going forward.

This is because the revision of some of the tariff items has been long overdue. The move is also to match the investments that have been made to expand the ports.

Port Klang Authority acting general manager Capt David Padman toldStarBiz that some of the new rates should be applicable by the first quarter of 2012 pending the Transport Ministry’s approval.

“The revision of a number of tariff items including conventional cargo and marine services for Port Klang has been mooted since three years ago.

“This is because a large section of the conventional tariff has not been revised for 45 years since the days when Port Klang was administered by the Malayan Railways.

“Also, terminal operators have many times requested charges to be increased in line with the investments in the facilities and services including the construction of new berths, purchase of new cargo handling equipment and subsequent maintenance of the facilities.”

He said terminal operators had also requested an increase in marine service charges as fuel prices had increased substantially since 2008.

After extensive examination of the proposals by the operators and subsequent consultation with the industry and port users, charges for conventional cargo handling such as stevedorage, wharf handling and storage would be increased, Padman said.

“On the other hand, certain charges such as wharf labour and third-shift surcharge have been withdrawn as they are no longer justified given the scope of current port operations.

“Marine service tariffs will see a slight increase while container handling will see new charges for containers of more than 40 ft long,” he said.

It was reported in StarBiz last month that Penang Port Sdn Bhd also planned to introduce new tariffs in the middle of next year.

Chief operating officer Obaid Mansor was quoted as saying that the proposal to raise port tariffs, comprising largely cargo-handling and ship charges, had been submitted to the Penang Port Commission.

Penang Port tariffs were last revised in 2003 and implemented in 2007, which saw a 30% increase in handling charges for container cargo to the present rate of RM182 for a 20-ft container and RM273 for 40-ft container.

About 80% of the cargo handled at Penang Port’s North Butterworth Container Terminal comprises full container load cargo, which is expected to generate 75% of Penang Port’s revenue this year compared with about 65% in 2010.

Meanwhile, ports in Johor namely Johor Port and Port of Tanjung Pelepas, (PTP) are also expected to introduce new tariffs of some sort.

Chairman for both ports, Datuk Mohd Sidik Shaik Osman said Johor Port had recently received approval for a small revision of its port tariff only after 24 years.

“The new port tariff at the Johor Port has been effectively implemented since August 2011.

“The previous revision in Johor Port’s tariff was in 1987,” he said.

As for PTP, Mohd Sidik said it was currently exploring with the Johor Port Authority on the possibility of introducing new tariff items which were not currently prescribed.

“However, the expected impact on port users will be very minimal,” he said.

As of last year, Port Klang, which comprises Northport and Westports, were ranked at 13th place in the global container ranking by volume at 8.87 million twenty-foot equivalent units (TEUs).

PTP came in at 16th place last year with a volume of 6.54 million TEUs,

It was reported that for the first five months of this year, Malaysian ports handled a total of 8.2 million TEUs, up 10.9% from the same period last year.

Sourced from here.

MIDF research downgrades ports sector to negative

MIDF Research had downgraded the ports sector from neutral to negative in face of weaker exports to the faltering US economy and Europe's sovereign debt crisis.

It said on Monday, Oct 3 that Malaysia's export slowed down as it posted a 7.1% year-on-year (y-o-y) growth in July 2011 from 9.6% y-o-y increase in June 2011.

In terms of sequential month, July's export was 2.2% month-on-month (m-o-m), lower than 5.1% m-o-m posted in the previous month, it said.

"We believe that this had led to the decline in Electrical and Electronics exports where it continued to decline for the fifth consecutive month," it said.

The research house said the declining exports would add pressure to seaports, especially container based ports given that rates are fiercely competitive.

Meanwhile, port traffic is seeing signs of easing as well as NCB HOLDINGS BHD []'s faltering port twenty-foot equivalent units (TEU) growth.

The group posted a decline of 3.4%y-o-y in its 1H11 port TEU while port revenue fell by 1%y-o-y. Also, port profit before tax margin declined by 5.8 percentage points, which suggest the company was facing margin squeeze and rates pressure.

However, the research house maintained its Neutral rating on NCB citing its defensive qualities as its dividend policy would moderate weaken sentiments.

Source: Edge

Bright outlook for ports

Almost all Malaysian container ports are poised to record good growth this year, based on current statistics of containers throughput and stable economic activities.

But the rosy outlook is not without any pockets of concern, with the slowing down of the country’s economy due to external influence a worry.

The Malaysian economy grew 4.6% in the first quarter, marginally missing the 4.8% forecast by most economists.

The Transport Ministry reported last Tuesday that Malaysian ports had handled a total of 8.2 million TEUs (twenty-foot equivalent units) for the first five months this year, up 10.9% from the same period last year.

Transport Minister Datuk Seri Kong Cho Ha said among the notable ports that registered positive growth were Port Klang and Port of Tanjung Pelepas (PTP).

Port Klang and PTP retained its position as the world’s top 20 container ports last year at number 13 and 17 respectively.

The Maritime Institute of Malaysia senior fellow Nazery Khalid told StarBizthat the increase in throughput was not only a reflection of an improving global economy and rebound in international trade, but also stood as testimony to the efficiency and productivity of the ports in attracting cargoes even in leaner times.

“One can say Malaysia is blessed with strategic location, being at the heart of the world’s busiest shipping lanes. However, we also have to be mindful that there are many ports in these areas with equally good infrastructures and services like Malaysian ports, if not better.

“Competition to attract cargo is stiff, and for Malaysia to have recorded impressive throughput growth in the first five months of 2011 is a commendable performance that says much about the competitiveness,” he said.

Nazery partly attributed the growth to growing intra-Asean trade and transshipment trade, the latter thanks to the relentless momentum of China’s economic growth.

“At this rate, and if the global economy continues its slow but steady recovery, our ports should exceed the volumes handled in 2010.

“However, competition for cargo is ferocious. Our ports not only have to compete with one another for a not-too-large slice of domestic cargo but also with up-and-coming ports in Vietnam, Thailand and Indonesia.

“Then, there is also competition with other transport modes in vying for cargo. With the double-track railway in the picture, I foresee rail giving our local ports a run for their money,” he said.

An analyst from a local brokerage said ports in the country would most probably sustain or increase its growth momentum based on the export targets of RM700bil this year from RM639.4bil last year according to the International Trade and Industry Ministry.

Import value was at RM529.2bil last year, up 21.8% from 2009.

But the analyst also cautioned that despite the positive outlook, the momentum of economic growth was expected to slow down in the second quarter due to the impact of the devastating earthquake in Japan and social uprising in the Middle East and North Africa.

This positive development in the port industry contradicted the dilemma faced by most shipping companies as freight rates continue to be battered by an excess of supply.

According to CIMB Research, despite the gloomy rate environment, containership newbuilding orders have zoomed ahead, with over a million TEUs ordered year-to-date from about 700,000 TEUs last year.

“This has tilted the equilibrium negatively and supply is now expected to grow faster than demand in 2012 and 2013,” it said in a recent report.

Last year, according to axs-alphaliner.com, the worldwide reference in liner shipping, global container throughput hit a new record of 560 million TEUs.

“The highest growth was posted by Chinese ports which grew by 17.9% last year, followed by South American ports which grew by 17.6%

“Forty-eight of the top 50 ports registered volume gains in 2010, with only two suffering minor losses. An average growth of 15% was recorded by these main ports,” it said.

Going forward, axs-alphaliner.com said that for this year, growth was expected to moderate to 8.4% as volumes returned to more sustainable levels, with Chinese ports again expected to lead the gains this year.

Source; BizStar

Northport’s RM300m expansion depends on lease renewal

The implementation of the RM300mil expansion plan ofNorthport (M) Bhd, a port- operating subsidiary of NCB Holdings Bhd, will have to depend on the prospects of the lease renewal for the port.

NCB chairman Tun Ahmad Sarji Abdul Hamid said it had submitted the lease renewal application to the Government last week and was hoping for a favourable reply.

“Our application for renewal is done professionally where we have engaged a consultant for the input.

“We have been this business for more than two decades and possess the know-how of the business.

“The renewal of lease is crucial for us as it will determine our prospects.

“We are all geared up for expansion, and we hope that our early submission, site visits and discussion with the Government would accelerate the decision-making process.

“Assurance from the Government is a crucial factor in our expansion plan roll-out,” he told reporters after NCB's AGM yesterday.

Northport's 21-year lease agreement will expire in 2013. It has spent more than RM1.5bil on development since its privatisation about 25 years ago.

Nevertheless, Ahmad Sarji did not deny the fact that there could be other contenders eyeing the lease agreement for the port operation as well.

“I am always inclined to be prudent and cautious.

“There may be other contenders but at this juncture I don't know if there are any or who they are,” he said.

On the RM300mil expansion, Ahmad Sarji said Northport needed to expand its capacity due to increased demand and had initiated the development of wharf 8A into container terminal four.

The construction is planned to start in the second half of this year and expected to be completed in 2013.

This is part of Northport's RM580mil three-year expansion plan that was launched in 2008 but had been postponed due to the global economic downturn.

Ahmad Sarji also explained that the development of Southpoint, a terminal at Northport dedicated for the handling of non-containerised or conventional goods, would depend on the business review of Southpoint before a budget was allocated for its expansion.

Recently, concerns were raised by users of Southpoint, especially exporters of palm oil, on expanding and improving its storage installations and distribution facilities.

On its key performance indicators this year, Ahmad Sarji expects container volume at Northport to increase by 5% to about 3.5 million twenty-foot equivalent units (TEUs) in line with the country's manufacturing and gross domestic production prospects. Last year Northport recorded a 15.6% increase in container volume.

“For Kontena Nasional Bhd (NCB's haulage arm subsidiary), we are embarking on halal logistics business and cold-chain warehousing services.

“Of equal importance, especially for Kontena Nasional, is the cost cutting measures via the introduction of a tracking system that would improve the turnaround time and management of its assets,” he said.

NCB reported a net profit of RM137.4mil for the financial year ended Dec 31, 2010, down 2.5% from a year ago.

Its revenue for the period surged to RM887.9mil from RM831.4mil in 2009.

For the year under review, NCB's proposal for a final and special dividend of 30 sen per share less 25% tax was approved at the AGM.

This will see a payout of RM105.8mil on May 6.

Incorporating the interim dividend of 7 sen per share that was paid in last October, the total payout would accumulate to RM130.5mil.

“This is equivalent to about 95% distribution of our profits. NCB dividend policy complies with Perbadanan Nasional Bhd's of about 75% profits distribution,” he said.

Source: BizStar

Northport expects more traffic in 2011

Northport (Malaysia) Bhd, the port operating subsidiary of NCB Holdings Bhd, expects to handle 3.5 million twenty-foot-equivalent units (TEUs) this year against 3.3 million TEUs recorded last year. 

NCB Holdings Chairman Tun Ahmad Sarji Abdul Hamid said the group was optimistic of achieving the target based on improved global trade and the country's manufacturing output. 

The group will spend RM300 million for the expansion of Northport's terminal facility in response to increased demand, he told reporters after NCB Holdings annual general meeting here today. 

The new facility, to be constructed in the second-half of the year and completed by 2013, would increase Northport's capacity towards the vicinity of 5.5 million TEUs. 

Meanwhile, Ahmad Sarji said the NCB group has submitted a proposal to the government to renew Northport's licence which was due to expire in 2013. 

"We submitted this proposal and would like the authority to see how we operate. We hope the early submission of this proposal and with the authorities coming over to see our facilities will help accelerate the decision making process and thereby give us a good lead time for expansion," he added. 

He also said the RM300 million facility expansion was indicative of the group's earnest to pursue its business. 

"We hope this thing (investment) will add to our merit in persuading the authority to consider us favourably for the renewal of our lease," he said

Source: Business Times

Kuantan Port City + East Coast Economic Region

Kuantan Port City can attract RM38bil investments by 2020

KUALA LUMPUR: Kuantan Port City (KPC) is projected to attract up to RM38bil investments by 2020, and help the East Coast Economic Region (ECER) and the country’s first Special Economic Zone located within it, to be an industrial and logistics hub.

The ECER encompasses Kelantan, Terengganu and Pahang as well as the Mersing district in Johor.

KPC forms one of the main components of the development corridor. Encompassing 12,667ha, the completed project will see a throughput of 24 million tonnes, create 44,785 jobs and contribute RM9.3bil to the local economy by 2020.

According to a shipping analyst, KPC projects would certainly transform Kuantan Port into a mega port as the development calls for the expansion of Kuantan Port.

He said feasibility studies had been completed. “With new port facilities, it will enable the port to receive vessels above 40,000 tonnes or the next generation of container ships,” he said.

The analyst said KPC’s integrated development would also result in petrochemical, palm oil, automotive, container markets, as well as a major industrial and manufacturing zone serving the entire Asia-Pacific region.

He said KPC would also be the site for a Palm Oil Industrial Cluster (POIC) with one of its manufacturing components specialising in the downstream palm oil industry and the petrochemical cluster. Construction work at the POIC began in September last year. “The port city will improve the income and skills of the population while providing them with convenient and safe access to modern and efficient facilities and infrastructure,” the analyst said.

The Integrated Master Plan for KPC has been finalised and was handed over to the Kuantan Municipal Council last year.

Meanwhile, improvements in KPC’s main infrastructure, such as roads and drainage system, commenced this year.

To improve the water quality in KPC, a two-km water pipeline in Gebeng was completed and was handed over to the Pahang Water Supply Department in March last year. Land clearing and survey works for the construction of Panching Water Treatment Plant, are ongoing.

Once completed, the water treatment plant will have a capacity of 160 million litres per day, which will ensure adequate water supply, particularly in the Gebeng area.

To serve KPC, a multimodal network of highways, roads, railway and airports will move people and goods between KPC and the hinterland or the industrial clusters.

A logistics and distribution centre located near the port will also substantially improve the handling of goods.

KPC covers the existing Gebeng industrial area and Kuantan Port, up to the Mardi Institute in the north and the Pahang border in the west.

Source: BizStar

Economic woes in US, Europe still cast shadow on local shipping sector

Despite the rosy outlook of seaborne container trade anticipated this year in continuation of last year’s growth, there are several negative variables that could still cloud the positive sentiment.

Maritime Institute of Malaysia senior fellow Nazery Khalid said Malaysia, being a trade-dependent country, would be subjected to the economic performance of countries it traded with and the economic woes of the United States – a key trade partner – were not likely to improve soon.

“The eurozone crisis might add to the gloom; already Portugal is feeling the contagion effect of a crisis that has hit Ireland and Greece.

Naery Khalid says the US economic woes are not likely to improve soon.

“And China’s effort to ease economic growth to prevent overheating could also have an adverse effect to Malaysia’s trade and ports’ performance in the near term,” he toldStarBiz.

According to Nazery, the World Bank projected that China’s economy would grow at an average of 8.4% over 2011-2015 and 7% over 2016 to 2020, compared with the double-digit average annual growth it registered in the past decade.

“Other quantitative easing measures by several major trading countries may also dampen a sharp rebound in global economic and trade growth, and this will obviously have a telling effect on Malaysia,” he said.

Although Malaysia’s economy emerged largely unscathed from the global recession, Nazery said recently-released domestic figures suggested that the country was not entirely immune to the devastating effects of the downturn.

Malaysia’s exports in October 2010 slumped to an 11-month low, with a mere 1.3% growth recorded year-on-year, despite the economy posting a strong growth of 8.1% in the first three quarters of 2010.

“Also, the specter of huge new tonnage coming into shipping trades such as container and bulk will add downward pressure to freight rates.

“It would be unlikely that these vessels would be able to find demand for such cargos to be able to match the supply of the vessels carrying them,” he said.

To recap, Minister of Transport, Datuk Seri Chong Kong Ha recently announced that that Malaysian ports handled a total of 18.4 million 20-foot equivalent units (TEUs) last year.

This commendable figure was a 14.8% increase from the 16.04 million TEUs of total container throughput recorded by local ports in 2009.

The minister has forecast a 7% year-on-year growth in total throughput in 2011.

Nazery said the confidence of a productive year for local ports this year was not misplaced as economic indicators pointed to decent growth for Malaysia’s trade and economy this year, in line with improving global economic sentiment.

World Trade Organization projected global trade to grow 13.5% this year, compared with its earlier growth forecast of 10%.

Meanwhile, Bloomberg recently reported that Asian exports that helped power the world recovery last year were poised to grow more slowly as the region’s manufacturing rebound eases and the US unemployment restrains consumption after a post-recession spending spree.

According to the newswire, Container traffic growth in Shanghai, Singapore and Hong Kong, the world’s busiest ports, has cooled since the first half of last year.

Singapore exports in 2011 may rise at a third of last year’s pace of as much as 24%, according to DBS Group Holdings Ltd. The island’s government joins Taiwan and South Korea in predicting smaller gains in overseas sales.

While seaborne container trade outlook is still on cautious mode, shipping companies that were severely battered when freight rates plunged during the height of the global economic crisis, were slowly “restoring” their rates in tandem with the increase demand for their services.

Maersk, the largest container shipping company globally, had on Dec 22 announced general rate increase for its Middle East- Europe service for the first quarter of this year.

CMA CGM in its revenue restoration programme has also embarked on new rate restoration and surcharges for a few of it services this month.

Rising trade strains Malaysia's top ports

Malaysia's growing international trade is putting a strain on main ports, with delays in cargo handling being reported despite an increase in throughput volume, according to a business report on Malaysia.

Publisher and consultancy Oxford Business Group (OBG) said as majority of Malaysia's foreign trade as well as its domestic cargo transfer is moved by sea, delays in clearing the ports can have a direct impact on the economy.

"Bottlenecks add to the costs of both shipping firms and their clients, especially those with perishable freight or cargoes being transported on a tight deadline.

"Though there has been an increase in the number of 20-footer container units being handled by Malaysia's ports this year, some of the main cargo facilities are being stretched, with complaints coming from representatives of the shipping industry and producers," it said in its latest Economic Updates on Malaysia.

International Trade and Industry Ministry's (Miti) figures released in early December show a continuing surge in overseas trade, with the 10-month import and export data rose over 20 per cent from the same period in 2009 to RM967.58 billion. Exports climbed by 18 per cent to RM529.56 billion, while imports increased by 24.7 per cent to RM438.02 billion.

The government has revised upwards its projected economic growth for 2010 to 7 per cent from 6 per cent, due partly to a solid increase in foreign trade.

In the south, Johor Port Shipping and Forwarding Association said delays at the Johor Port were slowing the flow of imported raw materials, disrupting production, and resulting in missed deadlines for shipments. These are potentially harming Malaysia's reputation as a supplier. 

The port has little room for further expansion, having been designed to handle a maximum of 800,000 20-foot equivalent units (TEUs) a year, a limit it has now reached.

In mid-November, a number of shipping companies operating through Johor Port said they would be imposing a surcharge on exporters due to high levels of congestion and delays at the facility. 

The surcharge is to offset losses stemming from the delays, including the costs of operating vessels, charter fees and charges resulting from missed connections. 

This is expected to hit industries in Pasir Gudang, with manufacturers having to fork out US$25 (RM77) or more per container in extra levies.

OBG said port operators in Johor are trying to improve the situation, but there have been no quick-fix solutions to that. 

MMC Corp Bhd, which operates both Johor Port and Port of Tanjung Pelepas (PTP), recently floated a proposal to shift all container-handling activities to PTP, leaving Johor Port to deal with other cargoes.

However, the move to consolidate port activities was rejected by the government, with Miti Minister Datuk Seri Mustapa Mohamed saying the decision had been taken after considering views and concerns from companies and industries operating in Pasir Gudang.

Geodis Wilson Freight Management general manager Donovan Niap believes the government should reconsider its decision, given the continuing congestion at Johor Port.

Johor Port's operators have announced plans to improve cargo-handling capacity, including acquiring more cranes and replacing ageing equipment. 

"However, the space constraints will mean there is only so much improvement that can be wrung out of the upgrades," said OBG.

Up north, the operators of Penang Port are taking a different tack, hoping a US$100 million (RM307) dredging project to deepen the main channel leading to the port's container facility will enable it to attract more trade and handle larger vessels.

The project has the potential to turn the North Butterworth Container Terminal into a major facility, capable of handling up to two million TEUs a year.

The expansion of the port is timed to coincide with work to electrify and lay duel track on the Ipoh-Padang Besar railway, which should be completed by 2013.

OBG reckons that despite the private sector and state authorities' additional investments to improve port facilities and infrastructure to clear the bottlenecks, these projects will take time.

"This means freighting delays will continue to pose problems for Malaysia's economy," it added.

Source: Business Times

Malaysia’s cargo handling to grow 7pc

Competitive pricing and efficient services, including a speedy turnaround time, is expected to drive Malaysian ports to achieve a seven per cent growth in cargo handling in 2011, said Transport Minister Datuk Seri Kong Cho Ha. 

He said Malaysian ports handled 18.4 million twenty-foot equivalent units (TEUs) last year, up 14.8 per cent, compared to 16.04 million in 2009. 

"We expect further growth for this year and ahead. We are projecting a seven per cent growth in terms of TEUs and it is a conservative figure," he told reporters after opening the National Maritime Conference here today

Source: Business Times

Forwarders cry foul over port deposits

PORT KLANG (Jan 2, 2011): Freight forwarders are crying foul over the requirement of shipping lines that they deposit up to RM2 billion a year to cover damage; and the Port Klang Authority (PKA) is seemingly powerless to do anything.

The Selangor Freight Forwarding and Logistics Association (SFFLA) is furious that the PKA is allowing the 100 foreign shipping lines that call at our ports to dictate terms to terminal operators and refuse to adopt internationally-accepted rules which protect terminal operators, freight forwarders and shippers.

SFFLA honorary secretary-general Wee Ah Sah said the Equipment Interchange Report (EIR), a document accompanying containers stating the condition of the boxes at each point of exchange, have been replaced by deposit takings of between RM750 and RM1,000 per container.

"The deposits were imposed in early 2010 and have to be paid as insurance to ensure that shippers are protected if the boxes are damaged although this is already covered by the EIR," Wee told theSun.

He claimed that in almost all cases, 10% of the deposit is retained due to damaged containers, although these boxes are prone to wear and tear due to extensive use.

"There have been cases where the deposits were not returned due to rusty containers but the rust could have been there much earlier," said Wee whose association represents 550 active forwarders.

He said as 2.5 million containers came into Port Klang (North Port and Westport) a year, by simply taking 10% of the minimum RM750 deposit, the amount is almost RM187.5 million. And as deposits are not returned immediately, millions of ringgit more in interests are tied up.

"Sometimes it takes up to five months to get our money back! Can you imagine the amount of interest that is lost?" said Wee, adding that the container should be the shippers’ responsibility.

However, he admits that stiff competition led to several terminal operators bending backwards to accommodate shippers' demands.

The European Union (EU) had introduced a charter to prevent shipping cartels which could wreak havoc to world trade by raising the cost of transportation, and by extension, the price of goods and services.

"What they can’t do in the West they are trying it here," Wee claimed.

He blamed PKA for encouraging the practice, which he equates to blackmail.

"The PKA has lost its purpose and is not playing its role as regulator and facilitator of the ports by ensuring fair practices," he said. He also blamed terminal operators for not putting their foot down by refusing to collect the deposits.

Operators are also spoiling these shipping lines by allowing lengthy free storage periods. "Previously used to be seven days, at least now they have brought it down to three days, but why?" said Wee.

He added that while tariff rates were RM140 per (container) lift, undercutting had led some terminal operators to offer shipping lines RM50 per lift.

"The competition between the terminal operators is hurting the ports and the PKA must step in," said Wee.

He cited an example where one shipping line which owed millions to one operator had since moved to another operator due to incentives – without settling the debt to the former.

Westports Malaysia Sdn Bhd chairman Tan Sri G. Gnanalingam agreed that PKA must impose some form of control. "The PKA must be a regulatory body that is run by people who know the port business," he said.

However, he said Wee’s claims must be taken with a pinch of salt.

"There are over 3,500 freight forwarders in the country, while even Japan has only 300.

"Seems that anyone can be a freight forwarder, so this portion of the industry must also be regulated," he said, declining to comment further. 

Source-- theSun

Hauliers irked by gate charge

BUTTERWORTH: The Association of Malaysian Hauliers (AMH) has urged the Transport Ministry to intervene on the move by the Malaysia Container Depot Association (MCDA) to impose a RM5 fee for every container that is returned to or taken from their depots.

AMH northern region chairman R. Amaiappan said MCDA had notified the association via email that it would imposed the fee starting Jan 2. All 30 AMH members had protested. “We are only transport agents who collect containers from the depot as ordered by the shipping agents and the charge should be imposed on the shipping agents,” he said.

Source: BizStar

Westports seals long-term deal with China Shipping

China Shipping Container Lines Co Ltd (CSCL) would continue to make Westports Malaysia in Port Klang its mega trans-shipment hub in Southeast Asia.

This was following the signing of a long-term Terminal Service Agreement between Westports and CSCL in Shanghai on December 7.

"CSCL will be deploying 14,000 20-ft equivalent units (TEUs) vessels from first-quarter next year as our 17m natural deep sea port is their preferred port of call.

"We have been constantly improving the productivity rate on their vessels. Our skilful workforce and state-of-the-art port facilities are ready to handle these growing sizes of container vessels, Westports chief executive officer Ruben Gnanalingam said in a statement yesterday.

CSCL, a division of China Shipping Group, is currently the second largest customer at Westports, after French Liner, CMA CGM.

Westports is expected to handle some 600,000 TEUs for CSCL this year, including the group's Feeder Liner - Puhai Shipping, Westports said.

"Westports had given excellent service and we are confident of growing further in the next decade," deputy managing director of CSCL Zhau Hongzhou said.

Zhau also expressed happiness with the agreement saying it reflected the strong bond of friendship and growing trade volume between both Malaysia and China.

Westports staff proved that productivity is the core objective of business by setting yet another benchmark for a China Shipping vessel in March this year.

They hit a crane productivity of 734 moves in a single hour of operations with nine-crane deployment. This feat was performed while working on CSCL Pusan, a 9,600 TEUs vessel.

Source: Business Times.