Malaysian navy thwarts Somali pirate attack on MISC tanker

GULF OF EDEN: Malaysian navy commandoes thwarted an attempt by Somali pirates to hijack a Malaysian International Shipping Corporation (MISC) tanker early Thursday.

Sources said the commandoes on board the Royal Malaysian Navy's Bunga Mas 5 were on a routine escort mission of MISC's chemical-laden MT Bunga Laurel and another LPG carrier out of the dangerous gulf waters enroute to Singapore.

But hours out of the danger zone, when the RMN would cease their escort, the pirates struck.

At least seven pirates began attacking the MT Bunga Laurel firing their assault rifles and machine guns when trying to board the vessel.

The crew of MT Bunga Laurel activited the alarm and the commandoes, which were about 30km away, reacted immediately by dispatching a helicopter to the scene.

The sources said the commandoes boarded the tanker and subdued the pirates.

They said the swift action saved the 20-odd Malaysian crew and the vessel. At least three pirates were injured in the shoot out with the commandoes.

In another incident, South Korean navy commandos stormed a ship hijacked by Somali pirates in the Indian Ocean on Friday.

All 21 crew were saved and eight pirates killed.

The hijacking came two months after another Korean supertanker was released by Somali pirates after being held for seven months.

Piracy has surged off lawless Somalia in recent years. Pirates are currently holding 29 vessels and about 700 hostages.

Source: Star

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.

Syed Mokhtar gets Penang Port

Losses from the ferry service have hamstrung PPSB’s efforts to be publicly listed. — Reuters pic

KUALA LUMPUR, Dec 24 — Tycoon Tan Sri Syed Mokhtar Al-Bukhary has won the race to take over the Ministry of Finance’s (MoF) Penang Port Sdn Bhd (PPSB), adding the northern port operator to his maritime logistics operations.

The Malaysian Insider understands that the Cabinet approved the sale at its meeting this week despite competitive bids from other top businessmen and also the Penang government, which owns the port land.

“The Cabinet has decided in favour of Syed Mokhtar,” a source told The Malaysian Insider, saying the tycoon’s company will buy into the port operator and the ferry service between Penang and Butterworth.

It is not known what price the government had agreed on but sources said it will be finalised soon.

Syed Mokhtar also owns PTP and Johor Port.

The influential businessman already owns Port of Tanjung Pelepas and Johor Port via MMC Corp Bhd, whose joint venture with Gamuda Bhd were also named Project Delivery Partner (PDP) for the RM36 billion Mass Rapid Transit (MRT) project in Kuala Lumpur.

Sources said Syed Mokhtar was the preferred contender as he already owned ports and airports although another Putrajaya-friendly tycoon Datuk Siew Ka Wei was keen to purchase PPSB through Ancom Logistics Bhd, whose chairman Datuk Abdul Latif Abdullah used to be PPSB chairman.

PPSB is a wholly-owned subsidiary of MoF Inc while the regulator, Penang Port Commission (PPC), also reports to Putrajaya through the Transport Ministry. Prime Minister Datuk Seri Najib Razak recently named MCA president Datuk Seri Dr Chua Soi Lek to head the PPC.

Penang Chief Minister Lim Guan Eng wrote to Najib in early December to put in a bid to run the port, which has declined since the MoF took over in 1994. The port lost its free port status in 1974.

It is learnt that cargo volumes have failed to match Port Klang and Tanjung Pelepas, growing only 5.8 per cent a year between 1995 and 2009, against Klang which grew 14.2 per cent annually.

Syed Mokhtar’s Tanjung Pelepas port began in 1999 but now handles more than six million TEUs (twenty-foot equivalent units) a year, six times more than the one million TEUs in Penang.

Penang has complained that federal ownership of the port operator has worsened its financial position, with net debt rising from RM148 million in 2004 to RM832 million in 2009 — a 462 per cent increase in five years.

Apart from the debt, any company taking over PPSB will also have to find nearly RM400 million to dredge the port channel and attract larger vessels there.

PPSB is already carrying out dredging in the North Channel to ensure it goes from 11.5m to between 13.5m and 14.5m in the coming year.

Lim’s administration had sought to take over PPSB.

PPSB has been planning to privatise and float its shares on Bursa Malaysia since 1996, but it was not able to do so because of the loss-making ferry service. A plan to hive off the ferry operation to Syarikat Prasarana Negara Bhd last year also fell through at the last minute.

The ferry service has been a major hindrance to state-owned PPSB’s listing plans in the past due to the losses incurred, running into some RM13 million to RM15 million a year.

PPSB made RM77.74 million in after-tax profit in 2009, up from RM22.70 million the previous year despite revenues falling to RM268.54 million in 2009 against RM277.04 million in 2008.

State government sources said Lim could bring in enough businessmen and experts to run PPSB, which needed funds to deepen the port’s channel and also modernise its wharfs and berths.

“Lim has a few ideas to turn around the port and make it perform better,” a source said, pointing out that Penang owns the port’s land and waters and would have a say over who eventually owns PPSB.

Lim’s DAP colleagues had told Parliament on November 24 that Putrajaya should come clean on whether Syed Mokhtar had bought into the management of PPSB, which is led by Penang Umno leaders such as PPSB chairman Datuk Seri Dr Hilmi Yahya and its managing director, Datuk Ahmad Ibnuhajar.

A unit of Syed Mokhtar’s diverse infrastructure and logistics conglomerate was awarded a 4G network provider licence recently while another subsidiary is interested in acquiring the North-South Expressway (NSE).

Source: malaysian Insider

Tight capacity seen in container sector ahead

The container shipping industry is expected to experience tight capacity next year due to limited access to new capital or bank financing for ship building coupled with tight supply of new containers, said United Arab Shipping Co (UASC) Malaysia Sdn Bhd country general manager Desmond Yong.

“Trade volume is also expected to continue to grow in line with this year’s trend indicating a possibility of a global container trade reaching 11.1% growth or a total of 138 million twenty-foot equivalent units (TEU).

Desmond Yong ... ‘Security, environment and oil price will have major effects on the business.’

“Although various regional trade sectors may see differing demand as well as supply trend – vessel lay-ups, extreme slow steaming, service or capacity diversions will continue to be the options for lines to strike a balance in revenue.

“Looking ahead, three major factors will have major effects on the business, namely security, environment and oil price, which will require sector players to adjust their business process to a new mode of operation,” Yong told StarBiz.

In general this year, Yong said the trend of global demand was exceeding boxship supply due to cancellation of ship deliveries and the high demolition rate earlier this year.

As for Malaysia, Yong indicated that there were a number of positive developments which had materialised this year, with some shipping lines and manufacturing base making Port Klang their hub.

“The challenges ahead for next year is really on how Malaysia can focus on seizing this golden opportunity by enhancing and strengthening Port Klang, making it truly a convenient and business friendly hub for the shipping lines and manufacturers.

Yong said there were a number of areas that the country needed to benchmark against neighbouring countries in order to increase local efficiencies.

“As for shipping lines sustaining their hub at Port Klang, areas we do need to watch out for are some untimely and outdated practices and policies within the industry, which do not make it any easier for shipping lines to conduct their business.

“And there is indeed an urgent need by various authorities and sector players to jointly make the necessary improvements,” he said.

Meanwhile, Wilhelmsen Ships Service managing director Winston W.F. Loo foresaw a pickup in demand in the near term (next month) running up to the Chinese New Year festival, before it tapers off.

This year, Loo said it had been a decent year for container operators despite rates being “softer” compared to 2009.

“Rates for both the main East-West trades have remained fairly decent supported by shortage of containers as well as shortage of spaces in the early part of the year.

“Rates were as high as US$2,000 per TEU to European main ports during the first quarter.

“Unfortunately, the rates continued to slip from thereon by an average of US$200 per TEU per quarter.

“Present rates out from Malaysia hovers around US$1,300 – US$1,400 per TEU,” he said.

Going forth, Loo said many carriers had announced general rate increase (GRI) to be implemented with effect from Jan 1, with average increase of between US$250 and US$300 per TEU.

On the other East-West trade of Asia-US-Asia, Loo said it started off the year poorly, averaging US$1,800 (West Coast) and US$2,900 (East Coast), but gained strength during the second quarter.

“Implementation of the peak season surcharge of US$600 per forty-foot equivalent units (FEU) for West Coast and US$800 per feu (East Coast) in June were very successful.

“This success prompted the shipping lines to further implement a GRI averaging US$600 per feu (West Coast) and US$800 per FEU (East Coast) from July 1.

“Unfortunately, some could only hold for two weeks before mitigation starts creeping in due to both supply and demand pressures. After that, rates continued to decline.

Presently, Loo said the rates out of Malaysia hover around US$1,900 to US$2,000 per FEU (West Coast) and US$2,900 – US$3,000 per FEU (East Coast).

“In the near term, we foresee that volume to the United States out of Malaysia will remained stagnant, thus rates will remain under pressure going into next year,” he said.

Source: BizStar

Tight capacity seen in container sector ahead

The container shipping industry is expected to experience tight capacity next year due to limited access to new capital or bank financing for ship building coupled with tight supply of new containers, said United Arab Shipping Co (UASC) Malaysia Sdn Bhd country general manager Desmond Yong.

“Trade volume is also expected to continue to grow in line with this year’s trend indicating a possibility of a global container trade reaching 11.1% growth or a total of 138 million twenty-foot equivalent units (TEU).

Desmond Yong ... ‘Security, environment and oil price will have major effects on the business.’

“Although various regional trade sectors may see differing demand as well as supply trend – vessel lay-ups, extreme slow steaming, service or capacity diversions will continue to be the options for lines to strike a balance in revenue.

“Looking ahead, three major factors will have major effects on the business, namely security, environment and oil price, which will require sector players to adjust their business process to a new mode of operation,” Yong told StarBiz.

In general this year, Yong said the trend of global demand was exceeding boxship supply due to cancellation of ship deliveries and the high demolition rate earlier this year.

As for Malaysia, Yong indicated that there were a number of positive developments which had materialised this year, with some shipping lines and manufacturing base making Port Klang their hub.

Tamadam to divest unit?

Logistics and in-flight catering services provider Tamadam Bonded Warehouse Bhd is said to be contemplating spinning off its loss-making warehousing business and selling it to Amanah Raya Bhd.

However, when contacted by The Edge Financial Daily recently, managing director Eric Cheam declined to comment, saying that only once the board of directors was aware of any corporate exercise would it make an announcement as required by Bursa Malaysia’s guidelines.

Rumours are also circulating that the company is considering privatising its profitable food business, although management again declined to comment.

Tg Langsat Port revamp on the cards

The former executive director of Johor Port, Abdul Khalid Khan Lal Khan, is set to lead a revamp of Tanjung Langsat Port (TLP), which will include the set-up of a free trade zone.

According to sources, Abdul Khalid will take over the running of TLP to make it a full-fledged container port that will tap the demand in Pasir Gudang.

Dry-bulk shipping outlook still fragile

The outlook for dry-bulk shipping remains fragile as new deliveries of vessels are expected to flood the industry next year.

ABC News reported recently the global fleet of dry-bulk carriers was expected to outpace economic demand in 2011. It said this was the result of an industry buying spree two years ago before the financial crisis severely slashed sea trade.

The Baltic Dry Index (BDI), the barometer of commodity shipping, reached an historical high of 11,793 points on May 20, 2008 but six months later – on Dec 5 – it fell 94% to 663 points.

Year to date, the performance of the BDI has been satisfactory, averaging 2,823 points. It hit a high of 4,209 points on May 26 and a low of 1,700 on July 15. On Friday, the BDI was at 2,200 points.

According to a Bloomberg report, Capesize vessels, the largest of commodity ships, would drive the overall fleet expansion, estimated at 21%, while on average the global dry fleet is forecast to grow 15% this year, which might pull down the index.

Unless shipowners delay some of their new deliveries next year, the market outlook is seen uncertain.

Locally, the country’s largest dry-bulk shipping company, Malaysian Bulk Carriers Bhd (Maybulk), recently reported positive results for its third quarter ended Sept 30.

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.

How logistics players can help to meet NEM targets

They have to re-orientate the way they think of business, ops and processes

MALAYSIA is at a crossroad. It has done well to boost economic growth, thanks to sound economic strategies and management.

From being a developing nation dependent upon commodities and agriculture to power its economic growth, Malaysia is now one of the top 20 trading nations. However, it has fallen into ‘middle income trap’.

The economy, while more diversified today compared with three decades ago, is still reliant upon labour-intensive activities.

Malaysia’s vulnerability to external shocks, as seen during the recent global recession, underscores the urgent needs for the economic transformation to be more robust by climbing up the value chain.

Maritime players must boost efficiency in the production of goods and the provision of services.

The New Economic Model (NEM) provides the compass with which Malaysia can refer to in deciding which way to go from this crossroads.

Penang Port aims to handle more cargo

Penang Port Sdn Bhd aims to double the volume of cargo handled from the one million 20-foot equivalent units (TEUs) it looks on course to achieve this year.

Managing director Datuk Ahmad Ibnihajar said the company was in the process of formulating a new five-year plan.

Speaking after handing out excellent service and long service awards to 59 employees in Penang last week, Ahmad said the port handled 958,476 TEUs last year and was confident of reaching one million TEUs this year.

On another development, he said that works to deepen the North Channel to 14.5 metres, from 11 metres, was expected to begin next year.

"The deepening needs to be done to accommodate demand that will arise from the Northern Corridor Economic Region (NCER) initiatives.

"A deeper channel will enable goods from Kedah and Perlis to be brought here to Penang and then transported out," Ahmad said, adding that the deepening was likely to take more than a year.

It was reported last month that Penang Port had hoped that the federal government would speed up the channelling of funds for the project, as announced under the 10th Malaysia Plan.

Source: Business Times