Northport Expects Cargo Volume To Increase 10-15 Per Cent

NCB Holdings Bhd's direct subsidiary, Northport (Malaysia) Bhd, is expected to register an increased cargo volume of between 10 per cent and 15 per cent this year.

Northport Managing Director and Chief Executive Officer, Datuk Basheer Hassan said the company sees an increase in both the container and cargo business segments amid an improving economy.

"Northport registered a total volume of 2.858 million TEUs in 2009, a decrease of five per cent compared to 3.006 million previously," Basheer told reporters after NCB Holdings' annual general meeting (AGM), here Monday.

He said the container mix at Northport stood at 50 per cent for both import and export containers.

Transshipment containers made up 38.6 per cent of the total volumed handled by Northport.

Under the conventional cargo business, Northport handled a combined volume of 6.53 million freight weight tonnes (FWT) last year.

Meanwhile, NCB Holdings Group's chairman, Tun Ahmad Sarji Abdul Hamid said Northport continued to be the leading gateway for indigenous trade, handling 58.6 per cent of the country's import and export volume passing through Port Klang.

He said the total volume of containers under all classes handled through Port Klang during 2009 was 7,309,779 TEUs, reflecting a decline of 8.3 per cent compared with 7,973,579 TEUs recorded in 2008.

On the planned construction of Wharf 8A, Ahmad Sarji said the group remained ready to re-activate the plan.

It would be to meet its customers' demand for enhanced capacity to service their growth in business.

"Given the current growth, we are quite optimistic that we need to expand the capacity. This was held back in 2009 in the last quarter because of economic downturn."

With the indication of growth now, it would be sustainable to invest, said Basheer.

He said Northport will call for tender in one or two weeks for building of the wharf.

The size of the wharf will be 300 meters in length and 17 meters in depth.

This will allow ships to berth at any one time there, he added.

-- BERNAMA

Century Logistics charts growth strategy

Century Logistics Holdings Bhd (7117), a supply chain management and logistics provider, is reviewing its business model in Thailand, after charting some RM2 million in losses there.

"We want to go slow in Thailand and not put too much hope there. The risk is too big," its managing director Steven Teow Choo Hing told Business Times in an interview.

The group has invested some RM35 million in the country since 2004.

Last year, the group through its subsidiary, Century Logistics Sdn Bhd, completed a RM30 million warehouse-cum-distribution centre in Rojana Industrial Area, 70km off Bangkok.

The initial plan was for the facility to cater to multinational corporations (MNCs) with operations in the vicinity.

Besides Thailand, the group also has a presence in China and India.

While Vietnam was another target market for expansion for its total logistics and supply chain management division, Teow said the group has held off its plans to enter the market in view of the inflationary issues there.

In China, the group is head hunting for a country manager to lead its operations there.

"We want to focus on growth areas that are heavily populated like Shanghai and Beijing," he said.

In India, Century Logistics provides contract logistics services to the MNCs in Chennai and Bangalore.

Teow said, however, the business in India is challenging because of the different duty structures that each state applies.

On its procurement and assembly services, Teow said the company is also looking at replicating its assembly unit success with Syria in Ghana, Africa.

He also said there are plans to expand its oil and gas division to include ancillary logistics operations.

Currently Century Logistics offers only bunker supply services.

Overseas operations contribute about 10 per cent to the group's revenue.

Century Logistics registered a net profit of RM20.9 million on revenue of RM210.9 million for the financial year ended December 31 2009.

Source: Business Times

Maersk aims to sail into 'modest' profit

COPENHAGEN: Danish shipping and oil group AP Moller-Maersk said it would return to a "modest" profit in 2010 after weak global trade knocked freight rates and dragged it to a deeper loss than expected for 2009.

Chief executive Nils Smedegaard Andersen said the container shipping business would remain in the red this year though other operations - from oil and gas to offshore services, port terminals and supermarkets - would continue to perform well.

"We hope that 2009 will be an exception," Andersen said. "Priority No. 1 is to return to profit. We are not guaranteeing that we will be back in the black in 2010, but at the moment it is our strong ambition and expectation to deliver a profit this year.

"We do not expect the container line to be back in profits in 2010," he said. "Rates have improved but they are still not at a level where they can give acceptable profitability."

Net losses at the company, which owns the world's biggest container shipping company, Maersk Line, amounted to 5.49 billion Danish crowns, or US$1.01 billion (US$1 = RM3.37), in 2009 after a profit of 17.53 billion in 2008.

The result was weaker than the average estimate of a net loss of 5.11 billion crowns in a Reuters poll of 13 analysts, whose estimates ranged from losses of 1.56 billion to 7.37 billion crowns.

The result was in line with the company's own guidance for a loss of around US$1 billion.

"The main factors driving (results) down of course were low rates in containers and in tankers as well as a significant drop in the oil price - these were really the negatives of last year," Andersen said.

Despite the loss, Andersen said that the group could be satisfied with its achievement of reducing costs by about US$2 billion in 2009 which left it with cashflow from operations of US$4.7 billion, which he called "pretty strong".

Maersk would continue to focus on costs and efficiency this year, though the cost-reduction effect would be lower than in 2009, he said.

Shipping markets were hit hard last year by the global economic downturn, which reduced freight volumes and rates.

Freight rates for the group's container activities were 28 per cent lower than in 2008, Maersk said in a statement.

Andersen said that the most negative effect in 2009 came from the shipping industry's "willingness and capacity to take rates down below cash operating levels".

Looking ahead to the current year, the company said: "Overall, the AP Moller-Maersk Group is expected to post a modest profit. Cash flow from operating activities is expected to be well above the 2009 level."

Asked to quantify "modest", Andersen said:

"We are talking black but probably small numbers.

"The 2010 guidance is very disappointing, with management expecting a modest positive result," Jyske Bank said in a note, comparing that with market consensus of a 2010 profit of 9.1 billion crowns.

The container shipping division incurred an operating loss of 10.06 billion crowns, while Maersk's oil and gas business made an operating profit of 25.33 billion crowns.

The container shipping loss was bigger than analysts' average forecast of a loss of 9.22 billion crowns, and the oil and gas profit below their average estimate of 26.11 billion in the Reuters poll. -

Source: Business Times

Tg Agas industrial park infrastructure on track

INFRASTRUCTURE works for the RM8 billion Tanjong Agas Oil & Gas and Logistics Industrial Park in Pekan, Pahang, is expected to be completed by 2012.

Tanjong Agas Supply Base & Marine Services Sdn Bhd (TASBMS) managing director Mohd Faidzal Ahmad Mahidin said it is completing the road access, groundworks and necessary infrastructure to enable companies to move in soon.

"We expect to see companies moving in and constructing manufacturing facilities at their respective plots of land by the middle of this year," he told Business Times in Kuala Lumpur last week.

At least 200 companies are expected to support operations at the industrial park's shipyard.

Mohd Faidzal said TASBMS has also secured the support of several players, both foreign and local, to operate at the industrial park.

"We expect to see more companies coming on board soon," he said, noting that the project will be hastened and its economic impact felt within the year.

It was reported previously that among the companies that planned to invest in the industrial park include Core Competence Sdn Bhd, Competent Selection Sdn Bhd, Vantech Dockyard (M) Sdn Bhd, Tec-Steel Manufacturing Sdn Bhd, Usatech Marine (M) Sdn Bhd, Bitari Abadi Sdn Bhd and Damini Corp Sdn Bhd, with total investments worth RM6 billion.

Facilities to be available at the 1,699.68ha Tanjong Agas Oil & Gas and Logistics Industrial Park include a shipyard, fabrication yard, dredger yard, bulk terminal, petroleum terminal and warehouses, factories and commercial and residential development.

"Besides land for the industrial park, we have allocated 607ha for commercial which will house among others headquarters of respective companies operating in the industrial park and other supporting companies," Mohd Faidzal said.

The area is being developed concurrently with the industrial park.

Upon completion, the Tanjong Agas industrial park will be a modern one-stop service centre and offshore base and is expected to create over 30,000 jobs within 10 years with the first 5,000 jobs to be generated within the first three years of operation.

Pahang state government's investment arm, Perbadanan Kemajuan Negeri Pahang, holds a 30 per cent stake in the industrial park, and the rest by TASBMS.

Source: Business Times

Trade eyes alternate routes, oil buffers over Malacca risk

Oil traders are concerned about supply disruptions via the Malacca Strait after the Singapore Navy warned of possible attacks on tankers, but said alternate routes could be used that add slightly to costs while stocks on landed and floating storages offer ample buffer.

However, they cautioned that the more than 30 tankers crowding the waters off Singapore, Malaysia and Indonesia used as storage tanks for distillates, fuel oil and crude could also be targets.

Malaysia and Indonesia are bolstering security in the Strait of Malacca, through which flows at least 15 million barrels of oil each day, while Singapore also raised alert levels and beefed up security at its airport and new casino resorts after the navy’s warning.

“Of course, we are concerned. But there’s nothing more that we can do on our part as the cargo owners to prevent this from happening,” a senior Singapore-based Asian trader said today.

“The alternatives are easy enough. The diversion around Indonesia adds two to three days to sailing time and costs a little bit more, but that’s OK.”

The trader said in the event of an attack on a tanker, the loss of a single cargo might be a problem for the owner, “but it’s an opportunity for everyone else to sell at higher prices”.

If the strait was blocked after an attack, tankers could sail further south along the western coast of Indonesia’s Sumatra via the Sunda Strait and head north to Singapore, adding two to three days of sailing time. Ships moving to North Asia could sail towards East Java via the Lombok Strait or Banda Strait.

For example, this would add US$20,000-US$30,000 (RM68,000-RM102,000) per day to the cost of carrying diesel or kerosene on an 80,000-tonne tanker.

Traders said the loss of a single cargo, even if it was on board a Very Large Crude Carrier (VLCC), would have minimal impact on the market’s demand-supply dynamics because for distillates alone, some 14 million barrels were being stored on tankers in international waters around Southeast Asia.

“It could be disruptive to oil trades, but it would be not catastrophic,” said David Kirsch, PFC Energy’s Director of Market Intelligence Service.

“It would also raise insurance rates, but typically the price of oil rises in conjunction with these insurance rates, so the impact is on the consumers, not the transit trade.”

Shipping and industry groups have advised shippers to take extra care when passing through the Malacca Strait and have increased vigilance on their vessels.

Traders also said there were about 4 million to 5 million tonnes of fuel oil and crude on board converted VLCCs anchored off Malaysia’s southern ports of Tanjong Pelepas and Pasir Gudang.

While these provide a comfortable cushion to the market if an attack triggers serious disruptions, they also face risks.

“They are as vulnerable as any tanker sailing along the Strait. But maybe less of a risk, because they are in closer proximity with each other and help can be rendered more readily,” said a trader, who has cargoes on floating storages.

“Also, it’s probably less dangerous because fuel oil and distillates are less flammable. But I don’t think these crazy guys are going to have the intelligence to check what’s on board before they decide to go after a ship.”

Carl Larry, president of Oil Outlooks and Opinions LLC said a global market struggling with oversupply would view disruptions such as a closing of the Malacca Strait or the refinery damage in Chile as supportive factors.

“As with Chile, the refined products that are in great oversupply are already water-borne and easy enough to move around the Strait,” he said, pointing to recent moves to send diesel to the quake-hit Latin American country, which have sent gas oil cracks to 11-month highs near US$10 a barrel.

“I think there is the shock and hype factor about the delay for ships to get through, but the supply that so many are desperately looking to move gets a chance to ease.”

Still, most traders welcomed the heightened security in the Strait, which has been plagued by piracy, adding that this would help deter attacks and ease their worries.

“I would expect the Strait to be very heavily patrolled, and the likelihood of any attack materialising is quite low — you have all that security on standby to prevent it from happening,” said a distillates trader with a European firm.

Source: Malaysian Insider

Terror threat in Malacca, Singapore Straits

Authorities have said that a terrorist group may be planning attacks on ships in the Straits of Malacca and the Singapore Straits.

International Maritime Bureau piracy reporting centre head of Asian region Noel Chung said the organisation was alerted by a foreign agency to this threat and has passed on the alert to the relevant regional authorities in Malaysia, Singapore and Indonesia.

He said that while threats of piracy were common in both straits, a terror threat against ships was new to the waters.

“This alert was not issued by us, so we cannot tell you what level or how serious the threat is,” he told The Star.

Chung advised ships plying both straits to be extra vigilant and conduct radar lookouts.

“Usually, ships keep a lookout after dark to thwart pirate attacks. We are advising them to keep a 24-hour watch,” he said.

International news agency AFP reported that an unidentified terrorist group is planning attacks against oil tankers in the Malacca Straits, one of the world’s busiest shipping lanes, quoting the Singapore Navy and a shipping association on Thursday.

The Singapore Shipping Association said it had received an advisory from the Singapore Navy Information Fusion Centre about “an indication that a terrorist group is planning attacks on oil tankers in the Malacca Straits.”

It said “this does not preclude possible attacks on other large vessels with dangerous cargo.”

“The terrorists’ intent is probably to achieve widespread publicity and showcase that it remains a viable group,” the Singapore Navy said in its advisory.

It reminded shipping operators that the militants could use smaller vessels such as dinghies and speedboats to attack oil tankers and urged them to take precautions.

Pirates and robbers have also used small fishing vessels to board ships during previous attacks in the Malacca Straits, it noted.

Security analysts have said that the Malacca Straits, bordered by Singapore, Malaysia and Indonesia, is a prime target because more than 30% of global trade and half the world’s oil shipments pass through the narrow waterway.

“If the Singapore Navy is providing this information, it should be taken very seriously,” said John Harrison, a maritime security expert at the S. Rajaratnam School of International Studies in Singapore.

He said that on the threat level scale, an “indication” is lower than a “warning”, but precautions should still be taken.

A “warning” refers to a credible threat that an attack is likely to be carried out against a target over a specific time frame, while an “indication” is gathered from a series of suspicious activities in a certain area.

“Certainly, we do know that there has been a long-term concern about terrorism in the Malacca Straits but the threat level remains fairly low,” Harrison told AFP.

“That said, it was very prudent for the Singapore Navy to pass this warning along because it keeps the threat level where it is.”

While the Singapore Navy did not name any group, Harrison said the South-East Asia-based Jemaah Islamiyah (JI) militant group or al-Qaeda itself could not be ruled out.

“JI could certainly be one of the groups. We have not seen any public evidence indicating they have the capability to operate but that does not mean they are not developing them,” he said.

In its advisory, the Singapore Navy recommended that ships should “strengthen their onboard security measures and to adopt community reporting to increase awareness and strengthen the safety of all seafarers,” according to the shipping association.

Singapore, one of Asia’s most affluent cities and a regional base for thousands of multinational companies, is a prime target for attacks by militant groups, officials have said.

One of the plots foiled by Singapore authorities was a plan by Islamic militants to hijack an airliner in Bangkok and crash it into Changi airport in 2001 following the September 11 attacks that year in the United States.

Singapore has also arrested several militants involved in a plot to bomb the US embassy and other targets in the city-state.

Source: The Star

MISC pre-tax profit down 38pc in Q3

MISC Bhd reported a 38.6 per cent drop in its pre-tax profit of RM191.627 million for the third quarter ended Dec 31, 2009 from RM312.146 million in the corresponding quarter of 2008.

Its revenue of RM3,047.1 million for the quarter was 17.2 per cent lower than RM3,679.2 million recorded in the previous corresponding quarter.

In a statement today, MISC said the reduction was mainly due to lower profit in the Petroleum business and higher losses in the Liner and Chemical businesses.

The group’s cost reduction efforts have led to lower operating costs of revenue especially in cargo costs, charter hire payable and slots payable, it added.

For the nine-month period ending Dec 31, 2009, MISC said its pre-tax profit dropped to RM625.762 million from RM1.369 billion in the corresponding period of 2008, while revenue fell to RM10.468 billion from RM11.784 billion.

On the industry, it said it would continue to be challenged by low demand and excess tonnage.

The recent pick-up in demand has absorbed some of the excess tonnages resulting in freight rates rebounding from 2009 downtrend.

The recovery in freight rates is expected to continue over the short to medium term, it said.

MISC’s earnings for the medium term will continue to be underpinned by the long term charters in its LNG and offshore businesss as well as growth in its heavy engineering division.

Source: Malaysian Insider

PKA won't extend grace period for enforcement of new rules

Port Klang Authority (PKA), the regulator of Northport and Westports, said it will not extend a three-month grace period on enforcing changes to rules that require shippers to pay storage charges for full-container load (FCL) cargo at Port Klang after 72 hours.

FCL refers to a container containing cargo belonging to one consignee in the vessel's manifest.

"We have heard their (shippers') concerns and have given them enough time to put things in place. We have now come to the stage where we will go ahead and implement the change in policy," PKA general manager Kee Lian Yong told Business Times in an interview.

The implementation of the new law reducing the period in which containers can be stored at Port Klang for free from five days to three, has been postponed several times in the last eight years, following objections from some players in the shipping community in Port Klang who feel they were not quite ready yet.

The last deadline that PKA had set was January 1 2010. While the authority actually pushed through with the implementation, it was not without some relaxations.

For one, free storage charges are now based on a calculation of hours (72 hours) instead of days (three days).

PKA also said it will waive the storage charges if delays are caused by Customs, other government agencies or the terminal (Northport or Westports) itself.

Kee said during this three-month "grace" period, the authority will also carry out a pilot run of a new monitoring system, which will determine the accountability of each party as per their committed key performance indicators (KPIs).

"The pilot run is to test the information technology system that has been put in place, which will calculate the amount of period in which the containers are stored at the port," said Kee.

"If any boxes go beyond the 72 hours free-storage period, we can pick them out and go back to the industry players to find out who was the one that caused the delay. We can go back to the logistics players concerned and see how they can improve this particular bottleneck.

"We don't think it would be a problem to address this issue. Come April 1 2010, we are confident that the three-day free storage period ruling will go through and the offenders will be penalised," he added.

It was reported that 80 per cent of the containers in Port Klang could be cleared within three days, but the remaining 20 per cent, or 10,000 containers, could not be done within the short period.

"Sometimes you need punitive measures to accelerate enforcement. All this while, we have delayed its implementation. People have given their commitment but they have treated it so easily. They keep on complaining that they can't do this or that. But now we have more or less sorted out most of the problems," said Kee.

"We hope to help this small percentage of port users to move (their containers) faster. They have to change. Otherwise they will keep on delaying everybody else. Actually they are holding themselves back for reasons they know best," he added.

Nonetheless, shipments from the ports in Asean countries have been given until December 31 2010 to comply with the reduced free-storage period.

"Now is the best time for us to put this policy in place rather than wait for another two years when port activity starts to get busy. This lull period should not be taken as a time for us to slow down," said Kee.

Source: Business Times

Signs of recovery in container shipping but industry players are cautiously optimistic of 2010

Container shipping, the worst-hit shipping segment in the global economic downturn last year, is showing signs of recovery but industry players are being cautiously optimistic.

Maersk Line, the world’s largest liner company, sees an uphill climb for the industry this year.

Maersk Malaysia Sdn Bhd managing director Omar Shamsie told StarBiz that container shipping had seen significant value destruction last year and it must be prepared for an uphill climb this year.

“Last year, many shipping companies had postponed existing orders for new vessels, idled existing vessels and increased their scrapping programmes,” he said.

“All these in an effort to take the cost out and better match capacity to the prevailing demand where these combined actions had resulted in a larger-than-expected impact on vessel fleet growth and helped create tighter capacity.

“We expect this situation to continue in 2010 and this in turn will help increase rates further. But, although freight rates have increased in the last four to five months, they are still at a historic low level, and it will be a while before they reach a stage of sustainable returns,” Omar said.

Global markets are showing signs of recovery, but the outlook for the shipping market is still uncertain, according to Omar.

“We believe there is a positive momentum for growth due to a pick up in demand and efforts to curb capacity increases, but it will be a modest growth rate compared to an industry yearly average of 10% in the last 30 years.

“It will be a while more before traditional consumer markets like the US and Europe return to their former strength, and this will contribute to the modest growth rates we expect in the near future in container volumes,” he said.

The shipping industry went through what had been described as its worst period in the post containerised era with the highest number of ships laid idle at the height of the global economic downturn last year.

In November 2008, freight rates in the Asia-Europe trade were slashed by more than 50% compared with the previous year and major shipping companies took evasive measures by cutting down on capacity and consolidating services.

In the same month that year, Singapore-based Neptune Orient Lines (NOL) disclosed that its shipping unit, APL, would reduce its capacity in the Asia-Europe trade by about 25% and by around 20% for its trans-Pacific trade.

Maersk Line had then also cut back on its Asia-Northern Europe network, resulting in a temporary removal of its AE8 service in November 2008.

And in the middle of last year, MISC Bhd announced its withdrawal from Grand Alliance, the world’s largest container shipping alliance effective Jan 1 this year.

Drewry Shipping Consultants Ltd believes that the industry has seen the worst of the global recession, but has forecast a very cautious recovery this year with the global container traffic expected to increase by 3.4%.

It said that rising container freight rates on many routes should not fool the industry into thinking that there was a full-scale recovery going on.

“This year will continue to be a very challenging one for all major stakeholders, even if we appear to have seen off the worst of this awful trade trough,” Drewry said.

Drewry Container Forecaster editor Neil Dekker said several large container operators would have “gone to the wall” in 2009 if major benefactors or governments had not stepped in to bail them out.

“There is a strong argument for thinking that if a major carrier had been allowed to fail, the market would have had a much better opportunity to correct itself and lay the foundations for a more profitable industry in the long term.

“A fairly large chunk of capacity would have been taken out of the market, allowing load factors and freight rates to improve,” he said in statement.

Dekker said even if the industry could secure the same amount of fresh cash in 2010 as it received from shareholders last year, it would not be sufficient to cover its needs.

“Another estimated US$1.4bil of cash may need to be found from other sources to keep the carriers trading. This may then prove to be the catalyst that leads operators to start selling assets – such as their terminals,” he said.

source: the star

Tanjung Manis Port to become gateway for central Sarawak

The Tanjung Manis Integrated Port is to become the primary import and export gateway for Sarawak central region when it begins full operations by next year.

The port, a subsidiary of Sarawak Timber Industry Development Corp (STIDC) and appointed by Rajang Port Authority as its port operator in Tanjung Manis new township, had shown encouraging performance since commencing operations in July last year.

As at October 2009, it had received 11 vessels and handled 2,383 TEUs (20-foot equivalent units), said STIDC general manager and Tanjung Manis Integrated Port chairman Datuk Len Talif Salleh in the latest issue of Perkasa, the bi-monthly newsletter published by the corporation.

Currently the port, which is accessible to 20,000 GRT (gross register tonnage) vessels, has the capacity to handle up to 200,000 tonnes of general cargo and 25,000 TEUs a year.

He said the existing 203m wharf would be extended by 200m to enable the port to handle an annual capacity of 200,000 TEUs and 6 million tonnes of general cargo by next year.

When fully operational, the port is expected to be equipped with state-of-the-art cargo-handling facilities such as quay cranes, mobile harbour cranes, rubber-type gantry cranes and reach stackers, said Len.

He said the port was envisaged to play a pivotal role in the shipping industry with the completion of the Sibu-Tanjung Manis road by this year and support the various industries in the hinterland, particularly the Tanjung Manis Halal Hub and other projects planned under the Sarawak Corridor of Renewable Energy (Score).

"With better facilities and a team of dedicated and experienced workforce, Tanjung Manis port promises efficient services apart from reducing vessel turnaround time due to its closeness to the sea," he said.

Len said the port's strategic location and natural deep water complemented its role as the central region's transshipment hub.

Meanwhile, the 77,000ha Tanjung Manis Halal Hub is expected to attract at least RM9 billion worth of investments for upstream and downstream halal food processing activities , which will create about 10,000 jobs, besides other economic spin-offs.

Source: Business Times

No impact yet of cabotage policy change on cargo shipment business

The Ministry of International Trade and Industry has yet to see the impact of the partial liberalisation of the Cabotage Policy on the cargo shipment business in Sabah and Sarawak.

Its Deputy Minister, Datuk Jacob Dungau Sagan, said the government needed more time to evaluate the impact as the partial liberalisation was only introduced last May.

"The ministry is monitoring interests among foreign shipping companies to go directly to the designated ports in the two states.

"The growth in volume of exports will also be monitored to assess the impact of the policy change," he told a media briefing after officiating at a seminar on "Trade Liberalisation and Government Assistance" here on Monday.

Sagan said the Cabotage Policy change was among the measures taken by the government to reduce freight costs of goods coming to and from the two states.

He said the partial liberalisation allowed foreign vessels to carry containerised transhipment cargo directly to Sabah and Sarawak without a need for a domestic shipping licence.

"It involves the cargo movements between the ports of Sepanggar in Sabah, Bintulu and Kuching (Sarawak) with the ports of Klang and Tanjung Pelepas and vice versa," he said.

Meanwhile, Sagan said he wanted more importers and exporters in the two states to join the Malaysian National Shippers Council, which had been vocal in calling for the review of the policy.

He said currently there were 25 organisations in the council with only one from Sabah and none from Sarawak.

"We want more shipping companies, or through their business associations, to join the council so that their voices can be heard to provide inputs to the government in formulating policies," he said.

Source: StarBiz

Port Klang container, cargo throughput down

Container traffic through Port Klang, the country's busiest container port, fell by 8.3 per cent last year, as the global economic downturn continues to hurt the country's exports.

The port handled 7.3 million TEUs (20-foot equivalent units), the standard measurement for shipping containers, compared with 7.9 million TEUs in 2008.

In terms of tonnage handled, traffic through the port was 133.8 million tonnes, down 8.8 per cent over the previous year.

More than half, or 61 per cent of the container volume, was from Westports, which generated 4.451 million TEUs. Northport accounted for the remaining 39 per cent or 2.858 million TEUs.

Transhipment cargo took the largest share of Port Klang's total throughput, contributing 58 per cent, with local boxes constituting the remaining 42 per cent .

However, transhipment volume also saw a 9 per cent drop to 4.3 million TEUs for the 12 months.

Port Klang Authority (PKA) general manager Kee Lian Yong said the decline in container and cargo throughput is in line with the global trend.

"(Nevertheless,) the port's container volume was better than our earlier forecast of a 10 per cent drop. Overall Port Klang also fared better than other major ports in the world, which saw a 10-15 per cent drop in traffic," he told Business Times.

Kee said Port Klang is expected to post throughput growth in 2010, returning to 2008 volume of 8 million TEUs.

"We remain cautiously optimistic as the shipping community is predicting that 2010 will still be a tough year," he added.

According to Drewry Shipping Consultants Ltd's most recent projections, the market will have to wait until 2012 before global container port volume exceeds 2008 levels again. It expects Far East and Southeast Asian container traffic to recover faster than that in other regions.

"In 2010, the market should brace for another tough year," Shipping Association of Malaysia chairman Ooi Lean Hin had said in an earlier interview .

Source: Business Times

Port Klang: Mixed views on shorter container storage period

Industry players have mixed views on the reduction of free storage period for full-container load at Port Klang to three days from five that came into effect on Jan 1.

It now means that containers, regardless of whether they are for export or import, are only given three days without charge at Northport and Westports.

Cranes loading containers onto a ship at North Port, Port Klang.

The idea, mooted by the Transport Ministry in 2002, had seen numerous postponements and deferments.

The last deferment was made in June last year by the Port Klang Authority (PKA) due to the global economic downturn.

However, for the implementation this year, PKA had taken into consideration some of the concerns raised by the port users.

For example, it has directed the two terminals to calculate the free storage period based on hours (72) instead of days, and to waive the storage charges if delays are caused by Customs, other government agencies, or the terminals themselves.

The terminals were also told to maintain the five-day free storage period until Dec 31 for shipments from Asean ports.

MultiCargo Express Sdn Bhd chief operating officer Robin Hoh said the reduction in the free storage period was good as it would enable Port Klang to function more efficiently.

“This has been practised in most European countries for quite some time now whereas certain countries only give consignees a day to clear their cargo,” he told StarBiz. “Also, the turnover will be faster, thus profiting not only the carriers, but the ports and depots as well.”

“But, if we want this implementation to be successful, all related bodies for the clearance and delivery of cargo must be more focused and committed,” Hoh added.

On the expected challenges of the new ruling, he said that on festive holidays, all departments and authorities from the points of entry to exit must be highly efficient to run things smoothly.

“In this case, pre-submission of documents for cargo clearance should be practised,” he said.

Transways Logistics (M) Sdn Bhd president and chief executive officer Edward Chan supported the shorter free storage period but thought the timing of the implementation was wrong.

“We are still recovering from the global economic downturn. Furthermore, some types of cargo need more than three working days to be cleared.

“For example, for import cargo, before we can pay the duty, we have to calculate and confirm with our clients. And sometimes cargo needs approval from some government agencies that may take more than three days,” he said, adding that about 30% of the cargoes handled by Transways were cleared in two to three days.

Another logistics player also said the implementation at this point of time was inappropriate as it would hurt the businesses and their clients.

Meanwhile, Wilhelmsen Ships Service managing director Winston Loo said shortening the free storage time was a positive move.

“It should make the entire logistics chain more efficient. And, in doing so, would further improve Port Klang’s competitiveness in the region,” he said.

Loo also believed that sufficient time had been given to all stakeholders to re-engineer their processes to meet the new ruling.

“Thus, while we do expect some hiccups, I believe all the stakeholders will be able to overcome the shortcomings,” he said.

Source: StarBiz

Tanker, dry bulk marts may remain in rough waters

Companies in the tanker and dry bulk shipping markets are not expecting a strong recovery until 2012, as freight rates are likely to remain depressed in the next two years.

"The short-term scenarios are not strong and the (dry bulk) market is expected to worsen until at least 2011," Global Maritime Ventures Bhd chief executive officer Norulhadi Md Shariff told Business Times via e-mail.

Chemical tanker rates and earnings are expected to remain bearish in 2010, with a recovery in freight rates possible in 2011, should there be positive world gross domestic product growth.

"We don't foresee a big leap in freight rates for tankers next year due to the anticipated small growth in the world economy. If there is growth in the world economy, we foresee a lower tonne miles being moved as more refineries are being built nearer to the place of consumption," Norulhadi said.

On the dry bulk market, he said the Baltic Dry Index (BDI), which measures changes in the cost to transport raw materials, has shown a 12 per cent decline since mid-November 2009 mainly due to over stocking of iron ore and coal by China and India.

The index is, however, expected to rise after Chinese New Year, when the Chinese start restocking coal and iron ore.

"We expect the BDI will not be hovering very much off what we saw the last 15 months. Likewise for the tanker market, we don't expect any miracles," Norulhadi said.

Maritime Institute of Malaysia (Mima) research fellow Nazery Khalid, however, is more optimistic on both segments.

"Based on major economic indicators and patterns of new building orders, scrapping activities, freight rates, vessel prices, fleet deployment and port throughput, one can be bullish about the prospect of the dry bulk segment in 2010," Nazery said.

He said China almost single-handedly propelled the bulk segment's recovery from its slump of last year, and upticks in the economies of Europe and emerging economies in Asia have also contributed to the segment's rebound.

"As China accounts for a third for global demand for bulk shipping, its economic performance will be keenly watched by bulk shipping players.

"I am confident that China should be able to register a growth of around 9 per cent as forecast, provided there is no untoward events and developments that may put a spanner in the growth of its economy and the global economic recovery," Nazery said.

On the tanker segment, he said major economic indicators point to the dawn of a global economic recovery, which should support demand for oil and other tanker cargoes. This will be good news for tanker owners.

Source: Business Times