The country’s largest port expects volume to rebound for a 3%-4% growth this year
By SHAHEERA AZNAM SHAH / Pic By TMR
Port Klang’s overall volume is expected to rise between 3% and 4% this year, after a difficult 2017 following the shipping industry’s realignment and the formation of a new alliance that saw carriers moving their cargoes to Singapore ports.
The country’s largest port — which is home to two operators, Westports Holdings Bhd and Northport (M) Bhd — expects volume to rebound, helped by the industry’s growth.
Port Klang Authority (PKA) GM Captain K Subramaniam said PKA, together with the port operators, is currently focusing on reinstating the confidence of major players in the shipping industry.
“We need to have more major shipping lines coming to Port Klang because many of them had departed, and it is a big challenge for us.
“We will talk to (shipping lines) directly, asking what they want and if it is a capacity problem, we are already looking at expanding Westports.
“For example, the Westports’ expansion has been approved by the government, but the feasibility study will still need a year for the project to be proven environmental-impact friendly,” he told The Malaysian Reserve at the Malaysia World Maritime Week 2018 in Kuala Lumpur yesterday.
Subramaniam added that Port Klang has recorded an encouraging growth based on its July performance.
“The unofficial July figure has been good and an early indication shows that Westports will have a double-digit growth.
“Compared to the previous month, June’s performance was pretty flat due to the long festive holiday. If we can sustain the July performance, we will be able to achieve an easy 3%-4% growth for the year.”
Subramaniam said Port Klang had lost 10% in container throughput following the realignment of global shipping alliances in April 2017.
“Last year, we lost about 10% compared to our volume in 2016. We have been doing well for the last 15 years, but last year there was a blip because of the movement of shipping alliances to (Singapore).
“On top of that, there were many mergers and acquisitions that made the shipping lines favoured other ports. But this condition is seasonal and something that we have to manage,” he said.
He said the encouraging local economy will boost the organic growth of cargo and container throughput, in addition to beefing up the transshipment service.
“This year, we are trying to get back the volume through export and import cargo and the transshipment, but the latter is quite a challenge because the transshipment volume is (what) all ports are fighting for.
“We are lucky that our local economy has been very well, in the sense that our import and export increased about 10% last year and it grew another 10% for the first six months of this year. That itself gave some volume to us, but it is the trans-shipment that adds up more.”
He said by beefing up the transshipment volume, it will allow for a less expensive shipping cost as exporters have the choice to export from local ports.
“While our indigenous boxes volume is good, trans-shipment is important because the shipping lines come in and connect our import and export.
“Otherwise, exporters have to go through neighbouring ports that will incur higher cost,” Subramaniam said.
He said securing the major shipping lines requires vibrant port amenities with a higher capacity-handling level and a completed infrastructure in the surrounding area.
“We have to be careful in expanding our ports because it could affect the supporting infrastructure, such as the road and rail and whether they can cater to extra capacity.
“There is no point if we still use the same road to cater to the expansion, the road will be heavily congested,” he said.
Subramaniam said the port of call will depend on the efficiency level of a port despite the low charges it could offer.
“The shipping lines are looking at other services provided at the port such as the bunkering, which is the ship’s refuelling and they need that to be done efficiently.
“Sometimes the price is the problem. Compared to the price in Singapore, our ship refuelling cost is slightly more expensive. However, for the port call charges, we are definitely cheaper at about 30%. But the price is not everything.”
On the country’s future port projects, Subramaniam said there is an urgency to cater to more capacity at Port Klang as it continues to grow.
“Port Klang will continue to grow amid the shifting in shipping alliances and Westports and Northport have been completely utilised.
“We need more capacity handling, either by expanding our current port or building a new one, such as the Carey Island Port.
“For the time being, Westports’ expansion promises 15 million twenty-foot equivalent units (TEUs) for the next 20 years. I think that may be enough, but there is no harm for the Carey Island Port to come up with other businesses such as non-container services.”
Speaking at the same event, Deputy Transport Minister Datuk Kamarudin Jaafar said the government will maintain all port projects and initiatives that are considered “proper” and aligned with the current administration’s standard of practice.
“We will maintain those decisions that are considered ‘proper’. For projects that have yet to be spent on and not following the standards that we now adopt, they might be reviewed,” he said.
Kamarudin said the ministry will be reforming the transportation policies that involve the state governments.
“We will maintain certain policies and plans such as the Malaysia Shipping Master Plan, but they need to be reviewed. We will be coordinating with the state governments in transforming the transportation policies, especially the shipping policy.”