16 PARTNERSMEETING REQUIREMENTSShipping AssociationMalaysia (SAM)OOI LEAN HINChairmanShipping Association Malaysia (SAM)www.sam.org.myIMPROVING TRADELast year, the global container shipping industryreported a total loss of more than USD15 billion(RM48 billion) due to overcapacity and price wars.During the crisis, shipping lines have cut capacity,laid up vessels, laid off people and all this hasalso affected shipping’s supporting industries.However, in recent times, Malaysia’s containershipping rates have returned to near pre-crisislevels and the shortage of containers for exportand vessel capacity has been of concern.Ooi Lean Hin, Chairman of Shipping AssociationMalaysia (SAM) points out: “There is recovery in theshipping industry now, but we cannot automaticallyget everything back up as it was. It takes time. Thechallenge for exporters now is to find equipmentMalaysiaShipowner’sAssociation (MASA)CAPTAIN INTIAZ HUSSEINExecutive SecretaryMalaysia Shipowner’s Associationwww.malaysiashipowners.orgLIBERALISATION OFINCENTIVES AND TARIFFSIn 2009, the world economic downturn affectedall trade regardless of business sector andthe shipping industry was not spared as well.Captain Intiaz Hussein, Executive Secretaryof Malaysia Shipowner’s Association (MASA),explained that although the shipping demand hasimproved, some shipping companies have yet tofully recover from the impact of the economicdownturn and are still plagued by problems. CaptIntiaz elaborates: “These shipping companies arefinding it hard to keep ‘afloat’, and the biggestissues they face are of financial nature whichincludes cash-flow, loan repayments, decline inship value as well as low freight revenue.”Central RegionShipping Association(CRSA)TUAN HAJI ABU BAKAR BIN HUSSEINPresidentCentral Region Shipping Association(CRSA)GLOBAL STANDARDSFOR PORT KLANGBeing the top 10th most competitive nationin the world, it is only instinctive to say thatMalaysia is progressively improving andpositioning itself as a formidable tradingnation in the world map. Tuan Haji Abu BakarBin Hussein, President of Central RegionShipping Association (CRSA), feels proud andrelates how the shipping industry has alsoseen a positive uptrend in terms of volumein the first half of this year as compared toits correspondent period in 2009. Abu Bakarattributes this success to the perseverance ofthe ports and the initiatives taken to improveperformance and productivity.
PARTNERS 17Shipping associations are formed to promote and protect the interests of its members, and hence theirTherefore, it is only right that we speak to our associates, who are the ultimate end users of the port.and/or vessel space to ship their cargo. We shouldfocus on this issue, rather than harp on rates.Speaking about some of the past initiatives thatSAM has implemented to improve Malaysia’sshipping industry, Ooi explains: “In 1996, SAM(at that time known as ISOA) submitted a positionpaper to Ministry Of Transport (MOT) providingspecific recommendation on incentives andrates for transshipment traffic and a strategicgame plan. The plan was later adopted by PKAand the terminal operators and provided thebasic foundation for the growth of transshipmentbusiness at <strong>Port</strong> <strong>Klang</strong>.”Other activities were also carried out to develop<strong>Port</strong> <strong>Klang</strong> as Ooi further elaborates: “SAM togetherwith terminal operators, MOT and the carriercommunity also did a number of road shows inthe region to promote load-centering at <strong>Port</strong> <strong>Klang</strong>.Our members lobbied hard with their respectivePrincipals to promote <strong>Port</strong> <strong>Klang</strong> and also helpedto build the feeder connectivity. We are proud tosay that in 1996, transshipment volumes were onlyaround 20,000 TEUs per annum but had growntremendously to 4.3 million TEUs in 2009.”For the future development of <strong>Port</strong> <strong>Klang</strong>, Ooihopes all relevant parties involved in the shippingindustry can work together to improve feederconnectivity and resolve common operationalissues faced by the ports. Citing an example,Ooi continues: “The Inter-Terminal Transfer (ITT)between Northport and Westports should beaddressed. It is also to facilitate its members on mattersconcerning the shipping industry and tocontribute views and recommendations to therelevant Malaysian authorities Ministry of Trade & Industry, port authorities,customs Marine Department and other relevant Several strategies were initiated to improve theshipping industry, one of it being the need for anew and improved finance instrument while anincrease of Government-supported preferentialfunds can help finance fleet acquisition. CaptIntiaz adds: “We need to re-look at some of thefiscal incentives plus the rules and regulations,including the Merchant Shipping Ordinance(1952). We also need to reassess ship mortgagesand guarantees to further strengthen and developthe industry.”Currently, MASA and the Feeder OperatorsAssociation are in discussion with <strong>Port</strong> <strong>Klang</strong>Authority (PKA) to re-introduce the FeederIncentive Scheme. Capt Intiaz feels that by havingthis incentive, it will attract more transshipmentin <strong>Port</strong> <strong>Klang</strong>. He points out: “The source ofgrowth at <strong>Port</strong> <strong>Klang</strong> is expected to be fuelledby transshipment. When the scheme wasimplemented in the past, it had attracted a lotof investors and we strongly believe that it willfurther promote cargo in <strong>Port</strong> <strong>Klang</strong>.”Apart from the incentive proposal, Capt Intiazhopes that PKA will take the lead in modernisingthe tariff structure especially for empty containerships that return to <strong>Port</strong> <strong>Klang</strong>. <strong>Port</strong> <strong>Klang</strong> shouldintroduce benchmarked market-responsivecharges for both Westports and Northport. CaptIntiaz continues to say: “When both the portsare equally competitive in their rates, intra-portcompetition can be reduced and they can focusmore on productivity enhancement.” and to the shipping industry. As of April 2010,total membership stands at 226, with 103Ordinary members and 123 Associate members. promote the interests of Malaysian shipowners,assist in the development of the Malaysianmaritime industry as well as to collaboratein efforts towards continuous improvement ofmaritime standards. fleet tonnage Shipowners’ Association However, Abu Bakar insists that we shouldnot be complacent and should always striveto be better. He elaborates: “Shipping is aninternational business and Malaysia shouldbe seen as a globally-competitive country. Toachieve that, we should adopt the requirementsof the International Maritime Organisation(IMO) as a benchmark for port regulations. Infact as the 10th most competitive country, weshould be actively participating in coming upwith the regulations by providing our expertiseand knowledge in the international arena.”Apart from setting world standards, it is alsocrucial that Malaysia standardise the regulations,both in the international and regional forums,for example the Single Window initiative. AbuBakar points out: “Currently, we do havecertain international protocols, but it can beimproved upon as the flow of informationis not as smooth as it should be. <strong>Port</strong> <strong>Klang</strong>Authority’s (PKA) role as trade facilitator shouldbe to ease business procedures and this can beachieved with standardised documentation andprotocols between countries.”Abu Bakar applauds PKA’s initiative in theimplementation of the new free storageperiod and its ability to get the whole logisticschain to work together. Moving forward, AbuBakar hopes that PKA will be able to drive amore conducive business environment toenable formation of smart and collaborativepartnerships rather than competing with otherports. central region promote the common interests of themembers, and particularly to enter intomeaningful consultations, discussions,dialogues, communications and generally to establishments.
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