Growing Port Klang for years to come

KUALA LUMPUR: It was in early April 2020 that Datuk Chong Sin Woon was given a hint by his MCA president, Datuk Seri Dr Wee Ka Siong, that he had been nominated for a certain government-linked position.

About two weeks later, the official announcement came, with Chong named as the new Port Klang Authority (PKA) chairman for a two-year term period, effective April 18.

“As a body that regulates the main port in Malaysia, PKA is confident that this appointment will support the role and function of the board in managing and developing the port in a sustainable way, and thus drive the country’s economic growth, ” it said in a statement to herald Chong’s appointment.

Chong, (pic below) who is the MCA secretary-general, did not have the usual welcoming ceremony as Malaysia was battling Covid-19 furiously, with the country put under the first movement control order (MCO) on March 18, a month before his appointment.

“Due to the MCO, I only went to (PKA) office about June, and by July, things were back to full force, ” said Chong in a recent interview that coincided with him being on the job for exactly a year.

The former deputy Education Minister’s job is a huge one.

For one, while Port Klang is Malaysia’s largest and busiest port, it faces tough competition from regional players, each keen to develop themselves as a regional distribution hub.

Just for perspective, Port Klang is Malaysia’s largest port that handles almost 50% of the country’s trade.

Last year, it handled 13.5 million twenty-foot equivalent units (TEUs) in container volume, which puts it at the 12th spot among the world’s main container ports, according to the rankings released by the World Shipping Council. Eleventh placed Dubai handled slightly more container traffic than Port Klang, coming in at 14.1 million TEUs.

While PKA is not about chasing numbers purely for the sake of it, Chong said that joining the league of the top ten is possible within the decade, provided all stakeholders do their part to make Port Klang an efficient port.

Selling Port Klang to the world

Chong discovered that being chairman means he is also the de facto “salesman” for Port Klang, and his job has been made difficult by the pandemic.

Currently, Port Klang has trade connections with over 120 countries, and dealings with more than 500 ports. However, the job of marketing Port Klang never ends as each country wants to jostle for a larger share of the pie, and as such, the port needs to stay current with the latest developments, and forge the most strategic alliance with shipping operators and other ports.

There are about 400 liner services in operation today, most providing weekly departures from the respective ports that each service calls, with shipping moving about 60% of goods (by value) traded internationally each year.

Bustling: Gantry cranes at Northport in Port Klang. Malaysia will follow a standardised protocol nationwide to make it easier for people to comply with social-distancing procedures as the nation bolsters efforts to stem a new wave of Covid infections. — BloombergBustling: Gantry cranes at Northport in Port Klang. Malaysia will follow a standardised protocol nationwide to make it easier for people to comply with social-distancing procedures as the nation bolsters efforts to stem a new wave of Covid infections. — Bloomberg

“As PKA chairman, I am supposed to visit a lot of ports, and to get ships to call on our port, as well as to get investments. One year of being under the MCO has resulted in not much being done on this front, as far as interactions with international players is concerned.

“Everything has to stop, and all the Zoom meetings doesn’t really help. For example, while there is a port alliance between Malaysia and China, we were unable to have a (physical) meeting, but it is also because everyone was also busy handling their own problems, ” he said.

At the home front, Chong also had to step in when PKA had to mediate over an issue involving the management of container deposits, with a decision arrived in last July to allow business to carry on between container owners, hauliers, forwarding agents, and various trade organisations.

“That was among the first challenges for me, and following a series of discussions, came an insurance system to replace the deposit system. By and large, the board does not get involved in daily operations matters, as there is a general manager to take care of these things. Still, it’s very challenging and also very exciting, ” he said.

“With jobs like this, there is no time for orientation, and one need to pick things up fast. Of course, some can be very technical, and require specialist knowledge. Now, we know how connected the world is, with so many businesses being interconnected, and ports play an essential role in all these, ” he said.

Chong agrees that most Malaysians are largely unaware of the importance of ports in their daily lives, except when there are supply disruptions.

“For example, it was only when the port congestion at the end of 2020 and up to this Chinese New Year – when their fruit (imports) are stuck in the port, that people became aware of the role of ports. Majority of stuck containers (60%) were related to transshipment, while the rest were import/export containers.

“Before I took over, many felt that ports are relevant only for businessmen and logistics companies, when it actually affects all of us. The pandemic and the ensuing MCO have led us to see how important ports are to the country. They are a lifeline. Just look at Singapore, where the port drives the pulse of their economy, along with their airport. Singapore is currently building a mega container port at Tuas to be future-ready, ” said Chong, who added Malaysia cannot afford to sit still while its neighbours up their game.

The future of Port Klang and southern Klang Valley

He said with the advent of 5G and artificial intelligence, Malaysian ports have no choice but to consider turning themselves into smart ports that will lead to less reliance on manpower through increased automation, increased efficiency, and greater accuracy in operations, in all weather, day or night.

“Smart automation can take over some of the more dangerous tasks, and some of the largest ports in the world are turning into smart ports. It has been shown that unmanned ports has potential to reduce up manpower requirements by up to 70%, ” said Chong, who revealed that the detailed feasibility study for the third port (after Northport and Westport) at nearby Pulau Carey has recently been completed, and is being reviewed by the PKA board before it is forwarded to the Transport Ministry, which will then submit its recommendations to the Cabinet.

Crucial mode: A truck travels past stacked containers at Northport in Port Klang.Crucial mode: A truck travels past stacked containers at Northport in Port Klang.

“As the third port, Pulau Carey can handle 30 million TEUs a year, which surpass the combined volume of Northport and Westport. And with the expansion of Westport, the combined volume can easily exceed 45mil TEUs a year. This additional capacity will enable us to push our industrial development. The Pulau Carey port will definitely be a smart port from the ground up. As for Northport and Westport, we

hope they will upgrade their systems and infrastructure to follow suit.

“Prior to this, PKA had been approached by many companies offering their solutions, but back then, the tech was quite there yet, and many things were unproven. Now, the software evolution has reached the 4.0 stage, while offering lower cost, and the efficiency is there. I recently raised this at the board meeting, that we should slowly and surely bring our port in this direction.


“At first, they were also eyeing some form of semi-automated systems (for the Westport expansion) due to cost issues, But we are talking about the long term, and having to do upgrades years later down the road may also be costly and disruptive as well. Sure, I would like to turn Port Klang into a more efficient port so that it can compete globally. But before that, everyone must up their game, not just the operator, but all industrial players and government agencies such as Customs and the Malaysian Quarantine and Inspection Services (Maqis).

Profiting from the surge in e-commerce

Concurrent with the expansion of West Port is the effort to unlock more value from the Port Klang Free Zone (PKFZ), and the surge in e-commerce is a driving factor.

Pointing out that Malaysia ranked seventh to eight in the world for online purchases last year, Chong said there is potential to turn PKFZ into an attractive e-commerce fulfillment centre.

“An important contributor to our cargo volume is e-commerce. Last time, people buy only small items, but now they buy full furniture sets. We are looking at creating some form of green or fast lane for e-commerce products for our ports. We are in discussion with some IT companies to set up a system to expedite the movement of such goods, and to get the cooperation from Customs as currently, our sea ports don’t enjoy e-commerce tax free privileges (unlike some airports), ” he said.

With the system in place, a freight forwarder or consignee can easily declare their consignment, thus making PKFZ as a hub for product fulfillment.

“This will encourage more companies to come in and make Port Klang a regional distribution hub for South-East Asia, and fully unlock the potential of PKFZ. For example, Ikea has pkfz. Ikea built a warehouse at Port Klang, and we envision that if we are more friendly to e-commerce, more players will come in.

“When things are in place in PKFZ, we can then invite all the e-commerce giants to set up

warehouses here for easier distribution of their products. Compared to Singapore, we are still reasonable in cost, and we just need to beef up efficiencies for e-commerce and things like having smart ports.

Port Klang already enjoys a geographical advantage when it comes to the Far East to Europe trade route, being the first port of call for ships on the eastbound leg, and the last port of call on the westbound leg.

“The board should set policy to bring Port Klang to the next level, and to learn from Shanghai and Singapore. We have to create more alliances with shipping lines. With PKFZ fully rented out, the Transport Minister said we should explore new land for another PKFZ kind of model to cater to future demand, ” said Chong, who added that equipment wise, Port Klang is toe-to-toe with other major ports.

“Recently, we received largest LNG vessel in the world from France, which too seven to eight cranes to serve, during its maiden call to Port Klang. We can take the largest container ships in the world, with the 18m (harbour) depth good enough for the largest ships, ” said Chong.

In the recent 2020 report card for PKA, he added that Malaysia is expected to carry on its journey towards economic recovery this year.

“This unprecedented pandemic situation is being controlled by government SOPs, coupled with the launch of Covid-19 vaccination. Together with continued export movements and increased momentum in consumption and investment, Port Klang is expected to handle 13.5 million TEUs this year, or see a potential increase of 2.3% in container handling.

“Strong demand from factories in China after resumed operations caused the volume of container handling to soar again. We are confident we can bounce back, and we are just one to two million TEUs away to reach the 11th position on the container port ladder.”

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