KUALA LUMPUR: The country’s new national shipping policy must not only encourage the development of a robust domestic fleet to reduce dependency on foreign vessels, but also provide more funding to modernise and accelerate the transition to green shipping.
Industry players said, among other things, the policy should prepare Malaysian shippers to navigate the shifting dynamics of global trade and a volatile environment due to unforeseen circumstances such as regional conflicts.
They also hope that the new policy, which is expected to be presented to the Cabinet by year-end, will focus on increasing domestic tonnage and reducing reliance on foreign vessels.
On July 4, Transport Minister Anthony Loke announced that a national shipping policy would be introduced to guide the local shipping sector in exports and imports and create new job opportunities.
This was a timely announcement, as the Malaysian Shipping Masterplan (MSMP) 2017-2022 was launched five years ago and is due for a review, as the industry is still falling short of its targets.
Given its strategic location in the busy Straits of Malacca and part of the South China Sea waterways, Malaysia has long aspired to become a major maritime hub in South-East Asia.
However, it relies heavily on foreign tonnage, leading to a transport services deficit of RM7.80bil in the first quarter of 2024.
Against such a backdrop, the Malaysia Shipping Association chairman Ooi Lean Hin emphasised that the nation must strategise and boost domestic shipping in the revised policy, which, he said, is the proper thing to do as Malaysia relies heavily on foreign vessels for maritime trade.
He cited the Red Sea crisis – where Yemen’s Houthis attacked mainly Israeli-linked vessels – as a good example of how escalating geopolitical tensions affect Malaysian shipping, as it led to a surge in shipping demand and prices.
For context, about 15% of the world’s shipping traffic, including 30% of the global container trade, passes through the Suez Canal to and from the Red Sea.
Given these challenges, Ooi called on the government to play a pivotal role by outlining clear policies that encourage and incentivise exporters and importers to give preference to Malaysian tonnage for shipping their goods.
The government should remove barriers for ship owners to secure offshore financing. This would enable owners to tap financing options offshore since local banks generally shy away from vessel financing. — Bernama
