Festive frenzy: Staff of a fruit wholeseller checking a shipment of Mandarin oranges at their premises in Selayang Baru, Selangor. Shipping costs are expected to fluctuate ahead of the Chinese New Year season due to the impact of crowded port delivery schedules. — KAMARUL ARIFFIN/The Star
Freight rates expected to stay volatile due to logistics risks
PETALING JAYA: Supply chains are heading into a testing period, with freight forwarders warning that vessel bunching and port congestion could squeeze shipping capacity during key festive periods this year.
Federation of Malaysian Freight Forwarders president Datuk Tony Chia said as global fleets expand, this will likely raise the risk of volatile freight rates and tighter booking windows for importers.
Chia said congestion at major transshipment hubs such as Singapore, along with uneven vessel scheduling, is likely to constrain available slots around Chinese New Year and year-end holidays, particularly on major east–west trade routes, despite global fleet growth.
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“We expect freight rates to remain volatile going into early 2026. Market forecasts indicate mixed signals.
“On one hand, structural fleet growth suggests some downward pressure on base rates, especially if demand remains moderate. On the other hand, episodic congestion, schedule instability and carrier measures such as blank sailings continue to introduce short-term volatility,” he said when contacted.
To mitigate risks, Chia advised Fast-Moving Consumer Goods (FMCG) players and importers to book space earlier than usual, negotiate contracts with guaranteed allotments, diversify routes through alternative ports, build flexibility into delivery schedules and improve demand forecasting with logistics partners to reduce exposure to delays and sudden cost increases.
Small and Medium Enterprises Association Malaysia (Samenta) national president Datuk William Ng said SMEs are increasingly vulnerable to rising logistics risks as port congestion and higher shipping costs force businesses to secure cargo space much earlier than before.
He said companies that previously relied on a three-month booking window are now being pushed to lock in shipping slots five to six months ahead due to congestion at local ports and major transshipment hubs, as well as new environmental surcharges.
“Smaller importers often lack the financial capacity to plan that far ahead, exposing them to higher upfront costs, warehousing expenses and spoilage risks amid uncertain domestic demand.
“Our concern really is for small importers who may lack the resources to plan that far in advance,” he said when contacted.
“We must also understand that booking shipping slots earlier means higher upfront costs.
“Given the uncertainty of domestic demand, this means we will see higher warehousing and spoilage costs, which will translate to compressed margins for importers and higher costs for consumers,” he added.
Smaller importers are undoubtedly the most vulnerable to the current fragile shipping landscape, Ng said.
As a result, he said importers are rationalising festive product offerings, focusing only on high-volume items, with consumers likely to face higher prices and possible shortages if demand exceeds expectations.
Port Klang Authority chairman Ean Yong Hian Wah is confident of managing cargo surges during the convergence of major festive seasons this year, supported by ample capacity buffers and ongoing operational upgrades.
He said Port Klang is currently operating at about 70% to 80% of its annual capacity of 20.2mil TEUs (twenty-foot equivalent unit), providing flexibility to absorb peak volumes.
“The convergence of multiple festive seasons in 2026 is a recognised peak-stress scenario, and preparations are already underway,” he said when contacted.
He added that investments in yard optimisation, equipment upgrades and data-driven planning are strengthening effective capacity.
Ean Yong said the main operational risk next year is vessel bunching, potentially worsened by geopolitical developments affecting shipping routes, while weather and labour constraints remain manageable.
To ensure smoother flows for time-sensitive festive goods, he said terminal operators are enhancing berth and yard planning, prioritising critical cargo, deploying additional equipment and improving coordination with shipping lines, importers and logistics players to reduce dwell time and prevent congestion.
