National Ports Policy essential for growth, curb resources wastages

Malaysia needs a proper National Ports Policy (NPP) to promote the orderly growth and development of port capacity that is urgently needed and consistent with longterm demand growth.

This policy, experts said, would prevent wasteful competition and misallocation of resources.

Tan Hua Joo, a consultant at a shipping research company Linerlytica, said Malaysia has been mulling the formulation of the NPP since 2015, but it remains incomplete until now.

He said the lack of a proper port policy has resulted in the failure to develop additional capacity at Tanjung Pelepas, which has seen the fastest growth of any port in Malaysia in the last two decades.

“Instead, its expansion is now blocked by the development of the Forest City project. It is currently experiencing serious congestion due to having insufficient capacity to handle the increased demand.

“Meanwhile, resources were wasted in promoting projects that are not needed and have little growth potential, such as the Melaka Gateway and Carey Island projects,” he told The Malaysian Reserve (TMR).

Sharing the sentiment, Universiti Malaysia Terengganu’s Faculty of Maritime Studies senior lecturer Dr Jagan Jeevan said Malaysia’s seaport policy is still vague in the maritime system due to the domination of National Transport Policy (NTP), which severely dominates the functionalities of seaport policy in this country.

He said the NTP covers many perspectives, especially rail, road, aviation and maritime transportation. However, the nucleus of maritime logistics, which consists of ocean activities, seaports and hinterland, has remained unclear.

“If the NPP has been established, the structure of seaport operation will be changed by focusing on both markets, including ocean activities as well as inland markets. This will provide more prosperity to Malaysian seaports and contribute to regional economic development in secluded inland regions.

“By this, the economic growth in four main coasts — northern region, southern region, east coast region as well as west coast region — will equally developed. By implementing the NPP, the port operators and port authorities can perform under the same roof where all the system can be centralised and monitored easily,” he told TMR.

Are Malaysia’s ports still lagging?
Malaysian seaports have performed remarkably in global trade. However, it only refers to certain seaports such as Port Klang and Port of Tanjung Pelepas.

As Malaysia’s main port, Port Klang is experiencing the shortest average turnaround time for vessels among major global ports, about two days, while the global average is about one week, amid slowdown in supply chain, said chartered accountancy body ICAEW early this month.

Jeevan said in contrast, the remaining ports are still not equally developed compared to these two seaports. This is because of the lack of internal collaboration among the seaports and the inadequate competitiveness of the seaports, which are unable to attract additional clients from outside Malaysia due to their less strategic locations, limited facilities and services.

“Furthermore, the overdependence on a single mode of transportation for freight mobility also becomes the contributing factor for pushing the competitiveness of Malaysian seaports backward. On the other hand, assuming the inland ports as the competitor of seaports also becomes the main reason for this drawback.

“The inland ports possess many advantages such as operational flexibility, additional capacity, ability to expand seaport lifespan as well as contributing to the non-financial investment policy, whereby the infrastructure, space and locational advantages can be utilised by seaports,” he added.

The limitations faced by seaports are competition from neighbouring regions, especially from Thailand and Singapore, due to the limitation of service options compared to these seaports.

Jeevan said this issue can be overcome by rejuvenating the Barter Trade System in Malaysian seaports.

“Secondly is the imbalance in multimodal freight transportation. The proportion of road freight is dominated by rail freight by 99:1 and this will produce a significant issue in seaport operation.

“Hence, the emergence of the East Coast Rail Link connecting the east and west coasts will be a great relief to seaport operations and they can utilise both transport modes for effective freight movement within the country or beyond the regions,” he explained.

Jeevan said thirdly, the remaining inland ports or dry ports in Malaysia are still underutilised and treated as competitors to the seaports.

“This concept needs to be changed and these entities need to be treated as complementary entities for seaports and utilise them for improving the seaports’ competitiveness and transforming logistics functions of seaports towards geologistics concept.

“Finally, several freight corridors in Malaysian remain underutilised and not used for trade purposes. In that case, investment policy via public-private partnership needs to be enforced to ensure the investment policy in the seaport sector can be executed efficiently,” he concluded.
Source: The Malaysian Reserve