THE STAR, Monday, January 13, 2003 - THE eight major ports in the country have pledged to enhance co-operation to take on the challenges posed by neighbouring and regional terminals this year.

Members of the Federation of Malaysian Port Operating Companies (FMPOC) have agreed to take the necessary steps to capture a bigger portion of the transhipment market as well as maintain profitability and remain supply-driven.

FMPOC president Tan Sri G. Gnanalingam said local port operators had decided to work together to address all challenges to ensure Malaysia remains a competitive nation given the excellent infrastructure built by the government.

He said that key players in the industry were facing a new phenomenon.

“The freight rates out of Malaysia are very low and shipping lines are generally having a crisis with many of them making huge losses. Of greater significance is that freight rates or yields are higher in other Asean ports which naturally tend to get a greater allocation of slots on their ships left unchecked.

“This will lead to roll-over of cargo to the next vessel, increase in inventory levels and difficulty in meeting just-in-time practices.

“The hauliers on the other hand are price cutting in view of increased competition. This will lead to the survival of the most efficient and cost-effective companies among the 60 odd haulage companies.

“The ports on the other hand need sufficient cash flow to build additional capacity and to remain supply driven. A RM1mil TEU terminal costs at least RM700mil in terms of infrastructure, equipment and systems.”

In a dialogue session last week that was also attended by Transport Minister Datuk Seri Dr Ling Liong Sik and ministry officials, the private ports also agreed to seek methods to standardise and simplify the various charges for the benefit of the various port users.

The government further encouraged FMPOC to set up a 'Malaysian Portnet', which will be an Internet-based documentation facility that provides complete services, from the source of manufacturers to cargo destination.

This will be an umbrella system to be used by all the port operators instead of each one developing the freight modules.

FMPOC comprises Northport, Westport, Penang Port, Johor Port, Bintulu Port, Kuantan Port, Lumut Maritime Terminal and Port of Tanjung Pelepas.

At a dinner following the dialogue, Dr Ling said in a speech that Malaysian ports required investment of a further RM4bil to increase capacity and to have sufficiently trained staff to cater for the additional volume. The local ports had grown from handling 1% of world trade to 3%.

“Soon there will be 300 million boxes in the world and we must strive to achieve at least 4% if not 5% of this volume, which is 15 million boxes. To achieve this, we need to invest RM4bil more to increase our terminal capacity and ensure we have trained staff to move the additional volume,” he said.

Ling said the government was fully aware of the financial situation and needs of the members of the logistics chain.

He congratulated the ports on achieving 350% increase in volumes since 1995, growing from 2.5 million to 9 million TEUs. This represented a 50% increase per annum.

He added that the challenges of the last five years would differ for the next five where port operators had to look at issues such as increased capacity, improved productivity, the need for greater computerisation and the greater initiative for container security.