Friday, March 6, 2009

Shipowner: "Scrap cabotage policy? No, no, no.."

Guong
Kota Kinabalu: The Malaysia Shipowners Association (Masa) said it will resist any attempts to remove the cabotage policy, claiming that scrapping it could cause huge collateral damage to the Malaysian shipping industry and undermine national interests. DE
Huge collateral damage? Wow, I didn't know that the trade route between the peninsula and Sabah & Sarawak have such impact. What about other domestic trade route? It means they are making huge sum of money with this route to the extent they are willing to resist any attempts to scrap this policy. What about Sabahan and Sarawakian then? Let us keep on suffering just so they can keep doing business?

Masa Chairman Nordin Mat Yusoff said if high shipping cost was the only reason, one could assume that when shipping cost declines, the prices of goods would likewise drop.

"But this has not been the case; total ocean freight rates declined by about 41 per cent in the last six months in Peninsular Malaysia-Sabah/Sarawak trade but this has not been reflected in the landed prices of consumer goods," he said in a statement.DE

Really? But it was just six month ago, one can't expect to feel immediate effect on the declined rate. It would take more than a year since the shipped goods would still be in the local market. No businessman would be stupid enough to drop their price of goods since most of the old stocks (which were shipped before the now declined rate) were probably not yet sold out.
However, Nordin said it is evident that the high prices of consumer goods have not been elastic and the cause for this must be investigated scientifically by relevant government agencies in the State, including the Domestic Trade Ministry and Mida. DE
Investigation again? How long will it take? Sabahan and Sarawakian have waited long enough. Even the Queen Elizabeth Hospital issue is still yet to be solve, let alone this huge issue involving all of West Malaysian.
He also said it was extremely misleading, and indeed callous, for anyone to suggest that shipping charges from Kota Kinabalu to Southampton as being twice that of similar charges from Port Klang to Southampton because of the cabotage policy.DE
Who said the price was being twice? But it's a fact that the price will be higher than what it was supposed to be since they ship it twice.
"In fact the argument against the cabotage policy cannot be more wrong because cabotage does not prevent any ship from calling between Kota Kinabalu and Southampton much as it does not between Port Klang and Southampton," he said. DE
Yes, but that applies only to Malaysian vessels that ship imported goods. Ships from Southampton (or any other part of the world) are permitted to sail to Sabah and Sarawak but not cargo ships. And how many Malaysian-flag ships that dock in Sabah and Sarawak are actually making a direct shipping route outside Malaysia? I can only think of MISC.
Alluding the furore to "barking up the wrong tree", he explained the removal or relaxation of the cabotage policy would in no way change this position because the question of shipping lines serving between KK and a foreign port would be influenced by, among other factors, volume of cargo, remoteness (geographical) of the market and port infrastructure and performance. DE
Yes, but the problem is, all the factors that influencing the price are done twice due to this policy. Why not shorten it into just once?
Urging the manufacturers and producers not to confuse the central issue, he said Masa was willing to sit down with relevant government agencies as well as manufacturers and producers in Sabah and Sarawak to help jointly identify and examine related costs in the transportation pipeline together with other players in the link. DE
Feeling the heat are we.. You guys better do it quickly and come out with an acceptable solution. If not, this cabotage policy between peninsula and Sabah & Sarawak must be scrap.

4 comments:

Anonymous said...

Bro,

A comment on the cabotage issue.

1. The cabotage policy only apply to the shipping industry which to avoid any foreing vessel or ships operates in Malaysia waters but did not restricted to any foreign cargo vessel/ ships to call any port in Malaysia including Sabah and Sawrawak.

2. With Cabotage policy, our domestic shipping has growth. If 20 years ago we have only one Malaysia shipping company (MISC Berhad), now we have more than 40 shipping company (bulk,oil tankers, container and OSV).

3. There is a local shipping company from Sabah & Sarawak operates in coastal waters of Malaysia to Sabah and Sarrawak owns container vessel.

4. Shipping freight rates only covers for 46% from the total of Logistics cost, other cost which is balance of 54% comes from Tranportation Company, Forwarding Company, Shipping Agency, Port operator and any third party logistics company who handle the cargo.

5. If Shipping company are offred the freigh rates at RM850 from P.Klang to KK, the third party will increase the freight rates at least 10% to 20%. Imagine if there is 3 or 4 third party involve just to move 1 unit 20ft container from P.Klang to KK sot the freight rates from RM850 will possible become RM1700.

6. Did we ever think about the trader..??. What is their profit margin..???

7. If we abolish the cabotage policy, then the foreign shipping company will bring their vessel to operate in Malaysia waters carrying cargo, oils from port to port, what happen to our economy..??...Cash flow to foreign country...The basic example here is uncontroll foreign workers in Malaysia...What happen to our local employment..???

8. Cabotage policy does not permitted any foreign vessel from international port to call at Malaysia port (eg: Hong Kong to KK or Sandakan, Southampton to KK or Kuching). Port Klang only has been appointed as a Malaysia Hub or Transhipment port to distribute the cargo to any dedicated port. Any vessel can call direct to any port in Malaysia.

8. Shipping line are avoiding KK or Kuching port due to the geographical, effeciency,cargo for export and other factors. Basic example is Taxi. If a taxi would carry one passenger from KK to Kimanis. And no passenger will ride the taxi from Kinamis to KK, what is the charge if you would like to ride from KK to Kimanis..??

8. Singapore shipping company are struggling and surviving due to abolish of cabotage. Foreing company and vessel are flooding their waters

9. Malaysia Goverment are trying to solve the issue on how people are mis interpriate the cabotage.

10. Our politician are fighting each other for the position without looking foward to the economic issue in Sabah and Sarawak. Hate to see and talk about politic in Malaysia.

Thank you...
Concerned citizen

guong said...

We only asked the route between peninsula-Sabah & Sarawak to be exempt from this policy not abolish it entirely.

Who are these third & fourth party that caused the rate to increase?

KK or Kuching port are avoided but it's because this policy caused these port to be underdevelopment. All the big players are not from Sabah/Sarawak. Using the KK-Kimanis taxi as example. Why would anyone go to Kimanis if all of their need are available in KK?

This is not about politic. It's a fact that Sabah/Sarawak are paying more because everything is done twice.

Anonymous said...

Actually goverment never restricted any foreign vessel to call at any port in Malaysia. They are free to call KK, Tawau, Sandakan to deliver the cargo/container/goods direct from international port our foreign country. But they hesitate due to some reson maybe geographyical, long waiting to container laden/full for export. Just to study all the fact.

They only implement Port Klang as a Hub port, that means all cargo coming to Port Klang will be tranship to other port in Malaysia thru local shipping lines which is 1. Johan Shipping, Shing Yang Shipping- Sarawak company
2. Chung Yi Shipping - Sabah
3 And any other local players

Third party...namely freigh forwarder, haulier company, trader, they are not doing business for free. Every freight rates from shipping line they gor/received must be increase by certain precentage for their profit or revenue.

guong said...

Like I said, Sabahan and Sarawakian are the one suffering. I stated it clearly in my post, If they have a solution, do it quickly. If not, just scrap this policy.