Malaysia: Port Klang business hit as key firms shift operations to Singapore – 11 Sep 2017

  • Business at Malaysia’s main shipping hub in Port Klang has taken a hit in 2017 as major shipping companies shift their operations to Singapore under new alliance agreements, industry officials say.
  • Many of these are partnerships with Beijing, yet the Ocean Alliance – which includes state-owned China Cosco Shipping, the world’s fourth-largest player – made a huge shift from Klang to PSA Singapore’s terminal in Apr 17. This has added to concerns in the industry over China’s commitment to supporting the logistics industry in Malaysia.
  • “Only Kuantan Port has Chinese equity so far because it also aids Beijing’s South China Sea claims. Other infrastructure plans have either not taken off or are only loans, or worse, just Chinese companies winning construction deals,” former Port Klang Authority chairman Lee Hwa Beng told The Straits Times.
  • Data compiled from Northport and Westports, the two operators in Klang, showed that after nearly four years of increasing loads, cargo throughput was down a sharp 8.4% in 2Q17 to 3 million twenty-foot equivalent units (TEU). This followed a flat 1Q17 growth of 0.9%.
  • Westports, which controls three- quarters of Klang’s total capacity, “is now conservatively guiding 2017 volume may decline 7-12%”, and 2018’s prospects remain “murky”, according to UOB-Kay Hian’s analyst Kong Ho Meng.
  • The new alliance agreements’ biggest impact on Klang was the loss of transshipment volumes – goods stored before being shipped to their final destination – from giants United Arab Shipping Company (UASC) and France’s CMA CGM. This could total up to 2 million TEU annually.
  • CMA CGM and Cosco have naturally gravitated to Singapore as both have major investments there. PSA saw a 9.6% jump in 2Q17 to 8.5 million TEU. Among the world’s top 20 ports, Klang was one of only two, the other being Tanjung Pelepas on the south coast of Johor, to see a drop in volume in 1H17.

External Link : http://www.straitstimes.com/asia/se-asia/port-klang-business-hit-as-key-firms-shift-operations

11-Sep-2017


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