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In the light of the recent defensive action by Singapore to slash its port charges to stay competitive, the move by Port Klang Authority to seek a review of charges for marine service at Port Klang has evoked strong criticism from shipping lines which say the port would be ill-advised to proceed with the increase.
Malaysian shipowners and agents of foreign shipping lines calling Port Klang, which claim lines are talking about survival, are now huddled in discussion to jointly oppose the rate review and revision proposed by the port authority.
It is understood that the International Shipowners Association (ISOA), which represents foreign shipping lines calling Malaysian ports, and Malaysian Shipowners Association (MASA) have met with a view to taking a common stand in resisting the proposed increase in port charges.
Urging PKA to be more sensitive to the needs of the trade, shipping lines cautioned that any increase in port charges would not be in the interest of the port which now has to focus its resources in thwarting attempts by Singapore to lure traffic away from Malaysian ports.
"It would be counter-productive. The recent decision by Singapore to offer rebates worth about S$300 million, including a 50 per cent reduction in transshipment handling charges for empty containers, has been well received by the shipping lines," a representative of a major shipping line serving Europe-Asia trade from Port Klang said.
The source said while there would never a good time to raise charges, PKA should take a serious look at the current performance of shipping lines before considering a rate revision.
Most liner companies have reported huge losses and in the Transpacific trade alone lines are expected to suffer about US$1.2 billion losses.
Last week NOL reported losses about S$300 million while P&O Nedlloyd reported losses of about US$50 million for the first quarter.
In the wake of declining freight rates and surplus capacity, shipping lines are now initiating capacity reduction programme which could witness at least one major alliance omitting Port Klang in one of its direct service strings.
PKA, which has removed the 50 per cent rebate on the handling of all transshipment containers earlier this year, has proposed to increase the tariff by a further 50- 125 per cent for the handling of dangerous cargo containers.
In addition, citing increase in operational and new investment costs, PKA has proposed to review charges affecting berthing of vessels, pilotage and towage and introduce a consolidated charge (for pilotage, towage and berthing), up to 39 per cent increase.
A container ship measuring 200 metres and with 25,000 gross registered tones would be required to pay RM9,600 under the proposed integrated charge as compared with RM5,853 it is required to pay at present.
It is understood that ISOA and MASA will present a joint memorandum to PKA to desist from introducing new rates that may cause irreparable harm to its status as an emerging regional transshipment hub.
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