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While
remaining hopeful that the shipping
markets will recover quickly, the
chairman of Malaysia Shipowners’
Association, Dato Hj Mohd Ali Yasin
said any optimism must take into
account the performance of the world
two largest economies – the United
States and Japan.
Ali,
who is also the managing director of
Malaysia Shipping Corporation Bhd
said given the current scenario with
still no clear and positive signs of
a firm growth in US and Japan the
future remains a little uncertain.
He
said the performance of the liner
market had been considerably eroded
over the past year or two and
despite discussion among shipping
alliances and shipping lines to
restore rates “very little has
been achieved outside the discussion
rooms.”
“All
sectors of shipping experienced the
impact of the slow-down, though in
varying degrees, the severest being
the liner sector.
The
relatively reduced demand was
aggravated by emergence of excess
capacities, declining freight rates,
increasing operational costs,
including bunkers, insurance and
management.
“Shipping
lines took a wide range of defensive
and pre-emptive measures, including
voluntarily withdrawing capacity,
scrapping tonnage and ceasing
specific services to address the
imbalances in the marketplace, said
Ali, at the MASA’s annual general
meeting in Shah Alam on Saturday.
The
chairman of MASA noted that the
liner trade remains over supplied
with 25 per cent tonnage more than
what the market needed.
While
there are some positive signs in the
chemical trade, Ali said the tanker
market had not been doing well as
expected.
Ali
also said in the light of increased
security concerns brought about by
recent events, the shipping industry
was expected to come under greater
scrutiny on matters relating to
safety and security.
“Initiatives
are underway to enforce specific
measures to enhance ship security,
some of which are expected to be
discussed at IMO meetings in May and
December 2002,” he said.
“While,
as responsible shipowners, we
welcome any measures that serve to
enhance ship security, we would also
like to caution against the
introduction of raft of measures
that would burden us financially and
operationally further,” he said.
“We
need not remind ourselves that the
industry has been compelled to adopt
and comply with a number of new
rules and standards in recent years,
including the ISM Code which enters
in mandatory Phase 2 in July and the
STCW ’95 (which becomes mandatory
in August 2002),” he added.
The
chairman was encouraged by the
status accorded to the Association
by private sector agencies which
have sought its views and opinions
from time to time.
“During
the year in review, we raised, as we
had in the previous meetings, a
number of industry-related issues
with the Ministry of Finance and
Ministry of International Trade and
Industry,” he said.
“Notable
among these was the dialogue with
the Ministry of International Trade
and Industry in April at which we
raised the contentious issue
relating to the restriction on
directorship by the Securities
Commission. We reiterated our
position that the limitation should
be removed or reviewed with a view
to ensuring that the industry
practice of “one ship, one
company” could be pursued without
creating undue problems to shipping
lines,” Ali said.
The
86-member Association also held a
dialogue with the Marine Department
and the Department of Environment on
the issue of acceptance of P&I
Club Letter of Undertaking in
incidents involving carrier’s
liabilities under the Environmental
Quality Act 1974.
On
the issue of the Malaysia Shipping
Fund, Ali said the disbursement of
shipping funds by Bank Industri
& Teknologi Bhd must meet the
primary objective of fulfilling
national objective.
“We
have impressed on the to lower the
lending rate by 1 per cent for
vessels to be built at local yards;
extending the age for second hand
vessels to 20 years at the end of
the repayment period and the need to
look at the guidelines for loans to
small yards,” he said.
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