With failure of at least four Malaysian-owned coastal shipping operators serving the trade between ports in Peninsular Malaysia and Sabah and Sarawak in recent years, The Malaysian Shipowners’ Association has warned against any adventures by the government to set up a new shipping line to serve the coastal trade.

Responding to recent report by the Minister of International Trade and Industry Datuk Paduka Rafidah Aziz and her Deputy Datuk Kerk Chew Ting in Kuching that MITI had proposed to the government to consider introducing "a special shipping line" to bring down freight charges between Peninsular Malaysia and Sarawak and Sabah, MASA said high operating costs combined with falling freight rates due to intense competition have caused several domestic operators to cease their operations. 

MASA said Apollo Shipping, Triumph Line, Harvest Venture and Perkapalan Kris are among the casualties. 

“Those remaining are still committed to serve the trade with frequent sailings and sufficient capacity and coverage despite suffering big losses,” the Association noted.

MASA said the present high cost operation of the container service between Peninsular Malaysia and East Malaysia was compounded by inadequate port facilities and services in East Malaysia resulting in low productivity, frequent berth congestion and extended port stay. 

The 60-member Association said refuting claims that the freights were high pointed out that the freight rates had in fact declined by as much as 57 per cent in recent years, largely as a result of excess capacity in the trade.

Currently, the total carrying capacity provided by the nine domestic shipping operators amounts to about 247,666 twenty-foot equivalent units or TEUs of containerised cargoes a year.  This is more than double the estimated cargo volume shipped from Peninsular Malaysia to Sabah, Sarawak and Labuan of around 110,000 TEUs a year.