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The demand for domestic liner
shipping industry serving the trade between
Sabah/Sarawak and Peninsular Malaysia is
expected to continue to expand because of
maturing of the container markets fostered by
greater industrialization of manufacturing
industries which display stronger propensity
towards containerization.
Making this observation, in an independent
market research report, PortsWorld notes that
the domestic trade between the two geographical
entities within Malaysia has been expanding,
both in size and in scope over the years.
“Aside from the expanding volume of trade
between Peninsular Malaysia and Sabah and
Sarawak, comprising both containerized and
non-containerized cargoes, there has also been
an increase in the trade between ports in Sabah
and Sarawak,” the study notes.
“Thus, not only is greater volume of cargoes
expected to be generated but also more new
cargoes will be containerized that require
transportation between ports,” the report
contained in the prospectus issued by Swee Joo
Bhd which is seeking listing is seeking listing
of its shares on the Main Board of Bursa
Malaysia said.
“One major new source of cargo that is expected
to be generated that will be the increase in the
demand for domestic shipping services from the
expansion of palm oil industry in Sabah and
Sarawak during the Ninth Malaysia Plan
(2006-2010), particularly in the form of coastal
movement of crude palm oil to local refineries
in Sabah, Sarawak, as well as to Pasir Gudang in
Peninsular Malaysia,” the market study said.
The demand for shipping services has also
increased on account of the increasing cargo
volumes generated by industries in Sabah/Sarawak
seeking global markets.
In more specific terms, it noted that improving
infrastructure, including better port handling
facilities, development of inland or interior
cargo terminals, road haulage services and
better road accessibility there has been a
deeper market outreach in containerization in
Sabah and Sarawak. More cargoes are being
containerized deeper inland than before.
“In addition, more and more commodities are
becoming “containerized”. Such cargoes include
sawn timber, plywood, veneer, would mouldings
and others that were previously “palletized” but
are now better suited for containerization.
There is generally a greater rate, or propensity
for containerization of the cargo base in Sabah
and Sarawak than in Peninsular Malaysia boosting
the prospects for container shipping in the
trade,” the report added.
The maturing and deeper penetration of
containerization has also increased the
“backhaul” volume of cargo for shipping lines.
According to the report, overall average vessel
utilization has also increased from about 40 per
cent in 2000 to about 65 per cent in 2005.
The report also disclosed that a study has been
commissioned by the Ministry of Transport in
April 2006 to pave the way for the designation
of a port in Sabah or Sarawak as Regional Load
Centre including serving the trade in the
Brunei-Indonesia-Malaysia-Philippines East Asia
Growth Area (BIMP-EAGA) would boost the
development of shipping in the region.
“Domestic shipping lines would be able to
benefit from such a development as it would
widen the geographical outreach of ports served
by the operators,” it said.
Shipping companies will also benefit from the
improving transport infrastructure facilities
and greater accessibility or outreach is also
expected to boost the development of the
domestic shipping sector.
It noted that the demand for shipping would also
increase from the establishment of more inland
or interior cargo terminals and transborder
cargo centres in Sabah and Sarawak that could
strengthen and expanding the cargo base.
Performance and productivity of ships in the
domestic trade would also benefit from
improvement to port cargo handling facilities,
especially in Sabah where, since the
privatization of eight ports in the state to
Sabah Port Sdn Bhd which has allocated RM200
million to reduce congestion and waiting time of
ships by acquiring more and modern equipment and
related facilities.
The PortsWorld research report also said in
Sarawak, the Sarawak Ports Competitiveness
Committee, under the Ministry of Transport, is
closely monitoring the productivity and
efficiency of the ports in the state. Greater
efficiency of ports will benefit shipping lines
by improving ship turnaround time and expedite
the cargo flow. |
