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Malaysia’s shipping industry has seen a slight
recovery in volumes and freight rates in trade
routes from Asia to Europe and the United States
as the peak season approaches in the next two
months.
“There has been a slight increase in volume but
it is still weak. And the current freight rates
have improved by 15% to 20% from their slump in
January,” Wilhelmsen Ships Service Malaysia
managing director Winston Loo told StarBiz.
“The current improvement in freight rates is
still considered below healthy levels but it
certainly helps mitigate, to a certain extent,
rising fuel costs,” he said.
Loo said most shipping lines had also
implemented a rate-restoration exercise.
The exercise aims to counterbalance the books of
shippers due to the high operating costs
incurred after the drastic fall in volumes and
ocean freight rates since the beginning of the
global economic crisis.
Loo said that the end of July was a curtain
raiser for the usual traditional peak shipping
period in August and September due to
preparations for the festive season by year’s
end.
United Arab Shipping Co Malaysia Sdn Bhd (UASC)
country general manager Desmond Yong said the
rate-restoration exercise was implemented
because the previous rates charged, especially
in the first quarter, were “beyond survival”.
“The rates then were about 50% less on a
year-on-year basis,” he noted, adding that the
current freight rates for a container from
Malaysia to Europe for UASC were averagely up by
about US$300.
Yong said the current container shipping
capacity was quite tight due to the rise in
exports from China to Europe and the United
States.
“Malaysia, too, is currently recording a
year-on-year increase in exports to these two
markets,” he said.
Trans-Asia Shipping Corp Bhd (Tasco) head of
non-vessel operating common carrier, K.H. Lim,
said the overall export volumes to both the
United States and Europe had picked up as the
July–September peak season approached.
“This is the time when major importers start
buying all those back-to-school merchandise,
summer holiday stuff, followed by Christmas
sales goods.
“However, the current numbers are still way
behind compared with a few years ago when the US
economy was still unaffected,” he said.
He added that December and January were always
the slowest months as most of the merchandise
had already reached the retail outlets.
Usually, according to Lim, shipping lines will
impose peak season surcharges from June 15 to
Nov 15 but so far, none of the liners had done
so.
“Nevertheless, the capacity of trade routes to
Europe from Asia is quite tight now as most of
the major lines have withdrawn, consolidated,
merged or suspended trade that doesn’t generate
enough cargo or considered non-profitable,” he
said.
Asean Port Association (APA) working committee
chairman Datuk Capt Abdul Rahim Abd Aziz said
many, if not all, shipping lines had reported
losing US$250mil to US$350mil per quarter since
the global economic meltdown.
“Ships laid up as of last month were reported to
be about one million 20ft equivalent units (TEUs),
corresponding to 400 vessels worldwide – which
is about 10% of the world’s capacity.
“The current situation is expected to stay till
early part of next year,” he said in Kota
Kinabalu recently.
Correspondingly, Abdul Rahim said the decline in
Malaysia’s ports’ volume was between 25% and
30%.
“But I am happy to report that it has stabilised
somewhat since about a few of months ago.
Nevertheless, it’s too early to tell whether
this stabilisation is here to stay and improve,
or otherwise,” he said.
Source: NST Business Times |
