Hornbill Unleashed

May 29, 2017

Sarawak, Sabah shipowners: Don’t abolish cabotage policy

Filed under: Politics — Hornbill Unleashed @ 8:01 AM

sabah-sawawak-portThe Sarawak Sabah Shipowners Association (SSSA) has urged the Sarawak government not to push for the abolition of the cabotage policy.

The SSSA said, according to a report in The Borneo Post, that if the state government were to abolish the cabotage policy permanently at the end of the six-month trial period, the few companies that were still in the business would close shop.

It said freight rates, which have been on a steady decline, had forced at least four listed companies on Bursa Malaysia to exit the industry over the years.

“The domestic containerised shipping industry has gone through a major consolidation in the last six years, similar to the global liner consolidation whereby companies were unable to survive the deteriorating market condition of low rates.

“The freight trend from Port Klang to East Malaysia has been on a steady decline for the past decade where companies such as MISC Group, PDZ Holdings Berhad, Swee Joo Coastal, Hub Line and Geniki Shipping were forced to exit the container shipping trade, four of which were listed companies on Bursa Malaysia.

“The consolidation of these companies has left four operators in the business (Malaysian Shipping Corporation, Harbour-Link, Shin Yang Shipping and MTT Shipping),” said the SSSA.

The Borneo Post quoted the SSSA as saying if the state government were to abolish the cabotage policy permanently at the end of the six-month trial period beginning June 1, the remaining companies would likely gradually phase out of the business.

The report quoted the SSSA as saying: “Sarawak’s maritime interests should also be protected as 85% of Malaysian-flagged vessels belong to Sarawak companies or individuals. And out of 100 shipyards in Malaysia, 72 are in Sarawak.

“The academy in Sarawak also produces more seafarers than Peninsular Malaysian academies. As a state, Sarawak has more to lose when the Malaysian maritime industry collapses as a result of the liberalisation of cabotage.”

Source : FMT Online


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