Yet another Labuan bombshell

Labuan: All containerised cargoes imported or exported will be subjected to a "Labuan Port Congestion Surcharge" effective this month.The rate applied is RM500 for a 20-foot and RM1,000 for a 40-foot container.

Certain shipping companies, however, would calculate the rate based on US currency and it is USD100/20 and USD200/40.

The term applied by them is not port surcharge but Container Imbalance Surcharge (ISD).

One company providing regular service to Labuan – Malaysia International Shipping Corporation (MISC) issued a circular to all clients on November 21 which read:

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"On-going port congestion and poor productivity at Labuan port, additional costs are now being incurred by the vessel operator or vessels conducting load and discharge operations are now required a longer port stay."

The circular added that the surcharge was being implemented in order to continually provide regular services.

Labuan Chinese Chamber of Commerce (LCCC) Chairman Datuk Wong Kii Yii said it was "dismayed" by the news.

"First the island is yet to recover from the fatal blow of oil price slump. Then came higher electricity and water charges and just three weeks ago the island's most important duty-free status asset was snatched away by way of placing curbs.

Now another dagger is plunged into the local economy which would likely cause consumers to suffer further.

Saying the year so far has only been one bad news after another for Labuan, Wong said it has been acknowledged by various studies and surveys that the cost of living here was higher than many other towns in Malaysia while the income of the people was dwindling.

He said many were struggling to meet household expenses. "Now, if the port charges increases, neither the agents, forwarders or the consignees would absorb the new charge but pass it on to consumers."

"Penang and Langkawi are enjoying all the progress and new developments with economic spin-of while Labuan is left to feel like a condemned island."

He said the setting up of various Task Forces and other groups to solve Labuan's woes would not bring any results but action would.

Wong said even without the new port charges, it was already considered high so much so that some forwarders prefer to use Kota Kinabalu port for containers shipped from Labuan.

This was because the cost of shipping a 20 footer via KK was RM1,300 plus RM500 for land haulage (Labuan-KK) and the total cost was RM800. The cost from here was RM2,600 in the case of 40 footer and the price difference was more than RM1,000. In KK, there is no bunker surcharge and the weigh bridge is within the port, unlike Labuan.

Wong urged Transport Minister Datuk Seri Liow Tiong Lai to not just talk about what MCA has done or can do.

"His Ministry is responsible for ports and it should play an active role in solving the problems faced by port users."

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It was learnt that the surcharge was not due to any long queue-up of ships waiting to berth here, but the huge pile-up of unreturned empty containers that filled up the container yard and affected operators.

The port operators had established another container yard to handle the problem but it could not be effectively solved.

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