Published on: Friday, July 30, 2010 |
Kota Kinabalu: The Malaysia Shipowners Association (Masa) feels slighted at being held responsible for the higher costs of goods and services in Sabah, while forwarding agents, hauliers, ports and warehouse operators are spared.
In this context, it said the Federation of Sabah Manufacturers (FSM) should demand similar clarifications on the price structures from the others, which it claims are the ones contributing to more than 50 per cent of the transportation costs of goods.
"In many cases, even after the removal of bunker surcharges for the return leg by our member shipping lines the charges will still appear in the invoices received by shippers from their agents," said Masa Chairman, Ir Nordin Mat Yusoff.
Following an adjustment to the bunker adjustment formula, shippers would have saved more than RM30 million annually.
"We are not sure if this savings have gone to shippers, or are going into the pockets of some others who have chosen to keep silent," he said.
"Who is responsible for such irresponsible act if such savings are not going to the shippers and places the shippers on a collision course with shipping lines?" he asked.
Ir Nordin said no consumer goes into the supermarket and queries on the price structure "and yet we shipowners have responded to such queries when asked to do so even though we have not asked the exporters and importers to reveal their cost structure.
"We have always maintained that unless and until all the intermediaries involved in the transportation chain act with some positivity, this debate on the Cabotage Policy will never end simply because the issue has become so murky and people are missing the woods for the trees," he said.
"We feel the debate on the Cabotage Policy has been derailed or is being hijacked though we are less clear of the reasons for this," he said.
The Cabotage Policy, implemented in 1981, reserves the trade between any two ports in the domestic waters to only Malaysian flagged and owned ships.
The policy is applied by more than 50 countries worldwide, including the US, India, China, Japan, the Philippines, Indonesia and Australia.
Ir Nordin said Masa is appalled by the callous statement of FSM that a few companies in Sabah have gone bankrupt because of the Cabotage Policy.
"While we are not sure of companies in Sabah going bankrupt because of the Cabotage Policy, I can say with certainty that the shipping companies, which incidentally are mostly from Sabah and Sarawak, would face bankruptcy if the Cabotage Policy is removed," he said.
There are nine local shipping lines serving the container liner trade between Peninsular Malaysia and Sabah/Sarawak.
According to Ir Nordin, these shipping companies, including those listed on the local bourse, have invested billions of ringgit over the last three decades under the Cabotage Policy and would stand to lose.
The collateral damage to the economy would also be higher because of loss of jobs among seafarers and their families who are mostly from Sabah and Sarawak, loss of businesses and livelihood to shipyards, ports and related ancillary service providers.
"While there is no assurance that the shipping cost will decline with the removal of the Cabotage Policy, there is even a bigger threat the shippers and the Government will face as they will have no recourse to remedy if shipping rates are high or increase when the trade is open to foreign shipping lines."
Hence, there is a urgent need for the shippers, especially the FSM and Masa as well as other intermediaries to discuss the problem and seek an amicable solution.
"We should stop barking up the wrong tree as removing the Cabotage Policy is not a cure all for problems faced by Sabah such as lack of interest in investors, high costs of goods and lack of shipping connectivity to global markets," said Ir Nordin.
He said the Cabotage Policy does not prevent shippers in Sabah from exporting directly to any market worldwide nor does it prevent any foreign shipping line from calling at any port in Sabah and a foreign port.
"If the complaints by shippers in Sabah is that there are no or not enough shipping services to take their exports to export markets overseas then the solution does not lie with liberalising or scrapping the Cabotage Policy," he said.
Ir Nordin said foreign shipping lines are free to call between any port in Sabah and overseas ports like Singapore, Yokohama, Busan, Shanghai and Rotterdam and there is no law or government policy stopping foreign shipping lines calling at ports in Sabah.
Masa was able to verify that there are three foreign shipping companies and one local carrier providing shipping services to/from Sepangar Bay Port (Kota Kinabalu) direct to foreign ports without having to tranship at Port Klang or Singapore.
These carriers have been given preferential berthing priority by Sabah Ports Sdn Bhd (operator of Sepangar Bay Port) while Masa members shipping lines are denied of this benefit.
Masa also pointed out that imported raw materials from foreign countries not only can be imported directly by any foreign carrier into Sabah but can be transhipped at Port Klang or any Malaysian ports by any foreign carriers into any Sabah ports under the recently partially liberalised Cabotage Policy.
The same applies to exports from Sabah which may be transhipped by foreign lines to Port Klang for re-shipment to overseas market or can be exported directly.
"Under this circumstance, calls for the removal of the Cabotage Policy is totally misplaced and its removal in this regard would have absolutely no impact simply because the Policy only reserves the trade to Malaysian ships trading between any two ports within the country," he said.
"If the shippers are having problem finding ships at Sabah ports to take their exports to markets in Japan, Europe or China, then the answer to this problem lies elsewhere and most certainly not in scrapping the Cabotage Policy."
Among the reasons shipping connectivity is low between ports in Sabah and foreign ports to where the exports are targeted, is simply the volume of cargo is very low, he said, adding this must be examined by the state and federal governments, the ports and the shippers themselves.
"If the shippers in Sabah and the FSM are expecting an overnight solution to this low shipping connectivity by simply calling for the Cabotage Policy to be removed then this is simply a case of misinformation," he said.
He said Masa as a stakeholder representing shipping lines serving the domestic trade has a duty to correct this wrong perception of the Cabotage Policy as this constant harping on the Policy being responsible for the high cost of goods and high cost of living in Sabah appears to gaining weight for the wrong reason in political circles.
"We want to correct this misperception and would like to urge shippers to also do likewise and direct their grouses elsewhere than blaming the Cabotage Policy for the high cost of goods in the state," he said.
Ir Nordin called on the shippers in the state to seek clarification of all costs and charges in the total freight or transportation bill and not just attribute the landed cost of goods or the shelf price of goods to shipping costs.
"Our member lines have demonstrated their sincerity by providing details of the cost structure of the shipping cost when called upon by the shippers to do so," said Ir Nordin.
