MNSC: Support needed to assist shippers in road to recovery

Malaysia has made significant progress to kick-start its manufacturing activities since the Conditional Movement Controll Order (CMCO) was declared on May 4, 2020 as it allowed all manufacturing as well as import and export activities to resume at full capacity subject to Standard Operating Procedures set out by the Minsitry of Health. We note that the manufacturing IHS Markit Purchasing Managers’ Index (PMI), has risen sharply to 45.6 in May from April’s 31.3. The Malaysian National Shippers’ Council (MNSC) acknowledges the statement made by YB Minister of Transport on June 27, 2020 that seaborne freight levels in particular have returned close to what they were before the MCO period. These are largely due to the requirement by Malaysian exporters to fulfill back orders that were held back during the MCO period.

MNSC is however highly concerned about the new export orders amid weak global demand. Malaysia’s exports of goods and services declined for a third consecutive quarter by 7.1 percent in Q1 2020 (Q4 2019: -3.4 percent). The sharp fall in exports is attributable to the global economic recession and decreased trade volume caused by the COVID-19 outbreak. Shippers’ activities has been further dampen due shut-out of ports around the world. This is another factor causing slow down in imports and exports as the supply chain is affected. This issue is further exacerbated as most ports in the world practice 14 days quarantine for the crew and cargo for import shipments and thus this limits the shipping services which inevidently increases the cost of shipping. Based on feedback from shippers, we note also the increase in logistics costs of between 10% to 20% which will further cripple Malaysia’s export competitiveness during this recovery period.

MNSC greatly commends the timely intervention by Ministry of Transport (MOT) to urge port authorities to waive port related charges as this has led Port Klang, Johor and Sabah port authorities to grant waiver on port storage charges during the MCO period. This move has greatly reduced the burden of financial losses that shippers will need to bear during this difficult period. We call for MOT’s intervention once again, this time with the shipping lines to urge them to waive or to provide discounts on demurrage and detention charges due to delays in collection of the cargo held during the MCO period. These charges based on daily surcharge have accumulated to a significant amount and have been passed on directly to shippers/ manufacturers.This measure is an important step to ensuring shippers ability to cope and their survival during this unprecedented period failing which there would be detrimental impact on the overall economy.

About MNSC
The MNSC was established in 1972 and members consisted mainly from the commodity based exporters. Among the objectives of the Council are to protect, represent and promote the interest of Malaysian exporters and importers, producers, manufacturers, trade and industry associations and commodity based associations in relation to the transportation of goods. FMM has taken over the Secretariat of the Malaysia National Shippers’ Council (MNSC) from the Ministry of International Trade and Industry (MITI) effective June 2015.

Contact Details:
Ms Tan Ai Joo, Secretariat
Malaysian National Shippers’ Council (MNSC)
Wisma FMM, No.3, Persiaran Dagang, PJU 9
Bandar Sri Damansara
52200 Kuala Lumpur

Tel : 03-6286 7200
Fax : 03-6274 1266/7288
Email : [email protected]