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Let experts manage ports to spur growthFree Malaysia Today - JUL 25 2019

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Ports that are strategically developed and managed, offer a multitude of advantages that help create a multiplier effect and provide direct financial benefits within the locality as well as indirect or spill-over economic activities that benefit the districts and regions. It is a gateway for socio-economic growth that benefits people, state and nation.

Therefore, in efforts to capitalise on the current and future growth potentials of the region, one of the key components that must be taken into consideration is port throughput.

Port throughput refers to the number of vessels the port handles over time, cargo tonnage, container TEU and vessels calls that is defined by the commodities carried.

Depending on the port demographics, physical capabilities and long-term strategies, it is important for ports to optimise resources and capabilities, and in so doing require operators who possess the best expertise, international exposure and capabilities to ensure profitability and sustainability.

Among the port operators, MMC Corp seems to possess the track record as a strategic operator with experience and an international track record in turning around ports. In this context, the group works closely with state governments and international parties to achieve the overall objectives.

In Malaysia, there are a number of strategic ports that currently serve the needs of the nation as well as the states.

These include federal ports of Port Klang, Johor, Tanjung Pelepas, Kuantan, Penang, Bintulu and Kemaman.

Sarawak has four primary ports located in Kuching, Sibu, Bintulu and Miri, while Sabah has eight main seaports that are accessible by international shipping.

These include Kota Kinabalu, Sepangar Bay, Sandakan, Tawau, Lahad Datu, Kudat, Kunak and Labuan.

Ports in Malaysia.According to Ports and Harbors magazine, MMC Corp manages and operates some key ports in Malaysia. Its international exposure and collaboration, and its ability to turn around ports, have resulted in optimising business operations and profitability of the ports it manages.

The Port of Tanjung Pelepas (PTP) in Johor is the country’s most advanced container terminal that is strategically located at the confluence of the main east-west shipping lanes. It is managed by both MMC Corp and has Maersk International – a globally recognised shipping company – as its partner. The port continues to handle increasing volumes of shipments with ease, due to proper and professional port management.

Reports have also highlighted that MMC Corp has been successful in rescuing the ailing Penang port, one of the oldest and and longest established ports in Malaysia that serves as the main gateway for shippers in the northern states of Malaysia and southern provinces of Thailand.

Previously, due to poor port management, the port wasn’t performing well. It was only after the takeover that Penang port improved its efficiency and became more competitive and profitable.

The other ports managed by the company includes Johor Port, North Port (Malaysia) Bhd, Tanjung Bruas Port and the Red Sea Gateway Terminal in Saudi Arabia.

The ports in Sepanggar and Sipitang in Sabah are some of the key ports that can play an important role in economic development of the region and state. These ports offer opportunities for a turn-around given the right operator with extensive experience.

However, the Sipitang port would require immediate attention so that the existing jetties can be transformed into state-of-the-art ports that can not only sustain the current and future growth potentials of Sipitang and the region but also act as gateways to international markets.

Ports are tricky to manage and only the best and most capable operators with local and global experience can ensure ports thrive and remain successful. The key challenge remains transhipment, which involves the shifting of operations from one port to another, resulting in revenue loss for the former.

In today’s sluggish global trade, shipping companies have engaged in strategic cost-cutting measures such as streamlining operations to increase efficiency.

Upheavals in trade between the US and China continue to keep the economy in the region volatile. For this reason, an experienced and capable port operator is required to spearhead innovative approaches, leveraging an established international network and a collaborative approach with the state and federal governments to bring the optimum economic benefits to all stakeholders.

Sherman SS, Consultant – Economics & Finance, Singapore