Freight forwarders want govt to help bring down escalating logistics cost

PORT KLANG: The freight forwarding industry wants the government to intervene and help bring down overseas logistics rates which have escalated almost 10 times compared to the pre-COVID-19 period, said an industry member.

Freight forwarder Mory-Tnte Mondial Express Sdn Bhd chief operating officer N. Thaswin said a 40-foot container that gets sent to the United States pre-COVID-19 would be in the range of US$3,000 (US$1=RM4.23) to US$4,000 per container but the same container now costs US$22,000 to US$23,000 currently.

"It (the freight cost) is ridiculous. Other countries are getting involved whereby they have conducted dialogues with carriers and they're given incentives for the possibility of reducing their freight cost.

"Malaysia's manufacturing companies are among the biggest in South East Asia and there are a lot of foreign direct investments involved and these (high freight rates) are taking a toll on manufacturers because even though they are able to manufacture goods, they are unable to export due to the increase in freight costs.

"We hope the government will be able to intervene in the escalating logistics cost to see how they (the government) can help logistics companies," he told Bernama after witnessing the arrival of MV Tonsberg, one of the biggest roll-on/roll-off ships, at Westports here today.

Thaswin said shipping lines are engaging in monopolistic practices due to losses incurred during COVID-19, particularly in the first six months of the global lockdown.

"They were unable to operate and move goods, so now they're trying to recover that. Most of the shipping lines are in an alliance so they have a general rate increase every month which has to be complied with by all the shipping lines that are in an alliance group," he said.

Thaswin added that the government should intervene because the governments of other countries are intervening, either through directives or incentives.

Citing Westports as an example, he said that the government can work with the port operator to give certain incentives to shipping lines that come to Port Klang, whereby those shipping lines will be given competitive or cheaper rates compared to shipping lines in other countries.

Thaswin said Malaysia also has similar freight cost issues pertaining to air cargo, as a lot of cargoes are being shipped to Singapore because of the vast difference in cost between airports in Malaysia and Singapore.

"It is much cheaper in Singapore, so this is another area that needs to be looked into. A lot of our cargoes move via Singapore because we can't get the flight or the space and the freight rate is an issue in Malaysia as it is not competitive at all.

"Singapore (airports) have cheaper rates because not only the government intervenes in the rates, they have more flight options, as it is more competitive and the (logistics) prices are lower," he said.

Mory-Tnte Mondial Express Sdn Bhd has been involved in the international and Malaysian freight forwarding scene for over 34 years and has covered all aspects of logistics - air, sea and land as well as project-based logistics, with core businesses in the oil and gas as well as heavy industry sectors.

--BERNAMA