REPORT
INGENIEUR
Impact of US-China Trade Tensions , the Coronavirus , and the Plunge of Oil Prices on the Malaysian Maritime Transportation Industry
By Cdr . Ang Chin Hup ( R ) Senior Researcher , Centre for Maritime Economics and Industries Maritime Institute of Malaysia
This article is extracted from the paper published in SEA VIEWS , No . 3 / 2020 , an online platform for The Maritime Institution of Malaysia ( MIMA ) researchers to articulate their views on issues and developments in the maritime domain . Unless otherwise stated they do not represent the official stand of MIMA on the matters discussed .
Malaysia ’ s maritime transportation industry has seen many years of growth from the benefits of the nation ’ s strategic location , well-developed infrastructure , and buoyant economy . Recently , this growth lost its momentum due to US and China trade tensions , the Coronavirus pandemic and the plunge in oil prices . The trade tensions affected Malaysia ’ s ports handling exports to China . The plunge in oil prices affected demand for bunker oil due to reduced shipping activities . Meanwhile , the Coronavirus pandemic disrupted port operations . As solutions for these impacts , this article recommends a diversified supply chain , logisticscentric ports , a comprehensive bunkering strategy , and strict compliance with the International Maritime Organisation ’ s conventions .
The maritime transportation industry in Malaysia was growing steadily during the decade up to 2018 . According to the Review of Maritime Transport 2019 , Malaysia ’ s Port Klang and Port of Tanjung Pelepas ( PTP ) are the 12 th and 18 th leading global container ports , and achieved 12.03 million and 8.79 million Tonne Equivalent Units ( TEUs ) respectively by 2018 . The report also ranked Malaysia ’ s shipping sector in 31 st position in terms of ship ownership by Dead Weight Tonne ( DWT ) when it reached 8.732 million DWT last year ( UNCTAD 2019 ).
The ports and shipping industry were experiencing a relatively buoyant climate , attributed to the improvement in the global maritime transportation market , driven by better freight rates across all shipping segments .
The rapid development of the maritime transportation industry in Malaysia can be credited to the nation ’ s strategic location on the Asia- Europe shipping route , as well as its infrastructure and buoyant oil and gas industry . As a maritime nation , more than 80 % of the nation ’ s total trade depends on its ports and shipping , while the oil and gas industry contributes approximately 20 % to Government revenue .
24 VOL 83 JULY-SEPTEMBER 2020