Recently Malaysia ’ s maritime industry has been affected by the onslaught of three major crises , specifically the US and China trade war , the Coronavirus pandemic , and the plunge in oil prices . Almost immediately , Malaysia ’ s ports , shipping and bunkering sectors found themselves having to sustain themselves in an unprecedented situation , now commonly termed as the ‘ new normal ’. In this challenging environment , the industry must not only comply with the International Maritime Organisation ’ s ( IMO ) conventions on low sulphur and port facilitation but must also adapt to the ‘ new normal ’.
Background
Since early 2020 , the global economy has been badly hit by the three unprecedented crises mentioned above . The onslaught of these crises pushed many countries into recession , with the International Monitory Fund ( IMF ) predicting the worst economic downturn since the 1913 Great Depression ( AFP 2020 ). Many countries have since tried to safeguard their economy by providing economic stimulus packages .
As a trading nation , Malaysia could not escape from the impact of these crises . The World Bank projected Malaysia ’ s 2020 GDP growth to contract to negative 0.1 % amid the impact brought on by the Coronavirus pandemic ( ARUNA 2020 ). Though temporarily relieved by the Government ’ s stimulus packages , many sectors in the economy , including the maritime transportation industry , face an uncertain future surviving in the postpandemic environment . Prime Minister Tan Sri Muhyiddin Yassin has stressed that going forward , Malaysians would need to adjust to the ‘ new normal ’ ( Adib Provera , 2020 )
Challenges in the Global Economy
The global economy was first hit by the US-China trade war last year , followed by the Coronavirus pandemic as well as the plunge in oil prices . In the US-China trade tensions , the US initially raised tariffs on China ’ s imports from 10 % to 25 %, and later tariffed another 10 %. There were winners when the US moved to Vietnam , South Korea ,
Thailand , India , and Mexico for imports . On the other hand , countries like Malaysia , which supplies raw materials and semi-finished goods to China to be shipped to the US as finished goods , lost out .
With the Coronavirus pandemic , sectors ranging from airlines to accommodation services , to manufacturing , and to farming are all affected by lockdowns . The face of the global economy is now shifting towards the new environment , which entails new trends in the way of doing business . Coincidentally , oil prices took a plunge due to over-production by major oil-producing countries , limited storage space and low demand for oil , as industries were slowing down during the lockdown .
The Impact of the Crises on Global Maritime Economy
The US-China trade tensions significantly reduced the cargo volume between the two major economies on the Trans-Pacific sea lane . It also affected the shipping of goods for countries that supply raw materials and semi-finished products to China . There was , however , an incremental increase in cargo volume from Vietnam and Thailand to the US .
The Coronavirus pandemic and lockdown measures badly hit the ports , shipping and bunkering sectors . In the bunkering sector , traders in Rotterdam , Fujairah , Singapore and Zhoushan are facing low demand for bunker oil as shipping lines are cancelling their voyage bookings due to reduced cargo .
The Impact of the Crises on Malaysia ’ s Maritime Transportation Industry
In Malaysia , the maritime transportation industry has been unable to escape from the impact of the three crises as described below .
The US-China Trade Tensions . The escalating tariffs between the US and China have shifted imports away from China , which in turn affect countries like Malaysia , which supplies raw materials and semi-finished products to China . In Malaysia , Penang Port had a slight decline in container throughput last year as the port was
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