Freight forwarding industry needs the government to intervene to help bring down overseas logistics rates which have escalated almost 10 times compared to pre-COVID-19 period, said an industry member
Freight forwarder Mory-Tnte Mondial Express Sdn Bhd Chief operating officer, N. Thaswin said a 40-footer container that goes to the United States (US) during pre-COVID-19 would be in the range of US$3,000 to US$4,000 per container and the same container amounts to about US$22,000 to US$23,000 currently.
"It (the freight costs) is ridiculous. Other countries are getting involved whereby they've conducted dialogues with carriers where they're given incentives for a possibility to reduce their freighting cost.
"Malaysia manufacturing companies are among the biggest in South East Asia and there is a lot of foreign direct investments involved and these (high freighting rates) are taking a toll on manufacturers because even though they're able to manufacture goods, but due to increase in freight costs they're unable to export.
"We hope the government will be able to intervene in escalating logistics cost to see how they (the government) can help the 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 also said shipping lines are monopolising because of losses that were incurred to them during COVID-19, particularly in the first six months of world economy lockdown.
"They're 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 by all the shipping lines that are in alliance group," he said.
Thaswin said the government should intervene because a lot of other countries' government is intervening in this, by instructing the shipping lines or give them certain incentives.
He cited Westports as an example, saying that the government will be able to work with Westports to give certain incentives to shipping lines that come into Port Klang whereby those shipping lines will be considered giving more competitive, interesting and cheaper rates compared to other shipping lines in other countries.
Thaswin said Malaysia does have similar freight cost issues pertaining to air cargo, as a lot of cargo is being shipped to Singapore because the cost comparison between Malaysia airports and Singapore airports are vast.
"It is much cheaper in Singapore, so this is another area that needs to be looked into. A lot of our cargo projects will 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) has 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 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 industries sectors.
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