Maritime authorities in Malaysia are exploring whether to build a new port on Carey Island, Selangor, as the country continues to lose container traffic to neighbouring Singapore.
According to local media, a feasibility study into the proposed integrated maritime city is underway, which, if given the green light, would see an additional 30 million TEU added along the Malacca Straits.
By comparison, data compiled by Alphaliner shows Malaysia’s biggest container ports – Port Klang and the Port of Tanjung Pelepas (PTP) – handled a combined 20.9 million TEU in 2018, well behind the 36.6 million TEU handled in Singapore.
However, not all stakeholders are convinced Carey Island port is needed as there are plans to expand the Northport and Westports terminals at nearby Port Klang, the country’s leading transhipment hub.
Abi Sofian, former managing director of Northport, pointed out that Westports had already been approved to increase its capacity to 30 million TEU.
“I believe many events have overtaken the need for another terminal at Carey Island, and it will be a tough challenge to come up with an investment with attractive returns for a new port there,” he reckoned.
On the other hand, proponents of the development argue it is necessary to counteract the huge 65 million-TEU mega-port under construction at Tuas, Singapore.
Indeed, the competition from the city-state has been fierce, with the Port of Singapore Authority (PSA) successfully attracting carrier groupings – THE Alliance and the Ocean Alliance, to use Singapore as their primary transhipment hub. The PSA set up has set up combined operations with ONE, CMA CGM, COSCO, and PIL through its strategy of forming joint-venture terminals.
After losing the Ocean Alliance and other carrier calls to Singapore, Port Klang’s container throughput fell 9% in 2017 before recovering by just 0.4% in 2018. In comparison, Singapore’s volumes grew by 8.7% last year, according to Alphaliner.
“Neither PTP nor Port Klang can match the scale and capacity Singapore currently has,” Alphaliner’s executive consultant Tan Hua Joo told The Edge Malaysia.
“At various points in the last few years, there were congestion problems at PTP and Port Klang that resulted in cargo loss to Singapore.
“Malaysian ports have the edge over Singapore in terms of stevedoring costs. But Singapore offers superior network connectivity and lower bunker fuel costs, which allow its users to offset the higher stevedoring costs,” he added.
Tan argued a coordinated national maritime policy is needed in Malaysia to address challenges such as excessive competition between domestic ports and coordinating capacity development.
“I believe a total revamp of the stakeholders in the port and logistics industry is required more than ever,” agreed Sofian.
“Especially with regards to Port Klang – what kind of study is required on Carey Island after so many have been done over the years?”
Backers of the Carey Island project, however, said the new hub was long overdue.
“It was supposed to be built five years ago, but new owners at Northport are looking at local indigenous cargo rather than transhipment, which is a lapse in judgement or lack of due diligence,” claimed Mohammed Husain, a local shipper.
“Carey Island will enjoy the accessibility of the South Klang Valley Expressway, making Nilai and Seremban only an hour away. So perhaps this will be a new extension of the Greater Kuala Lumpur Corridor.”