Delay Proposed 30 Pct Port Tariff Hikes -- FMM

By Harizah Hanim Mohamed

KUALA LUMPUR, March 8 (Bernama) – The Federation of Malaysian Manufacturers (FMM) has called on the government to postpone the implementation of the proposed 30 per cent rise in port tariffs, particularly for container handling and storage, as it will have major implications on cost of doing business for manufacturers and shippers.

FMM president Tan Sri Soh Thian Lai disclosed that the Port Klang Authority (PKA) and Johor Port Authority (JPA) are in the process of finalising the tariffs increase for Westports, Northport and Port of Tanjung Pelepas (PTP) for submission to the Transport Ministry (MOT) for gazettement.

“With Port Klang handling 14 million twenty-foot equivalent units (TEUs) annually, at a current container handling tariff of RM300 per 20-foot container, the proposed 30 per cent increase would add RM90 per container. 

"This increase would result in an additional RM1.26 billion in annual costs, directly impacting shippers and manufacturers relying on the port for imports and exports,” he told Bernama when contacted today.

FMM has been the permanent chair and secretariat of the Malaysian National Shippers’ Council (MNSC) since 2015.

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Soh cautioned that higher tariffs would reduce Malaysia's cost competitiveness, redirection of shipping traffic to neighbouring countries with lower tariffs, and ultimately, jeopardise Malaysia’s position as a key player in the global supply chain.

The proposed higher tariffs would also raise Port Klang’s container handling fees to US$130 per TEU from US$120 (US$1= RM4.4185), matching or exceeding those of major competitors like Singapore and Hong Kong. 

“Malaysia’s ports have long been recognised as cost-effective options for shippers, offering competitive tariffs compared to regional players such as Singapore, Hong Kong, and India. 

"However, the proposed 30 per cent tariffs increase threatens to undermine this advantage, creating a wider disparity with ASEAN neighbours like Thailand, Vietnam, and Indonesia, where container handling fees remain significantly more affordable," he said.

According to Soh, storage charges beyond the free period will surge from RM15 per day to between RM51.75 (+245 per cent) and RM95.40 (+536 per cent) for a 20-foot import container, following the tariff adjustments.

Similarly, for a 20-foot export container, rates will rise from RM4 per day to between RM13.80 (+245 per cent) and RM25.44 (+536 per cent).

"These substantial cost increases will further burden industry, worsen Malaysia’s declining competitiveness, and hinder efforts to streamline trade and logistics operations," he said.

Soh also urged for transparent reviews of the proposed tariff adjustments, as the 30 per cent hike could lead to double charging shippers for costs that port operators are already obligated to cover.

According to him, port operators are contractually obligated to finance all development and infrastructure costs using their operational revenues under the existing concession agreements. Federal ports have consistently demonstrated sound financial performance, collectively generating RM32.46 billion in revenue between 2019 and 2023.

"Transparent reviews of proposed tariff adjustments are essential to prevent shippers from bearing undue financial burdens for development and infrastructure expenses," he said.

Soh said while FMM supports sustainable and equitable development of Malaysia’s ports, tariff revisions must be transparent, justifiable, and aligned with Malaysia’s economic objectives, Soh said.

“We strongly urge MOT to defer the proposed tariff increase until a comprehensive review is completed, ensuring that Malaysia’s ports remain competitive and cost-efficient,” he added.

-- BERNAMA