FMM CALLS FOR EXPORT CRISIS TASK FORCE AMID STRAIT OF HORMUZ DISRUPTIONS

KUALA LUMPUR, March 10 (Bernama) -- A coordinated government–industry response is needed to address the growing impact of the Iran-US-Israel conflict and the disruption around the Strait of Hormuz on Malaysia’s manufacturing exports and maritime trade, said the Federation of Malaysian Manufacturing (FMM).

Its president, Jacob Lee Chor Kok proposed that the government establish an Export Crisis Response Task Force, an ad hoc government–industry mechanism that can be activated when trade disruptions arise to address operational challenges faced by exporters and shippers.

“Recent international events highlight the need for such a mechanism, as ongoing tensions in the Middle East are affecting major maritime routes.

“A coordinated response platform would enable timely engagement between government agencies and industry to assess developments, share information, and respond quickly when such disruptions occur,” he said in a statement today.

Lee said major shipping lines have introduced emergency freight increases for cargo moving to and from Gulf ports, while war-risk insurance premiums have also risen sharply.

Citing Port Klang as an example, he said the port is experiencing congestion, which could worsen if shipping routes are further disrupted.

Malaysia’s manufacturing sector faces direct exposure to disruptions in global shipping routes, with more than 90 per cent of the country’s trade transported by sea.

“Stable and reliable maritime logistics remain critical to sustain export performance and industrial production, and recent developments in the conflict already show rising freight costs and operational disruptions,” he added.

Based on industry experience during the Red Sea crisis in 2024, freight rates on affected routes rose up to threefold within weeks, while vessel diversions extended transit times by up to two weeks.

“Manufacturers exporting to Gulf markets now face higher freight costs, tighter vessel capacity and uncertainty over delivery schedules.

“Higher global oil prices may also increase industrial energy costs and logistics expenses across the manufacturing sector,” he said.

While the Gulf Cooperation Council countries are not Malaysia’s largest export destination, the region remains an important secondary market and a key transhipment hub for cargo moving onward to Africa, Central Asia and parts of Europe.

Disruptions to Gulf ports, therefore, affect not only direct exports to the region but also shipments destined for other markets.

Lee said the proposed task force should provide real-time market intelligence on freight rates, shipping routes and logistics developments, facilitate information sharing between government agencies and industry stakeholders, and coordinate rapid responses to address operational challenges faced by exporters and shippers.

He suggested that the task force be chaired by the Ministry of Investment, Trade and Industry and bring together relevant agencies under the ministry alongside representatives from the Ministry of Transport, port authorities, the Ministry of Finance, the Royal Malaysian Customs Department and Bank Negara Malaysia, with industry representation through FMM.

“The task force would also enable emerging disruptions to be identified early and, where necessary, introduce support measures to assist exporters facing higher freight costs, vessel capacity constraints and shipment delays,” he added.

-- BERNAMA