Malaysia’s ports have staged remarkable performances in 2021 with record breaking numbers and are ranked among world’s most efficient during the Covid-19 pandemic.
The country’s leading port, Port Klang, handled a record-breaking container volume of 13.64 million twenty-foot equivalent units (TEUs) of container throughput as of December 28 2021.
Despite the many challenges, particularly the Covid-19 pandemic and the spillover effects of container shortages, port congestions and most recently, adverse weather conditions, Port Klang has managed to achieve the stellar performance surpassing its 2019 record of 13.58 million TEUs.
Transport Minister Datuk Seri Dr. Wee Ka Siong attributed the outstanding performance to the government’s proactive measures to facilitate Malaysia’s port and logistics sector during the pandemic, which kept the industry ticking towards meeting the demands of both domestic and international markets.
Wee said the introduction of several economic stimulus packages aimed at increasing consumer spending resulted in higher demand for consumer goods which mainly leveraged on e-commerce platforms to expedite distribution and delivery.
With the gradual re-opening of the global economy in 2021, container volume handled at Port Klang regained its momentum, according to Wee.
As of November 2021, Malaysia’s total imports recorded a growth of 5.8 percent compared to the performance in January to November 2020, while exports saw a growth of 4.8 percent and transshipment increased by 5.6 percent.
“The outlook for 2022 remains optimistic towards further growth given Port Klang’s competitive edge as a leading logistics hub in Asia and its strategic geographical location coupled with the government’s proactive policies which is further expected to strengthen the logistics industry,” Wee added.
Port of Tanjung Pelepas
Meanwhile, Port of Tanjung Pelepas (PTP) has surpassed 11 million TEUs of container throughput on December 25 2021 at approximately 10.00 am during the loading process at Maersk Amazon. PTP created a new milestone by becoming the first container terminal in Malaysia to surpass 11 million TEUs throughput volume in a year, and thus further strengthened PTP’s position as one of the top 15 global ports.
PTP, located in Iskandar Putri, Johor Bahru, subsequently registered a total volume of 11.2 million TEUs at end of 2021, representing an increase of 14 percent growth in its yearly volume as compared to 9.8 million TEUs in 2020.
“At the time when other ports around the world are still reeling from the impact caused by various business and operational issues due to the ongoing Covid-19 pandemic, rising freight costs, port congestions, vessel blockages, equipment and manpower shortages and many more, PTP has shown great resilience in navigating through these challenges,” Wee said in his speech at an event organized by PTP on January 7.
According to Wee, the tremendous growth of PTP over the years has thus truly underlined the value of the maritime sector to Malaysia’s economic well-being and the importance of trade economy to the nation.
“As ports are essential contributors to Malaysia’s growing international trade, hence crucial to the prosperity of its trade-dependent economy, the Malaysian government spares no efforts to continuously develop the industry by enhancing its capacity, developing human resources, ensuring the safety of ships and navigation, and continuously providing efficient ancillary services,” Wee added.
Datuk Sri Che Khalib Mohamad Noh, PTP Chairman, explained that the mutual understanding and smart business collaboration that PTP has nurtured with its customers and stakeholders, especially in ensuring transparency in operations and business have thus cushioned both sides from the downside scenario and impact of such challenges.
“With the increase demand from our customers and our growth prospect, our primary focus now is to optimize our terminal footprint up to 15 million TEUs in the coming years,” said Che Khalib.
On November 23 2021, PTP surpassed 10 million TEUs, which exceeded the nine million TEUs target under Aspiration 2 of the Ministry of Transports 100th Day Keluarga Malaysia Aspiration.
PTP is 70 percent owned by MMC, a utilities and infrastructure group while the remaining 30 percent is held by APM Terminals (part of A.P.Moller-Maersk), a leading global ports group with a global port network in 74 countries.
MIDF Research expects MMC’s container throughput to recover in 2021, in line with the global growth recovery. MMC also owns Johor Port Northport, Penang Port and Tanjung Bruas.
MIDF Research said: “With Maersk, the largest container ship operator in the world, owning a 30 percent stake in Port of Tanjung Pelepas, we believe it will ensure that PTP will remain as its regional transshipment hub, ensuring sustainability of TEU’s volume.”
MIDF Research expects MMC to register a three percent growth year-on-year in TEUs in 2021, which will be driven by a 10 percent year-on-year recovery of container throughput and conventional cargoes for the group’s smaller ports including Penang Port and Johor Port in comparison to a contraction of 17 percent year-on-year in 2020.
Meanwhile, Northport ended 2021 on a high note with a record-breaking performance despite battling two perfect storms – the Covid-19 pandemic and the recent unprecedented flash floods.
Just as 2021 was drawing to a successful close, the second perfect storm hit the nation, and Port Klang in particular. On December 17 2021, continuous heavy rain which lasted for several days caused flash floods in several areas in the Klang Valley, the severity of which had not been experienced previously and Klang was among the badly affected districts.
Situated at Port Klang, Northport on December 30 2021 successfully hit a new record of an all-time high container volume in a year after the 3,305,765th container was discharged from the Interasia Horizon vessel, surpassing the previous record of 3,305,764 TEUs set in 2010. The 2021 throughput is 20.7 percent higher than the 2020 throughput.
According to Northport, the Covid-19 pandemic and implementation of lockdowns by many countries across the world in 2021 have had a significant impact on global economic activities and trade. The global supply chain was disrupted as major ports had either shut down operations or faced exceptionally long vessel delays.
Northport’s operations were not spared, initially, but the culmination of efforts to improve its operational efficiency and productivity had helped reduce the impact of the supply chain disruption.
CEO of Northport Datuk Azman Shah Mohd Yusof said in a recent statement, “We had embarked on the “Reinventing Northport” program since the takeover of Northport by MMC Corporation Bhd group in 2016, which included refocusing our strategy to become a local gateway and Intra-Asia hub, optimizing our operating costs, replacing aging equipment, enhancing our facilities and improving our services and productivity.
“This had led us to break our highest monthly container handling performance by recording 310,865 TEUs in December last year. We were making steady progress until the pandemic hit us hard.”
The major challenge for Northport’s operations came at the start of the year when the port experienced heavy congestion at its container yard due to high number of vessel calls, where the discharge of containers from the vessels was more than the loading operation.
As was the case with most ports, overstaying transshipment containers became a huge problem as other ports were either closed or facing heavy congestion.
Azman said: “Northport faced more than 250 vessel omissions in 2021 as shipping lines realigned their schedules and omitted port calls. The issue was further exacerbated when the movement of import and export containers by hauliers was affected by the implementation of lockdowns by the Malaysian government.
“The congestion at Northport’s container yard and gates had resulted in a lower productivity rate for its container operations, which then led to delays in vessel berthing.”
However, he said Northport was quick to respond to the issue with short, medium and long- term action plans to reduce the congestion. The measures were proven effective as the port’s operations recovered in less than one month.
“The ports and logistics industry players came together and did their part, aided by the government agencies, and led by Port Klang Authority, to bring some semblance of normalcy to Port Klang’s operations,” he added.
Overall, 2021 ranks as Northport’s best year ever with many notable achievements. Northport won the “Best Port Safety Management Award” from the Ministry of Transport on December 21 2021, a testament of commitment in maintaining a high standard of safety and health practices to protect employees and port users, particularly during the pandemic.
Azman said: “We are cautiously optimistic on the prospects of 2022 in the face of an uncertain economic outlook, with a new wave of Covid-19 brought about by the new Omicron variant already affecting many countries globally.
“Nevertheless, we will continue with the next phase of “Reinventing Northport” as we are expanding our yard capacity and buying new equipment to further boost our productivity and achieve more success in the years to come, in our transformational journey to be a Safer, Greener, Smarter and Better port.”
Good performance to continue into 2022
Meanwhile, Wee also said Port Klang has been recognized as having the most efficient operations among 22 of the world’s biggest and most prominent ports worldwide, handling an average of 131 ships weekly and taking just 1.7 days to service each vessel compared with 1.3 days from 2017 to 2019 before the pandemic occurred.
“This is quicker than our regional competitors at a time when 77 percent of ports, according to a Bloomberg report, were experiencing abnormally long times of turnaround,” Wee said in a Facebook posting in October last year.
Industry players and analysts expect the current outstanding performance of Malaysia’s ports to continue into 2022 in sync with the global economy recovery from the Covid-19 pandemic.
Syed Muhammed Kifni Syed Kamaruddin, an analyst at MIDF Research, said most of the container ports in Malaysia showed positive year-on-year throughput growth in 2021 and the positive momentum will continue into 2022. He expects a similar situation for the port sector in 2022 as the world’s economy continues to recover from the effect of the pandemic.