The pressing need for digitalization plus the shut-in effects of the current global pandemic mean it is now time to relook the country’s shipping strategy.By Rachael Philip, Malaysia correspondent, Maritime Fairtrade
The Malaysian Shipping Masterplan (MSM) 2017-2022 was launched four years ago. Then, it was a much-needed formula created to revitalize the local shipping industry, helping it to remain competitive in regional and global markets.
Mid-way in the five-year timeframe, the global COVID-19 pandemic struck. The country, fighting its toughest crisis yet, is currently under a lockdown, one of three introduced since early last year. During this time, Malaysia’s shipping industry has had to grapple with disruptions of size and intensity never experienced before.
Port congestions, container crisis and sky-high shipping prices have plagued the local maritime industry for almost a year now. Considering this, is the MSM still valid?
“The MSM was formulated at a time when the shipping landscape was very much different from what it is today. The pandemic triggered seismic changes affecting the industry. As such, the MSM is ripe for a review. The targets and objectives set five years ago may no longer be realistic or attainable under the current circumstances,” said Nazery Khalid at the Fostering Maritime Industry Operation and Management through Digitization Post-Covid 19 conference (June 28 to July 2), organized by the Maritime Institute of Malaysia, which was attended by Maritime Fairtrade.
Nazery, a maritime commentator, scholar and former analyst, explained in an email reply to Maritime Fairtrade that there is little in the existing master plan in terms of incentives provided to the maritime industry to prepare for Industrial Revolution (IR) 4.0 in areas such as acquiring technologies and assets, building human capital and undertaking R&D to move up the digital value chain.
“The MSM 2017-2022 and the Malaysian Shipbuilding and Ship Repair Industry Strategic Plan 2020 did not set any specific and measurable targets towards IR 4.0 readiness and digital transformation despite acknowledging the importance of having skilled human capital to enhance competitiveness.”
Going forward, marine industry stakeholders must traverse this path or risk being left behind by other industries in attracting investment, and in improving productivity, efficiency, customer experience and cost, he said.
Surviving the pandemic
However, Nazery stressed that foremost on the minds of maritime industry players today is survival.
“Adapting to IR 4.0 is not on the agenda of those who are struggling to stay afloat amid these trying economic conditions.”
He said the maritime community, especially seafarers, can draw precious little cheer from the government’s PEMULIH stimulus package worth RM150 billion (US$35 billion) announced on June 28 2021.
“There is no specific initiative to assist seafarers who are facing acute hardship from loss of income and mental anguish from being denied shore leave. Small shipyards are suffering from the lack of orders while shipowners are facing the prospect of defaulting their ship financing loans owing to force majeure arising from the pandemic.
“Industry players would be hoping that the Wage Subsidy Program under the PEMULIH package and the blanket loan moratorium to borrowers be extended to affected SMEs in the maritime industry too. They would hope for targeted assistance from the government under the third phase of the National Recovery Plan as extended to the tourism and creative industries.
“Companies told not to operate under the current Movement Control Order are in dire need for cash injection to pay workers, vendors and overheads, and to sustain operations. Such companies would not be in a position to gear up for IR 4.0.”
Opportunities for growth
Despite the setbacks brought on by the pandemic, Nazery pointed out that there are opportunities the industry can capitalize on.
“Malaysia is located along the busy sea lanes of the Straits of Malacca and South China Sea. We have excellent maritime infrastructures such as seaports and shipyards. We can leverage on these strengths to reap opportunities presented by the current situation.
“For example, we can tap into the steadily increasing shipping traffic to lure ships traversing the Straits of Malacca to our ports with value-adding logistics services, and to our shipyards to provide ships with repair services.
“We could also extend assistance to seafarers who have been facing difficulties obtaining shore leave and repatriation to their home countries owing to pandemic-curbing restrictions. We can provide relieve by offering vaccination, medical services and protective equipment to seafarers on vessels anchored in our waters and help facilitate their repatriation.
“By extending assistance to seafarers and also to shipowners, Malaysia would do well to project leadership and empathy to these unsung heroes of world trade in these challenging times, and live up to its membership in the IMO’s august council.”