Newly-appointed chairman of Malaysian Shipowners’ Association (MASA) Mohamed Safwan Othman has laid down plans to take the country’s shipping industry to greater heights. Mohamed Safwan said, most importantly, he will ensure that the association, which is established in 1976, will continue to protect the local genuine vessel owners especially in issues such as the cabotage policy.
A cabotage policy governs the transport and shipping of goods or passengers between two places along coastal routes in the same country by a transport operator from another country.
“We need to strengthen the cabotage policy and make sure that priority is given to the genuine Malaysian-flagged vessels. The cabotage policy is critical for protecting the local shipping industry,” he told Maritime Fairtrade.
According to Mohamed Safwan, he also plans to increase the tonnage of Malaysian-flagged vessels and will discuss the targeted tonnage with the Malaysia’s Ministry of Transport. “MASA will review the target together with the Ministry of Transport this year,” he said. The current tonnage of the Malaysian-flagged vessels is about 6.5 million, according to the UNCTAD’s Review of Maritime Transport 2021.
MASA’s main objective is to protect and promote the interest of Malaysian shipowners. Being the only national industry organization representing shipowners in the country, the association has a central role to play in the development of the shipping industry in Malaysia. MASA has taken this role seriously and often played key roles in highlighting issues aimed at enhancing and strengthening the development of national shipping industry.
Mohamed Safwan said he will also ensure that MASA plays its role in increasing the participation of the Malaysian-flagged vessels in key categories such as bulk carriers, palm oil carriers and specialized chemical tankers.
Opportunity in sustainable energy industry
Mohamed Safwan pointed out that Malaysia’s shipping industry is moving in the right direction with the prioritization of the Malaysian-flagged vessels in the local economy.
“There are ample opportunities for the shipping industry to expand in the sustainable energy areas together with Malaysia’s government-linked companies. Most of the local shipowners have embarked on their journeys to comply with the Environmental, Social, and Governance (ESG)’s requirements.”
The agreed objective of the International Maritime Organization (IMO) is “to reduce the total annual greenhouse gas (GHG) emissions by at least 50 percent by 2050 compared to 2008” as part of the “Initial IMO Strategy on reduction of greenhouse gas emissions from ships”.
IMO estimates that shipping, which plays an important role in transporting 90 percent of all world trade, is responsible for two to three percent of all GHG emissions annually.
Malaysia has the right environment to tap into this opportunity. Mohamed Safwan said that the country has stringent shipping standard compared to some other ASEAN countries. According to UNCTAD’s Review of Maritime Transport 2021, Malaysia is ranked third among ASEAN countries in terms of ship-owning economies, and by carrying capacity in dead-weight tons.
“Many of the shipowners in Malaysia are dealing with international companies in various segments including the oil and gas. Thus, Malaysia’s shipping standard of operating is very high and established,” he said.
Mohamed Safwan also said that there is currently a shortage of Malaysian-flagged bulk carriers in the oil and gas sector. “Malaysia needs about 400 shipments per year in order to support the power generation sector in Malaysia. The country does not have enough bulk carriers to handle this,” he added.
Hence, Mohamed Safwan who is also the president and group managing director of Dinastia Jati said that the company intends to purchase one or two bulk carriers in the next three years. “We plan to acquire at least one bulk carrier in the second half of this year. The company does not own any bulk carrier at the moment,” he said.