Business at Port Klang, Malaysia’s main shipping hub, has taken a hit after major shipping companies shifted their operations to Singapore under new alliance agreements, The Straits Times reported.
The Singapore daily said in its report that the biggest impact of the new alliance agreement has so far been the loss of transshipment volumes from giants United Arab Shipping Company (UASC) and France’s CMA CGM. Furthermore, the Ocean Alliance, which includes China’s Cosco Shipping, shifted from Klang to PSA Singapore’s terminal in April.
Port Klang is potentially losing out on up to 2 million TEU annually, the paper said.
The dip in performance at Port Klang has also ignited concern over Malaysia’s plans to aggressively build new harbours and rail links along the Strait of Malacca. As many of these plans are partnerships with China, there is now concern of oversupply due to plans for new China-backed megaports like a RM43 billion one at Melaka Gateway, and a RM200 billion one at Carey Island
According to The Straits Times, government and industry sources said that “Chinese companies earmarked to take a stake in these two projects have had reservations over their viability. The planned port for Carey Island now has an Indian partner, with its mooted valued halved to RM100 billion.”