Port Klang, strategically positioned and equipped with state of the art modern infrastructure, plays a very important role in the facilitation of imports, exports and transhipments for the Asian region. Under the ASEAN Economic Community (AEC), which envisions a free flow of goods among ASEAN member countries, an increase in competition among ASEAN ports is expected. As a result, cargo flow configuration might change in ASEAN.
Mr. Igwe Kingsley Onyekachi, from Malaysia University of Science and Technology (MUST), investigated the impact of AEC on cargo flows through Port Klang for his Master thesis. He presented his findings during his VIVA this month at MUST. The coming 10 years Port Klang will most likely maintain its rank as the second transhipment hub port (after Singapore) in ASEAN. However, according to Mr. Kingsley, intensive competition can be expected from emerging ports that are being developed in ASEAN, eating away from its contestable hinterland.
In particular, Pak Bara deep-sea port in Thailand is a port to watch due to its close proximity to Port Klang. The deep-sea port in Pak Bara is part of the landbridge project in southern Thailand to connect the eastern and western coasts of Thailand so that freighters from Europe can unload cargo in Pak Bara port (saving over 3,000 kilometres) without going to round the Strait of Malacca to arrive at ports in the Gulf and the South China Sea. It shares the same contestable hinterland on the northern peninsular Malaysia with southern Thailand and has a more competitive strategic location for ocean freight from/to India, Middle-east, Europe and Africa especially transhipment cargo which can be ferried by rail to/from China and the greater Mekong region. Other new port developments in planning are Dawei deep-sea port (Myanmar) and various new port developments and extensions in Indonesia (in particular Sumatra). These ports could become significant players in the transhipment business as well.
Mr. Kingsley proposes to strengthen the control of Port Klang's hinterland through improving intermodal and multimodal connectivity: rail-sea, road-sea and feedering services with Sumatra, Thailand, Brunei and India. Second, he proposes the development of mega distribution centres located in Port Klang, hereby locking in value added logistics activities in the port as well as its position as a key node in the trans ASEAN transport network.
Amongst others, the following policy recommendations were made in order to strengthen the competitive advantage of Port Klang:
Enhance investment policies for local and foreign investors in its port cluster;
Stimulate the development of a strong and complete industrial and logistics clusters in Port Klang;
Develop a comprehensive range of maritime ancillary services to strengthen its maritime supporting industry;
Stimulate innovations in and modernisation of the Malaysian transportation sector: trucking, rail and (short)sea;
Improve intermodal and multimodal connections with Southern Thailand, Myanmar and Sumatra.
In order to strengthen Port Klang in AEC over the coming year, it needs a continuous investment in and innovation of its port and its logistics cluster. This requires an intensive collaboration between Port Klang, its users, the logistics industry, government, universities and research institutes. This does not mean that the ball is in the court of the government. Both the government and private sector are each fully responsible in enhancing the competitive advantage and business for Port Klang as a hub port in ASEAN.