Transportation, Storage And Communication
Transportation, storage and communication services contributed 8.5% Malaysia’s GDP in 2005 (Chang, 2012). In order to provide more focus on logistics sector, the Government has set up the Malaysia Logistics Council (MLC) in February 2007. This effort is to ensure there is as a focal point for coordination of all the strategies, policies, regulations and rules of the logistics sector. There are more than 22,000 companies involved in the logistics industry in Malaysia at the moment in multiple areas of activities to enhance this industry (Chang, 2012).
Furthermore, it is forecast to grow at a compound annual growth rate (CAGR) of 12.6 per cent and expected to reach RM196.5 billion in 2015 (Chang, 2012). This is the result of activities of import and export, forwarding, shipping, airfreight, high technology and capital intensives project and business planned for the 10th Malaysia Plan and Economic Transformation Program (ETP). The intention is to acts as a catalyst in creating opportunities for Malaysia’s logistics market. Foreign direct investments are likely to flow into the electronics and electrical, oil and gas, healthcare and solar-related industries. Gopal (2012) reported in Malaysia Logistic Directory 2012/2013 (16th Edition) reported that Malaysia’s advantage is due to its strategic location and focus on improving supply-chain efficiency which will also drive growth in the logistics industry. He added that the logistics industry is poised to enjoy double-digit growth with a projected compounded annual growth rate of 11.6% to reach a staggering RM203.71 billion in 2016 in Malaysia. The growth of external trade would spur growth of the transportation and logistics industry, especially for import and export forwarding, air freight and ocean freight related businesses. Total trade for the first 11 months in 2011 was valued at RM1.156 trillion, up 8.7% from the corresponding period in 2010. Exports rose by 9% to RM633.81 billion while imports expanded by 8.4% to RM521.81 billion, resulting in a trade surplus of RM112 billion during that same period.
In terms of cargo volumes, total cargo volume is expected to increase. In 2011, sea freight was the most popular mode of transport for cargoes in Malaysia, handling more than 90% of total freight traffic. Port Klang and Port of Tanjong Pelepas contributed 39.2% and 22.7% of total sea throughput in 2011, respectively. The quality and availability of trade-related infrastructure such as roads, railways and ports play important roles in the logistics performance in Malaysia. Similarly, efficient border management and coordination of transportation agencies involved at the border clearance are critical in supporting the growth.
Table 2.5: Number of Logistics Business Establishment in Malaysia
Logistics Sub Segments Number of Business Establishments
Road Freight Transport 1,898
Sea Freight Transport 306
Air Freight Transport 8
Towing and Pushing Services (Sea Ports) 37
Support Activities for Transportation 41
Courier Services 184
Note: Number of Business Establishments supporting logistics business in Malaysia
Adapted from Malaysia Logistic Directory 2012/13 (16th Edition) by Marshall Cavendish Business Information (Member of Times Publishing Group)
Prior to the liberalization of the container haulage industry, there were only five operators which resulted in insufficient capacity that cause port congestion and delays in delivery of containers to their destinations. This prompted Malaysia government to introduce polices to liberalize the haulage industry. The resulting competition is expected to bring about service rationalization, reduction in delays and rate adjustments thereby benefiting containers users as well as encouraging greater containerization in the future. Table 2.5 from statistic department reported there are 2474 business entities which are supporting the logistics business in Malaysia.
2.3.4 Cargo Statistic in Malaysia
Figure 2.6 and 2.8 shows the growth of export in Malaysia and it continues to grow year by year except in 2009 where worldwide economy downturn affected the growth in airports sector. Handling of containers at seaport is very consistent (Figure 2.7). As for cargoes handled in the airport sector, international cargo continues to grow from 2001 to 2006 at a peak of 861,709 metric tons and decline for 3 years after that due to economic downturn. The volume of the airport sector increases again after 2009. Figure 2.8 shows the comparison of different sectors and transportation using air mode. The road sector is not reported here as eventually all the incoming or outgoing cargoes will have to use road transportation to the seaport, airport and also railway. In Malaysia the road transportation handled more than 1,400,000 tons metric a year if we take the combination of all the sectors volumes using road transportation before arriving at the ports as shown in Figure 2.9. It can be concluded that the risk of cargo movements on the road is extremely high and organization should implement good security control measures to ensure their cargo is secured while on the road en-route to their destination.