PETALING JAYA: Manufacturers and exporters were caught in a race against time after the US tariff deadline on Aug 1 for Chinese goods had passed.

The region experienced a surge in shipping traffic when the US Trade Representative’s office announced that increased tariffs on a range of Chinese imports, such as electric vehicles, computer chips, and medical products, would come into effect on that date.

The Federation of Malaysian Manufacturers (FMM) reported that since April, vessels have taken an average of three to five days to berth in these ports due to high yard density, with feedback from members indicating a growing sense of urgency to resolve the issue.

A key factor in the delays, said FMM president Tan Sri Soh Tian Lai, was Singapore’s port congestion, with ships waiting up to five days to berth.

He added that this led to some ships diverting to Malaysian ports, which exacerbated the congestion here.

“The impact of these delays is multifaceted, leading to punitive detention and demurrage charges for businesses as containers and storage exceed the ‘free period’ allowed by shipping lines and terminal operators,” he said when contacted.

The FMM, whose members import raw materials, intermediary goods and machinery parts, as well as export semi-finished and finished products, is calling for immediate support.

They want shipping companies to grant additional free days for detention and demurrage, and for terminal operators to extend the free storage period to better accommodate shippers’ planning needs.

Congestion can occur in two ways. The first relates to vessels arriving at ports like Singapore only to find no available berths.

Due to full capacity at the docks, ships must wait at the anchorage, unable to offload or unload cargo. This berthing congestion represents just one part of the gridlock facing the shipping industry.

The second aspect of congestion concerns landside operations at the ports, specifically at the container yard (CY) when importers or exporters attempt to collect or deposit containers. The congestion at the CY can lead to significant delays in moving cargo in or out of the port facility.

Shipping Association Malaysia chairman Ooi Lean Hin said the congestion at Malaysian ports was caused by the situation in the Red Sea as well as the US government’s import tariffs on goods from China.

“So much of the capacity and containers have been allocated to the trade between China and the US.

“This shift disrupts the rest of the world because capacity is being redirected to service the US market,” he said, adding the reallocation had caused excess cargo volumes to be “dumped” into transit hubs like Singapore and Port Klang – leading to a bottleneck that affected yard capacity and disrupts key port operations.

Ooi, however, said this bottleneck is expected to be short-lived.

The situation should normalise post-August as ports increase their resources to expedite the clearance of ships, he said, adding that calls by Malaysian shipping companies that they be given priority at the ports could safeguard the country’s supply chain.

While acknowledging that traffic has eased significantly since the onset of August, the Malaysia Shipowners’ Association said vessels en route to Singapore and Port Klang had experienced significant delays of five to seven days in the last two months.

“The situation in Singapore and Port Klang is easing off, but challenges remain at other ports such as Kota Kinabalu and Bintulu due to a combination of factors including weather conditions, infrastructure limitations and productivity issues.

“Last month, the congestion in Kota Kinabalu was so severe that ships waited for more than seven days,” a statement from the association read.

Federation of Malaysian Freight Forwarders president Datuk Tony Chia Han Teun said the situation has been improving since July 24.

There has been a significant decrease in berthing delays, with Westport expecting a 17-hour wait and Northport seeing a 12 to 18-hour hold-up, he said.

“We’re navigating through a crisis but the situation is looking up. We’re optimistic that by the end of this month, things will have significantly improved,” he said, adding that Malaysian ports have experienced an unexpected boom due to diverted ship calls.

This advantage, however, is temporary, as the influx of containers from these diverted vessels consists primarily of transhipment cargo rather than local imports.

While Malaysian ports can accommodate the additional cargo, Chia said handling of the extra load should not disrupt local import and export activities.

https://www.thestar.com.my/news/nation/2024/08/06/help-deal-with-congestion