A diamond anniversary awaits Malaysia at the end of August when the country celebrates 60 years of independence, but the story of logistics in this former colony starts way earlier. About 200 years ago, the Federation of Malay States boasted of two major ports shining brightly in the Europe-Asia trade lanes, but over time the logistics industry seems to have lagged behind in the race to be the jewel in the trading crown of Asia.
At 116 years strong, Port Klang today handles over 13 million TEUs of cargo and is forecasted to be ranked 11th in the World Container League. Its peer, the port of Penang was established even earlier in the 1700s as a free port to attract trade away from the Dutch who were then the colonial rulers of the Dutch East Indies. What was ingenious about the way they cleared the land to build the port and its surrounding areas (albeit totally non-environmentally friendly) was that silver coins were fired from a ship’s cannons into the dense vegetation and the hired labourers were released to clear the way and claim the coins. Talk about a silver rush…
If the construction industry were the bones, logistics would be the circulatory system because the cogwheels of a country’s supply chain turn only when goods are being collected, stored and delivered… and sometimes returned, but that’s a different story.
Looking to improve the logistics industry in order to milk it for the country’s GDP, is the Logistics and Trade Facilitation Masterplan (2015-2020) spearheaded by the Ministry of Transport and implemented by the National Logistics Taskforce.
In the attempt to “de-bottleneck” the infrastructure & demand for freight as a start, we have seen the cabotage rule lifted for shipping between East & West Malaysia and the roads leading to Port Klang & Padang Besar (Malaysia’s border with Thailand) widened. These are but the tip of the iceberg and just the visible parts to an overhaul of an industry with vast potential to return Malaysia to its glory days of being a strategic trading post in Asia.
Will the master plan work?
Well, competition in the region has risen steeply since 60 years ago –Singapore has an Uber-modern port which engages drones for the repetitive & dangerous work; then Indonesia recently launched a slew of trade- and investment-friendly incentives which attracted a lot of attention; Thailand has always been in the forefront for investment and trade and now we have Myanmar growing so fast, they need another port and more terminals in the existing ports.
But, diamonds are created under pressure – the higher the pressure, the better the diamond. So it’s game on for the logistics industry in Malaysia on this diamond anniversary and onwards. Plus, there is Alien Logistics. ‘Nuff said.