Ports, logistics sector brace for cost impact of US tariff

New Straits Times

2 days ago

KUALA LUMPUR: A steeper 19 per cent United States tariff on Malaysian goods, compared with 10 per cent for Singapore, could raise export costs and slow the movement of certain commodities through Malaysia's trade routes, industry players said.
Port Klang Authority general manager Captain K. Subramaniam said the higher tariff may place added cost pressures on exporters and reduce trade volumes for commodities routed via Malaysia.
However, he said the overall impact on Port Klang's competitiveness is expected to be measured, as the port primarily serves as a transshipment and regional hub rather than a major exporter of US-bound cargo.
"Port Klang expects to remain buoyant on the back of strong intra-Asia trade and robust shipping connectivity.
"Its competitiveness is anchored not only in tariff considerations but also in its strategic location, cost-efficiency, growing terminal capacity, and comprehensive logistics support," he told Business Times.
To retain and grow transshipment volumes, he said Malaysia, particularly Port Klang, is focusing on several key strategies to enhance efficiency and competitiveness.
He added that ongoing terminal upgrades and future expansions, including the Westports 2 development, are aimed at increasing capacity and improving turnaround times.
The longer-term port capacity expansion plan also includes the Carey Island Port project to cater for future growth.
Additionally, Subramaniam said that in terms of digitalisation and trade facilitation, terminal systems are constantly upgraded, adopting the latest digital technologies to ensure speedy and secure data transfer for more efficient supply chain management.
On cost competitiveness, he said ports in Malaysia offer top-notch port, logistics, and value-added services at competitive rates, appealing to global shipping lines and logistics companies.
Meanwhile, Federation of Malaysian Freight Forwarders president Datuk Dr Tony Chia Han Teun said the recent tariff changes announced by the US raise significant concerns for Malaysia's trade competitiveness and the logistics sector.
He added that this differential could potentially divert transshipment and direct export volumes from Malaysian ports to Singapore, especially for high-value goods where even a few percentage points make a commercial difference.
"Malaysia has long served as a strategic hub in regional supply chains, and any tariff disadvantage may encourage multinationals and logistics planners to reroute cargo flows.
"This could impact not only our port throughput but also the broader ecosystem, including freight forwarding, warehousing, and value-added logistics services," he said.
Chia urged the relevant authorities to engage in dialogue with their US counterparts to clarify the rationale behind the tariff differential and explore avenues for mitigation.
"At the same time, we must intensify efforts to enhance port efficiency, reduce last-mile costs, and leverage free trade agreements to maintain Malaysia's position as a competitive and attractive logistics gateway in Asean," he added.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the newly imposed 19 per cent tariff on Malaysian exports to the US is reasonable and will not threaten the country's competitiveness.
He added that although Malaysia had hoped for a lower tariff rate, the outcome of the negotiations was fair, as it was achieved without compromising the nation's core policies or sovereignty.