Latest news with #Nazery
New Straits Times
15-05-2025
- Business
- New Straits Times
Trade tensions may fuel Malaysia's port growth
Asila Jalil, Azanis Shahila Aman KUALA LUMPUR: The uncertainty surrounding US trade policy may hit global port activity but Malaysia stands to benefit from the diversion of trade especially those from China. Industry experts said cargoes that were initially US-bound may be redirected to Malaysia or other ports in Southeast Asia due to the tariffs on imported goods into the US. Maritime industry analyst Nazery Khalid said the tariff war is one of the biggest geopolitical developments that will lead to repercussions for many countries. He opined that the imposition of tariff by the US could backfire and adversely affect its economy as small and medium enterprises there bear the brunt of higher imports "What has happened is that products are piling up at US ports as their local importers from industries or companies refuse to pick up the cargos they have ordered because they have been slapped with higher tariffs. "What this will also lead to is diversion of trade. Cargoes that otherwise would have gone to the US will now shift to other regions because a lot of the things imported by the US are also needed elsewhere," he told Business Times. Notably, some ports in Malaysia are already seeing an increase in container throughput, including Sapangar Bay Container Port, said Nazery. "Sapangar Bay has seen an increase of 23 per cent in volume in March 2025 compared to March 2024. This shows that there is a pick up in volumes of intra-Asia trade arising from the diversion of cargo into this region," he added. Prior to the issues arising from the tariff war, Nazery said some local ports were faced with challenges such as bottlenecks along the supply chain, poor connectivity of ports or volatility in freight rates, among others. "This tariff war which results in recalibration of trade from the US to our region can be used as a time to improve efficiency, to beef up capacity and also for local and regional ports to leverage on the growing amount of cargo in this region," he said. LBB International chief executive officer Dr Marco Tieman said the tariffs are affecting the US and economies in the European Union due to their high debt levels. This is likely to affect trade volumes in the coming years. He said that there may be issues surrounding transshipment container volumes which will go down if both of the economies are not doing well. "Mid-term however, Malaysia might even benefit from more China trade flowing through Malaysia as well as increase in foreign direct investment from China where selected production from China might move to Malaysia. "Malaysia is providing value added logistics services, like repacking and light processing," he said. In the long term, Tieman said Malaysia will need to focus more on Asia as well as trade among Organisation of Islamic Cooperation countries. "There are opportunities for Malaysian ports to facilitate halal trade flows as a global hub," said Tieman. Meanwhile, Fitch Ratings said in a note that the overall impact of US tariffs on ports in Asia will be modest as they generally benefit from "take-or-pay" contracts and have lower exposure to the US. "Higher tariffs on China will benefit other Asian ports as US importers switch to suppliers in other countries and shippers reroute transshipments through other ports in the region. "Vietnam, India, Thailand, Indonesia and Malaysia could see an increase in intra-Asian trade and transshipment volumes, which could help offset the negative effects of a global economic slowdown," the firm said. On the global front, Fitch expects the impact on global port sector credit to be muted overall, due to various factors that mitigate the effects of volume and revenue pressures on port credit quality. Port ratings have been resilient to prior periods of volume declines, such as in 2023 when the US and European port volumes dropped 13 per cent and four per cent, respectively. The decline took place as consumer spending rotated to services from goods following the pandemic. "Revenues generally outperform volumes in weak economic years due to contractual revenue buffers, the presence of other stable revenues such as cruise fees, and rate flexibility," it said.
New Straits Times
11-05-2025
- Business
- New Straits Times
Malaysia's maritime sector not immune to tariff war
KUALA LUMPUR: Malaysia's maritime sector, including its ports, is not immune to the fallout from the tariff war, which can potentially deal a death blow to small companies if the cost of shipping cargo increases exorbitantly. Well-known maritime industry analyst Nazery Khalid said if the high tariffs are implemented after the 90-day pause, large importers may be able to absorb the extra costs, but smaller firms that lack liquidity risk financial ruin — potentially leaving goods stranded at ports. What this means is that accepting high-tariff consignments could jeopardise smaller companies financially, leading to cargo pile-ups and costly detention charges as well as further burdening ports and maritime supply chains, he said. There is deep concern as Port Klang and Port of Tanjung Pelepas, which are ranked among the world's 20 busiest container ports and deeply engaged in moving cargo globally, could face a business downturn. The escalating tension between economic superpowers the United States (US) and China arising from tit-for-tat tariffs has triggered negative ripple effects across the globe, severely affecting global maritime trade. And Malaysia, being a highly trade-dependent nation, cannot escape the repercussions from the hike in US tariff rate to 24 per cent. The shipping industry — already hit by COVID-19, volatile oil prices, and global tensions — is now grappling with rising shipping costs, port congestion, and a fragile supply chain. The tariffs could also disrupt long-established manufacturing networks, with smaller manufacturers potentially losing critical overseas suppliers due to financial strain. "Importers with deep pockets will pay the extra tariffs in addition to additional levies, but small companies without sizeable cash or liquidity will not pick up the goods and will leave them stranded at ports," Nazery told Bernama in an interview recently. "This will result in cargoes being taken back to the ports of origin by the exporters/suppliers, failing which they will just leave the goods at the ports of destination (and) this will cause the ports to slap costly detention charges to the importers, resulting in cargoes being stuck and eventually pile up at ports," he said. Nazery emphasised that this would burden the ports and cause strains along the maritime supply chains, and the stuck cargoes will take quite a while to clear. Once again, analysts said, the shipping industry finds itself in a situation that demands "all hands on deck." The tariff war is the most significant geopolitical development affecting the global economy, while the industry is still reeling from the heavy blow dealt by the COVID-19 pandemic, compounded by ongoing geopolitical tensions, volatile crude oil prices, and fluctuating freight rates. Adding to the strain are rising shipping costs, port and berth congestion driven by surging cargo volumes, and the lingering fragility of the global supply chain — all of which came sharply into focus not long ago. "Another repercussion from (US President Donald) Trump's move is severe disruptions to the established order of the manufacturing supply chains which take a long time to build and nurture," he said. Manufacturers face the looming threat of losing trusted suppliers from abroad as the former cannot withstand the financial crunch arising from having to pay much higher tariffs. "Although manufacturers tend to have multiple sources of suppliers in various locations, those without substitutes of suppliers who are as reliable and economically competitive as their established ones will stand to suffer the most," Nazery added. Trump' Reshoring Drive: Boon for Malaysia? Nazery said that US companies manufacturing abroad which are affected by the tariffs will not automatically embark on reshoring despite the rather protectionist measures undertaken by their government to safeguard their interests by imposing high tariffs on imports. "The established order of the global supply chain and well-entrenched global manufacturing ecosystem dictate that companies seek places with the lowest cost of production; abundant and cheap labour; closest proximity to raw materials, components and target markets; good trade infrastructure; and favourable legal or institutional regimes. "They will likely seek countries with lower tariff regimes instead of quickly relocating to the US," he added. He said this could give countries like Malaysia an opportunity to lure US manufacturing companies to Malaysia's shores with the various incentives and favourable conditions being offered. Westports Holdings Bhd reported that tariff rates among key global trading nations escalated to unprecedented levels following decades of globalisation and the resulting inflationary pressures could curtail consumers' purchasing power and consumption, elevating the risk of an economic slowdown or even a recession in major trading nations. Lower containerised trade could emerge as a near-term impact. However, regional trade realignment and Asia's economic dynamism could partially mitigate the downward pressure on container volume, the port operator said. "The interim uncertainties and adjustments may pause containerised trade growth, but a new equilibrium, Asia's economic dynamism and Malaysia's commitment towards multilateral trade will reestablish a new baseline for sustained future long-term growth. "We are keeping our guidance which we provided at the beginning of the year, which is low single-digit growth. We think it is too premature to make a change now. If there is a need, we will do so later," the company said. Suria Capital Holdings Bhd managing director Datuk Ng Kiat Ming said the company's subsidiary, Sabah Ports Sdn Bhd, continues to monitor the recent implementation of US tariffs and its potential impact on regional trade flows. As of now, he said, Sapangar Bay Container Port (SBCP) has not experienced any negative effects from the tariffs and the port has actually recorded a positive performance in the first quarter of 2025, with throughput volume rising 11 per cent year-on-year for the January-to-March period. "Notably, March 2025 saw a 23 per cent increase in volume compared to the same month last year, reflecting a healthy surge in regional shipping activity and a strong start to the year. This growth is largely driven by intra-Asia trade and the increasing presence of regional shipping lines calling at SBCP," he said when contacted.
The Sun
11-05-2025
- Business
- The Sun
Maritime sector not immune to tarrif war, small firms at risk
KUALA LUMPUR: Malaysia's maritime sector, including its ports, is not immune to the fallout from the tariff war, which can potentially deal a death blow to small companies if the cost of shipping cargo increases exorbitantly. Well-known maritime industry analyst Nazery Khalid said if the high tariffs are implemented after the 90-day pause, large importers may be able to absorb the extra costs, but smaller firms that lack liquidity risk financial ruin — potentially leaving goods stranded at ports. What this means is that accepting high-tariff consignments could jeopardise smaller companies financially, leading to cargo pile-ups and costly detention charges as well as further burdening ports and maritime supply chains, he said. There is deep concern as Port Klang and Port of Tanjung Pelepas, which are ranked among the world's 20 busiest container ports and deeply engaged in moving cargo globally, could face a business downturn. The escalating tension between economic superpowers the United States (US) and China arising from tit-for-tat tariffs has triggered negative ripple effects across the globe, severely affecting global maritime trade. And Malaysia, being a highly trade-dependent nation, cannot escape the repercussions from the hike in US tariff rate to 24 per cent. The shipping industry — already hit by COVID-19, volatile oil prices, and global tensions — is now grappling with rising shipping costs, port congestion, and a fragile supply chain. The tariffs could also disrupt long-established manufacturing networks, with smaller manufacturers potentially losing critical overseas suppliers due to financial strain. 'Importers with deep pockets will pay the extra tariffs in addition to additional levies, but small companies without sizeable cash or liquidity will not pick up the goods and will leave them stranded at ports,' Nazery told Bernama in an interview recently. 'This will result in cargoes being taken back to the ports of origin by the exporters/suppliers, failing which they will just leave the goods at the ports of destination (and) this will cause the ports to slap costly detention charges to the importers, resulting in cargoes being stuck and eventually pile up at ports,' he said. Nazery emphasised that this would burden the ports and cause strains along the maritime supply chains, and the stuck cargoes will take quite a while to clear. Once again, analysts said, the shipping industry finds itself in a situation that demands 'all hands on deck.' The tariff war is the most significant geopolitical development affecting the global economy, while the industry is still reeling from the heavy blow dealt by the COVID-19 pandemic, compounded by ongoing geopolitical tensions, volatile crude oil prices, and fluctuating freight rates. Adding to the strain are rising shipping costs, port and berth congestion driven by surging cargo volumes, and the lingering fragility of the global supply chain — all of which came sharply into focus not long ago. 'Another repercussion from (US President Donald) Trump's move is severe disruptions to the established order of the manufacturing supply chains which take a long time to build and nurture,' he said. Manufacturers face the looming threat of losing trusted suppliers from abroad as the former cannot withstand the financial crunch arising from having to pay much higher tariffs. 'Although manufacturers tend to have multiple sources of suppliers in various locations, those without substitutes of suppliers who are as reliable and economically competitive as their established ones will stand to suffer the most,' Nazery added. Trump's Reshoring Drive: Boon for Malaysia? Nazery said that US companies manufacturing abroad which are affected by the tariffs will not automatically embark on reshoring despite the rather protectionist measures undertaken by their government to safeguard their interests by imposing high tariffs on imports. 'The established order of the global supply chain and well-entrenched global manufacturing ecosystem dictate that companies seek places with the lowest cost of production; abundant and cheap labour; closest proximity to raw materials, components and target markets; good trade infrastructure; and favourable legal or institutional regimes. 'They will likely seek countries with lower tariff regimes instead of quickly relocating to the US,' he added. He said this could give countries like Malaysia an opportunity to lure US manufacturing companies to Malaysia's shores with the various incentives and favourable conditions being offered. Westports Holdings Bhd reported that tariff rates among key global trading nations escalated to unprecedented levels following decades of globalisation and the resulting inflationary pressures could curtail consumers' purchasing power and consumption, elevating the risk of an economic slowdown or even a recession in major trading nations. Lower containerised trade could emerge as a near-term impact. However, regional trade realignment and Asia's economic dynamism could partially mitigate the downward pressure on container volume, the port operator said. 'The interim uncertainties and adjustments may pause containerised trade growth, but a new equilibrium, Asia's economic dynamism and Malaysia's commitment towards multilateral trade will reestablish a new baseline for sustained future long-term growth. 'We are keeping our guidance which we provided at the beginning of the year, which is low single-digit growth. We think it is too premature to make a change now. If there is a need, we will do so later,' the company said. Suria Capital Holdings Bhd managing director Datuk Ng Kiat Ming said the company's subsidiary, Sabah Ports Sdn Bhd, continues to monitor the recent implementation of US tariffs and its potential impact on regional trade flows. As of now, he said, Sapangar Bay Container Port (SBCP) has not experienced any negative effects from the tariffs and the port has actually recorded a positive performance in the first quarter of 2025, with throughput volume rising 11 per cent year-on-year for the January-to-March period. 'Notably, March 2025 saw a 23 per cent increase in volume compared to the same month last year, reflecting a healthy surge in regional shipping activity and a strong start to the year. This growth is largely driven by intra-Asia trade and the increasing presence of regional shipping lines calling at SBCP,' he said when contacted.
