FMM urges clarity, dialogue on port tariff hike

KUALA LUMPUR: The Federation of Malaysian Manufacturing (FMM) remains concerned that the scale and timing of the recent port tariff hikes without detailed cost disclosures or comprehensive stakeholder consultation may place an undue burden on industry.
In response to the explanations provided by the Port Klang Authority (PKA) in its press statement dated June 16, 2025, FMM said given the wide-ranging implications for trade, investment and the cost of doing business, it believes the rationale for the revision warrants further scrutiny.
"FMM fully respects the right of all stakeholders, including PKA, to present and defend their positions. Constructive dialogue is essential to national development.
"However, given the wide-ranging implications of this tariff hike, especially amid broader cost escalations and global uncertainties, we believe it is time to move beyond justification and toward pragmatic resolution," said FMM president Tan Seri Datuk Soh Thian Lai.
Soh said the federation disagrees on PKA points that Port Klang's tariff rates will remain among the most competitive in the region.
While Port Klang's official handling tariff of RM390 (approximately US$92 per TEU) may appear lower on paper, he said this figure does not reflect the actual cost borne by Malaysian shippers.
"Terminal Handling Charges (THC) are not billed directly by port operators to shippers; instead, they are imposed by shipping lines, often with significant mark-ups.
"Current publicly available rates by shipping lines show that Malaysian shippers are already paying an average of RM480 per 20-foot container, well above the existing RM300 port handling charge.
"Increasing the tariff to RM390 without structural reform will effectively give shipping lines the latitude to raise THC further, potentially reaching the real-world cost range of US$120 to 130 per TEU," he said.
Meanwhile, Soh pointed out that port operators face cost pressures like other industries, but it questions whether the proposed tariff hike is truly warranted given current financial and regulatory contexts.
Under existing concession agreements, the costs associated with port development and infrastructure are contractually required to be fully borne by port operators, he said.
As for the PKA's claims that relative to other increases, port charges are a small fraction of the total cost that consumers will ultimately bear indirectly, FMM disagrees with the narrow framing of cost impact based solely on per-kilogram increments.
While PKA's micro-level calculation may appear negligible, he said it overlooks the broader and more significant issue, such as the cumulative cost burden placed on Malaysian exporters, importers and manufacturers.
"PKA's analysis fails to acknowledge that logistics costs are already among the highest contributors to the cost of doing business in Malaysia.
"The impact of a 30 per percent increase in container handling charges and a 200–243 per cent hike in storage charges cannot be minimised by simplistic per-unit cost metrics.
"FMM reiterates that the evaluation of port tariff adjustments must be done holistically, accounting for their multiplier effect across the supply chain and national economy," he said.
In addition, Soh said FMM reiterates that claims of "modest" increases are not supported by the quantum of the adjustments, which are among the steepest seen in recent memory.
Without detailed, he said, transparent cost justifications, these increases will be viewed as revenue maximisation at the expense of trade facilitation.
"Maintaining investor confidence and trade momentum requires a holistic approach where competitiveness is grounded in predictable pricing, stakeholder consultation and a transparent cost-recovery framework.
"FMM urges the authorities to defer the hike and engage the industry in reassessing a sustainable, accountable tariff structure aligned with national economic goals," he added.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Barnama

5 hours ago

• Barnama

OPEC+ Oil Production Hike Justified By Iran-Israel Conflict

ST. PETERSBURG, June 21 (Bernama-Sputnik/RIA Novosti) -- The decision of the OPEC+ group of major oil exporters to boost production is far-sighted and reasonable given the ongoing Iran-Israel conflict, Russian oil giant Rosneft CEO Igor Sechin said on Saturday, reported Sputnik/RIA Novosti. "The decision taken by OPEC+ leaders to boost production seems very far-sighted at the moment, and from the market's point of view, even reasonable, given the interests of consumers and the uncertainty about the scale of the Iran-Israel conflict," Sechin said in a keynote address at the 2025 St. Petersburg International Economic Forum's (SPIEF) Energy Panel. Despite the increase in OPEC+ production, an oil glut is unlikely in the long term because world reserves are at their lowest in five years, Sechin said. bootstrap slideshow "Despite the announced production increase, there are no signs of any surplus oil glutting the market in the long term. Global oil reserves are now at their lowest levels in the last five years," Sechin added. Eight OPEC+ countries — Russia, Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman — have voluntary obligations additional to quotas. Production limits of 1.65 million barrels per day (bpd) are in effect until the end of 2026. An additional 2.2 million bpd cut has been gradually phased out starting April. Starting in May, OPEC+ agreed to accelerate the withdrawal from these restrictions: since May, they have produced 411,000 bpd more than in April. Production will also increase by 411,000 bpd in June and July. The Russian city of St Petersburg is hosting the 28th edition of SPIEF from June 18-21 under the theme of "Shared Values: The Foundation of Growth in a Multipolar World." The Rossiya Segodnya international media group, RIA Novosti's parent company, is the forum's information partner. Rosneft has put an oil price of US$45 per barrel down in its business plan for 2025, and US$42-43 for the next year, CEO Igor Sechin said on Saturday. "We do not know what geopolitical factors will affect the market. Yet whatever it may be, our company Rosneft has the price of US$45 per barrel written down in its business plan for this year, and US$42-43 per barrel for next year. We do not want to depend on this volatility," Sechin said.

New Straits Times

6 hours ago

• New Straits Times

Malaysia exploring new palm oil markets amidst geopolitical conflicts

KOTA BARU: The government is exploring new markets for Malaysia's palm oil in an effort to reduce the nation's reliance on major exporting markets affected by geopolitical conflicts. Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said the ongoing Israel-Iran crisis and the Russia-Ukraine conflict have disrupted export shipments to certain zones. "Malaysia currently exports goods worth RM186 billion annually to global markets, including palm oil, but part of these markets are now considered high-risk due to armed conflicts. "As such, we are exploring new markets, namely, countries that have yet to purchase Malaysian palm oil or cooking oil. "This is crucial to ensure that our export levels remain stable," he said, adding that the country is currently trading with nearly 80 nations, with plans to expand its reach even further. Speaking to reporters after attending the 'Dialogue with KPK' programme at the Mara Poly-Tech College, Kota Baru here today, the minister also urged plantation operators and smallholders to work closely with the government to ensure the resilience of the national commodities sector on the global stage. He said planters and operators must work with the government to address challenges at the international level. "The European market is increasingly emphasising environmental sustainability and biodiversity-friendly practices in palm oil procurement. "To enter their markets, we must prove that our plantations meet their standards, comply with sustainability principles and preserve biodiversity," he said. Johari said that providing good service and meeting buyer requirements should be a priority to help turn new buyers into long-term customers. "We are asking them to buy more from us, but the service we provide is just as important," he said. — Bernama

Borneo Post

8 hours ago

• Borneo Post

M'sian manufacturing body urges govt support for automation, job redesign to tackle labour shortage

Soh says while manufacturers are investing heavily in automation and digitalisation, these transitions require capital, time and skilled talents, which remain in short supply. KUCHING (June 21): The Federation of Malaysian Manufacturing (FMM) has suggested the government introduce targeted incentives for automation and support for job redesign to maintain manufacturing as a competitive and inclusive sector. According to FMM president Tan Sri Soh Thian Lai, while manufacturers are investing heavily in automation and digitalisation, these transitions require capital, time and skilled talents, which remain in short supply. He said the latest Department of Statistics Malaysia (DoSM) data had confirmed that manufacturing wages in Malaysia were rising steadily and surpassing national averages. 'Employers in the sector remain committed to offering fair and competitive compensation, but urgent support is needed to address persistent labour shortage. 'The reliance on foreign workers stems from a shortage of willing and skilled local workers, not from any strategy to suppress wages. 'A balanced, data-driven and skills-based human capital strategy is crucial for us to remain competitive and inclusive,' he said in a statement, issued in response to DoSM's Monthly Manufacturing Statistics, which indicated that the average salary in the manufacturing sector rose to RM3,460 per month in April this year, reflecting a 1.2 per cent year-on-year increase. In comparison, the average monthly salary across all formal sectors stood at RM3,441 in the fourth quarter of last year, highlighting that manufacturing wages continued to outperform the national average, Soh pointed out. Additionally, he said total wages paid in the manufacturing sector climbed to RM8.31 billion in April 2025, marking a 2.4 per cent year-on-year increase. He added that the median wage across all formal sectors was recorded at RM3,045, while manufacturing median wages ranged between RM2,764 and RM3,052, well above the national minimum wage of RM1,700. 'FMM acknowledges that the data clearly demonstrates manufacturing wages in Malaysia are not only competitive, but are continuing to rise steadily. This affirms that employers in the sector are offering fair compensation, and it also counters the claim of the workers being underpaid. 'Despite competitive wage levels, the manufacturing sector continues to grapple with acute labour shortages, especially in 3D (dirty, dangerous, and difficult) job categories.' He emphasised again that the local workers were not being displaced by cheaper foreign labour, adding that hiring foreign workers involved considerable costs and regulatory compliance. 'Furthermore, even when wages offered exceed the national minimum wage, many of these roles remain unattractive to the local job-seekers.' As such, he recommended the government to expand technical and vocational education and training (TVET) programmes and industry-led training initiatives to the manufacturing sector and strengthen them, as well as to formalise informal workers and improve the enforcement of wage-related regulations. 'The government should also establish tripartite labour planning councils for collaborative workforce strategies. 'We reiterate our support for a voluntary, productivity-linked Progressive Wage Policy (PWP) that encourages wage growth aligned with skills enhancement and measurable performance, rather than arbitrary increases. 'A business-friendly and voluntary PWP, grounded in clear performance metrics, would gain manufacturers' support and ensure that wage increases are sustainable and linked to worker capability,' added Soh.