Sabah manufacturers say ports in ‘paralysis’, could drive up prices and cost jobs if prolonged

“KOTA KINABALU, May 8 — The Federation of Malaysian Manufacturing (FMM) Sabah Branch has slammed the worsening congestion at Sabah ports, describing the prolonged disruption as a man-made logistical crisis that is crippling the state’s industrial competitiveness and pushing businesses towards collapse. FMM Sabah chairman Liaw Hen Kong said port operations in the state had reached a “state of paralysis”, with severe disruptions to container trucking, frequent vessel omissions, massive container rollovers and prolonged delays in gate-in and gate-out activities becoming the “new normal”. “What is truly infuriating is that feeder operators have announced a ‘Congestion Surcharge’ and ‘General Rate Increase (GRI)’ effective May 7, citing the port’s failure to clear the backlog,” he said in a statement on Thursday. Under the surcharge, carrier-owned container shipments to and from Kota Kinabalu will see increases of RM500 for a 20-footer and RM1,000 for a 40-footer, while shipper-owned containers will incur charges of US$130 for a 20-footer and US$260 for a 40-footer. According to an industry source, hauliers are also expected to impose additional charges of between RM200 and RM300 per container beginning May 15. “This is a direct consequence of port operational failure, yet the Sabah business community is being forced to foot the bill. This is entirely unacceptable. “Due to port incompetence, businesses pay the price,” Liaw stressed. He said Sabah manufacturers, already burdened by higher raw material and fuel costs compared to Peninsular Malaysia, are now facing soaring detention and demurrage (D&D) charges as well as additional surcharges. The situation, he added, has resulted in lost international orders, damaged corporate reputations and the diversion of customers to more efficient ports elsewhere. “Ongoing operational bottlenecks at the port have created a significant cost-push inflationary environment. As manufacturers absorb punitive surcharges and storage fees, we have reached a breaking point where these expenses must be passed on to end-consumers. “This not only erodes public purchasing power but also stifles business profitability, threatening the long-term viability of Sabah’s industrial sector,” he said. Liaw also warned that Sabah is facing a “double-whammy”, with global tensions in the Middle East contributing to imported inflation while the port congestion creates what he described as “domestic logistical inflation”. FMM Sabah expressed disappointment over what it described as inadequate oversight by the State Government, the Ministry of Industrial Development, Entrepreneurship and Transport, and the Sabah Ports Authority (SPA). The federation urged immediate intervention to resolve the crisis and safeguard the competitiveness of Sabah industries. — The Borneo Post

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