Saturday, March 28, 2009

Cabotage Within A Cabotage: Sabah Ports' Moronic Idea

Hantu Laut

Most developed nations have cabotage law to protect transport of goods and passengers within the country.

'Cabotage' basically means the transport of goods or passengers between two points in the same country.It is a form of protectionism.It was originally started in shipping but later widen to cover aviation and to all other form of inland transport.The US has strict cabotage policy and consider it as not only protection for domestic transportation but as a form of national security and public safety.

Malaysia has its own cabotage policy to protect local shipping. Most goods from overseas are first shipped to Port Klang and later shipped on local carriers to other ports in the country. If domestic shipping is efficient and readily available than this is fine, the costs of transportation could be lowered but it could pose huge problems if the local shipping is erratic and inefficient, costs would go up making goods more expensive and less competitive.

Consumers in Sabah and Sarawak have to pay higher price for consumers goods due to the policy and even worse, manufacturers in the two states who export their products overseas have to incur higher costs in paying additional freight/transhipment charges for transhipment of the goods through Port Klang which is not a very efficient port by any measure.

There should be flexibility in this policy as far as Sabah and Sarawak are concerned.Strict adherence to cabotage would make Sabah and Sarawak unattractive to investors. There should be total relaxation on bulk shipments. That is to allow direct calls by both foreign and Malaysian registered vessels for bulk cargo going out or coming to the ports in Sabah and Sarawak. The two states are separated from the Peninsula by over a thousand miles of open sea and a malleable cabotage policy should be the case.

Take for instance if there was a big shipment of heavy equipment from Kobe in Japan to Kota Kinabalu it makes economic sense if the sailing is direct to Kota Kinabalu instead of going to Port Klang first because the freight charges would be much cheaper than to send it to Port Klang and than re-ship to Kota Kinabalu.

As they say "from the frying pan into the fire". It bothered me to read the most ridiculous proposal by Sabah Ports to make Kota Kinabalu Sepangar Port as the only terminal port for all ships coming to Sabah including all ships from Port Klang.Goods destined for other ports in Sabah shall be transported by barges and scows from the Sepangar Port.

I wonder whether the people in Sabah Ports are fit to be there in the first place. Void of better ideas on how to make money this bunch of morons have decided to start their own cabotage policy.They are trying to create a
cabotage within a cabotage and bring more miseries to the economy and the people of Sabah.

The business community and the people of Sabah are already burdened by the high costs of goods by the inefficiency of domestic shipping protected under the national cabotage policy and they are trying to add salt to the wound and aggravate the already unpleasant situation. Needless to say this kind of vacuous policy would drive away both domestic and foreign investors.No businessman in his right mind will invest in a state where poor infrastructure, high costs of production and high cost of shipping existed.

It is also ridiculous on the part of Sabah Ports to implement such ridiculous policy after spending huge amount of money to upgrade the Sandakan port and those in Lahad Datu and Tawau.

This kind of policy makes no economic sense to Sabah other than to serve the incompetence of the 'goyang kaki'( laziness) management of Sabah Ports. The proposal virtually makes one 'smell a rat' in Sabah Ports and its parent company Suria Capital. The next step is to monopolise the transport sector by giving it to one or few people.

Malaysia as a nation already have in existence a national cabotage policy which covers the whole nation. Sabah should not be allowed to implement its own cabotage policy just to fulfil the whim and fancies of the management of Sabah Ports. The state government should not agree to this meretricious proposal even though Sabah Ports belong to the state.It's would be killing the elephant to save the ant.

I would be surprised if Chief Minister Musa Aman who himself was a businessman will allow this kind of policy to be implemented and one that will damage the state economy and stifle new investments.

Maybe, he should also consider appraising the management of Sabah Ports whether they are competent to run port business without government protection.


SM said...


The people of Sabah & Sarawak have been "screwed" (pardon my French) by the BN Federal Government for years.
When will these poor souls wake up & smell the coffee?
Every so often the Federal Govt. will hand out "peanuts" to the Sabahans & Sarawakians (& we all know who we feed peanuts to, don't we?!)
While the rest of the country are fed-up with the BN (as can be seen in the last GE), East Malaysians still support the BN (for one stupid reason or another).
Maybe the tide will start turning soon, starting with Batang Ai?!

Hantu Laut said...

I have a feeling Batang Ai may be a tough nut to crack.

SM said...


Yup, I fear you are right!