Logistics
Northport: Act now on issue of cargo transport
By Business Times
Mar 19, 2007, 10:45

Northport: Act now on issue of cargo transport
By Presenna Nambiar
presenna@nstp.com.my

March 19 2007

THE newly-created Malaysian Logistics Council should lead the way in ensuring that the carriage of cargo is not dominated by a specific mode of transportation, a top executive of Northport (Malaysia) Bhd said.

Northport managing director and chief executive officer Datuk Basheer Hassan Abdul Kader said there must be a conscious attempt to foster a modal shift through innovative technologies and techniques.

"I urge that the Malaysian Logistics Council study this issue in greater depth and detail," Basheer said at the Chartered Institute of Logistics seminar last Tuesday.

Ninety five per cent of Malaysia's cargo are today transported by road.

He said with such high stress on the roads, and Malaysia having one of the highest rates of road accidents in the world based on population ratio, it is now time for policy planners to give serious thought on fostering a modal shift in the movement of freight.

Basheer cited rail as the unintended victim of competition and lower prices when the Government decided to liberalise the local road haulage industry.

"I am not saying that the industry should not have been liberalised. I am saying that the policy decision should have been linked to other collateral issues such as environmental concerns, modal shift and so forth," Basheer said.

The share of the transport sector's contribution to the country's gross domestic product rose from 5.6 per cent from 1980 to 8.1 per cent in 2000.

"We have overtaken the contribution of mining and construction sectors during the same period.

"Freight transport demand has been expanding faster than forecast in various development plans," he said.

Freight transportation demand is estimated to total some 900 million tonnes, assuming a multiple of five against traffic handled by ports.

Cargo volume at the country's ports grew from 252 million tonnes in 2005 to 370 million tonnes last year.

Freight carried by rail, however, declined by 13.7 per cent from 5.6 million tonnes in 1990 to 4.98 million tonnes in 2000.

This is despite container volume increasing from 94,403 TEUs (20-foot equivalent units) in 2000 to 258,000 TEUs in 2005.

Road freight transportation has been growing at 10 per cent per year in the last decade.

An estimated five million tonnes of freight are handled per day. Based on its share by region in the Peninsular Malaysia, 26 per cent are from the north, central 34 per cent, south 23 per cent and east 16 per cent.

"It is evident from the broad trends that we are potentially facing a serious issue if we do not address the modal issue correctly," said Basheer.

"We should act now rather than wait for things to reach to an unmanageable level, with huge implications to social costs," he added.

He said Malaysia is not alone in this, but that "the European Union had quickly acted by coming up with a white paper on transport policy, that went into every single detail possible that could foster the modal shift and corridor development, when faced with the same problem".


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