The Malaysia Shipowners’ Association (MASA) has called for a review of the removal of cabotage policy in Sabah, Sarawak and Labuan as it has failed to accomplish its original target.
The Malaysian government liberlised the cabotage policy in June last year, giving foreign ships the green light to transport cargo domestically with an aim to bring down cost of consumer goods in the region.
The move has since been opposed by many local shipping companies, some of which were also looking to shift their bases out of the country in order to avoid potential losses.
Datuk Abdul Hak Md Amin, chairman of MASA, told local media Bernama at Malaysia World Maritime Week that the removal of cabotage policy has failed to bring down the price of goods and is also hurting local shippers.
“We can see its negative impact on the local shipping industry and domestic shipping companies, as foreign ships, namely from Singapore, China, Thailand and Indonesia, have started crowding Malaysian waters,” Abdul Hak said.
Abdul Hak said a number of local shipping companies have been struggling and some ended up winding up their business due to unfair competition and he believes the issue has not only impacted the domestic scene but also the country’s presence on the global map due to the declining number of ships flying the Malaysian flag.
According to MASA, Malaysia recorded a freight loss of RM25bn ($6bn) in 2017 as more cargo was transported by foreign vessels.