Port Klang stops inter-port transfer subsidies

Port Klang stops inter-port transfer subsidies The Port Klang Authority has decided to stop a subsidy on inter-terminal transfer of containers between the two ports it regulates beginning July 1, despite protests by shipping lines and terminal operators, the Business Times of Malaysia reported Monday.
   According to the report, the subsidy was initiated 13 years ago by the Malaysian government to attract transshipment cargo to Port Klang. It involves the transfer of containers, either by rail or road, between Northport and Westports (the two ports PKA regulates) to secure onward transshipment connections provided either by mainline or feeder vessels.
   PKA general manager Datin Paduka O.C. Phang told the Business Times that the subsidy has helped Northport and Westports to attract shipping lines to transship via Port Klang, and it is now time for the two terminal operators to work with shipping lines to absorb the inter-terminal transfer costs.
   “We cannot be helping them perpetually,” she said. Phang declined to reveal how much money the port authority spends on inter-terminal transfers, except to say that it is “quite significant.'
   The current subsidy is nearly $24 per TEU and $48 per FEU. But the newspaper reported that shipping lines will pay as much as $35 to transfer a 20-foot container and $70 for a 40-foot container by rail between the two ports.
   “The ITT service between Northport and Westports should remain free like that of between Jurong Port and Pasir Panjang in Singapore, because this is an internal issue,' Thum Hoong Yip, Jardine Shipping Services country manager, told the Business Times. Port Klang has 'two terminals and thus, we should not be charged for it.”
   He also said that removing the subsidy would make Port Klang less conducive to transshipment activities. CMA-CGM Malaysia managing director Simon Whitelaw agrees.
   Northport last year handled 2.7 million TEUs, of which 37 percent was transshipment cargo, while Westports handled 3.7 million TEUs, of which 62 percent were transshipment cargo.