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Malaysia’s conducive business environment has attracted multinational corporations from more than 60 countries to invest in over 3,000 companies in its manufacturing sector, making the country one of the world’s top locations for manufacturing and service based operations. The greatest advantage to manufacturers in Malaysia has been the nation’s persistent drive to develop and upgrade its infrastructure. Today, these investments have paid off handsomely and Malaysia can boast of having one of the most well-developed infrastructures among the newly industrializing countries of Asia. In fact, Malaysia is often lauded at international conferences for the country’s excellent transportation infrastructure, taking its place as one of the best in the Asian region with well-planned and constructed port facilities, roads, rails and airports, supported by state-of-the art communications networks.
A landmark event was the completion of the Kuala Lumpur International Airport (KLIA), Malaysia’s newest and biggest airport which started operations in 1998. The following year, Cyberjaya, the country’s first intelligent city and the nucleus of the Multimedia Super Corridor (MSC) became a reality, complete with a multimedia university to provide a pool of knowledge workers for industries. Also, there is the Kuala Lumpur Sentral, a transportation hub integrating all major rail transport networks, including the Express Rail Link to KLIA and Putrajaya, the government’s new administrative centre.
Malaysia’s transport network is evenly distributed throughout the country and is not just limited to the capital. Among the commercial projects earmarked in the Budget 2008 is Penang Sentral, which is being developed into an integrated transport and logistics terminal in the Northern Corridor Economic Region (NCER). To further improve the country’s transport and infrastructure, the Malaysian Government has introduced privatization as a measure to induce competitive and efficient shipping and transport activities.
Listed below are the breakdown of the Government’s development expenditure and allocation for infrastructure under the 8th Malaysia Plan (8MP) and the 9th Malaysia Plan (9MP):
| Development Expenditure and Allocation for Infrastructure (2001-2010) |
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Source: Economic Planning Unit * Includes village roads |
ROAD TRANSPORT
Currently, road and rail transport are crucial elements in the local logistics network as up to 90% of inland passenger and cargo movements are by road, thus explaining the Malaysian government’s emphasis on extensive and efficient road systems to link all parts of the country. The total road length as at 2005 was 77,673km, while as at 2006 there were approximately 1,500km of tolled highways in service, operated by the various toll concessionaires.
The 823km long North-South Expressway forms the backbone of Malaysia’s roads infrastructure, it starts up north at Bukit Kayu Hitam and ends down south in Johor Bahru, linking all major cities on the West Coast of Peninsular Malaysia between Thailand and Singapore. Besides these, several major roads such as the East Coast Highway Phase 1 (from Karak to Kuantan in Pahang), Muar Bypass Road (Johor), Nangoh-Kanibungan Road (Sabah) and Tanjung Kidurung-Suai-Bakam Road (Sarawak) were completed to support the development of the eastern corridor of Peninsular Malaysia as well as East Malaysia. Under the Budget 2008, Sabah and Sarawak were each allocated RM4 billion to implement developments projects, which include the construction of Sandakan Northern Ring Road (Sabah) and Jalan Kota Samarahan-Gumpeh (Sarawak).
The Malaysian Highway Authority supervises and executes the design, construction, regulation, operation and maintenance of inter-urban highways in Malaysia. These comfortable expressways connect all major townships and potential development areas, and have catalyzed industrial growth by enabling efficient transportation. The immediate benefits having proper road systems were more safety, reduce travel time and comfort to user. Other benefits in terms of economic development were perhaps less apparent in the early years but became more and more visible as new townships and industrial parks began to take shape along the length of the expressway, and trade and tourism enjoyed a new era of growth spurred on by increase accessibility.
RAIL TRANSPORT
Railways in Malaysia began because of the need to transport tin from mines in the hinterland of the west coast states of Peninsular Malaysia to coastal ports. The first railway line, a mere 13km, began operation about 120 years ago back in 1885, running between Port Weld and Taiping, the centre of tin-mining activities in the Larut Valley, Perak. Since then, Malaysia’s railway system has evolved tremendously, spanning the east and west coast of the country with tracks equaling 2,003km. In East Malaysia, a 134km railway line connects Tanjung Aru near Kota Kinabalu and Tenom in the interior of Sabah state. This line is the only railway on the island of Borneo.
Presently rail transport in Malaysia comprises heavy rail (including high-speed rail), light rail transit (LRT), monorail and a funicular railway line. Heavy rail is mostly used for intercity passenger and freight transport as well as some urban public transport. The KLIA Express and KLIA Transit are high-speed train services connecting Kuala Lumpur to KLIA. LRTs and the sole monorail line in the country are also used primarily for public transport in Kuala Lumpur, while the only funicular railway line is found in Penang to ferry tourists up Penang Hill. Rail transportation of freight accounts for only a small share of 3% of the total freight carried by all modes in the country. The growth in this sub-sector is spearheaded mainly by the national railway company, Keretapi Tanah Melayu Berhad (KTMB) through its freight division. As the largest transport organization in the country, KTMB, through its freight trains has the capacity to transport several classifications of goods ranging from grains to machinery. Its network runs the length and breadth of Peninsular Malaysia from the northern terminal in Butterworth and Thailand southward to Pasir Gudang, Johor and through to Singapore. The same northerly line serves wharves and port facilities in Penang. Besides KTMB, Malaysia’s national petroleum company – Petronas, owns a dedicated railway from Kerteh to Kuantan Port used exclusively to transport petroleum products.
In terms of development undertaken to upgrade railway infrastructure, the government plans to complete the Rawang-Ipoh double tracking and electrification project by early 2008, work for the Ipoh-Padang Besar, Seremban-Johor Bahru section of the same project will begin at the end of 2007 and is expected to be completed in 5 years. There is also a proposal to build a high-speed rail link between Kuala Lumpur and Singapore. However as of June 2007, the feasibility of the proposal was still being studied. If it materialized, this RM8 billion project would slash rail travel time from more than 6 hours to about 90 minutes.
PORTS
The Ministry of Transport has under its jurisdiction 7 major federal international ports whereby 6 ports are located in Peninsular Malaysia and 1 in Sarawak. The country’s 7 key seaports are:
- Port Klang, about an hour’s drive from Kuala Lumpur
- Penang Port, located in the industrialized island of Penang in the northern region of Peninsular Malaysia
- Pasir Gudang, Johor
- Port of Tanjung Pelepas (PTP), Johor
- Kuantan Port, Pahang
- Kemaman Port, Pahang, a supply base that caters to the needs of petroleum companies
- Bintulu Port, Sarawak, catering mainly to the liquefied natural gas (LNG) industry
Modern facilities and equipment are available at all of these ports to facilitate a full range of cargo handling and related activities including containerized cargo and dry bulk cargo. The government's policy on ports focuses on:
- Being supply-driven, i.e., the provision of ample capacity in ports to ensure that there is no congestion and there is zero waiting time for ships.
- Load centering, making Port Klang as the national load centre and the regional trans-shipment hub. As such, cargoes from all other Malaysian ports, which assume the role of feeder ports, are being consolidated where possible through Port Klang.
- Developing the PTP as the trans-shipment hub for the southern region of Malaysia.
During the 8th Malaysia Plan (2001-2005), major projects were undertaken to upgrade the facilities and expand the capacity of ports including the construction of additional berths at West Port of Port Klang, PTP Johor, Penang Port and Kuantan Port as well as a container terminal and oil jetty in Sepangar Bay, Sabah and the Second Inner Harbour Basin of Bintulu Port in Sarawak.
In 2005, Malaysian ports handled 369.4 million tonnes of cargo, up 65% from 223.9 million tonnes in 2000. Among the major ports, Port Klang and PTP in Johor have experienced tremendous growth. Port Klang registered an increase of 57% from 70 million tonnes in 2000 to 110 million tonnes in 2005, while PTP saw an increase of 102% from 29.5 million tonnes to 59.6 million tones at the same time. According to the Malaysia Freight Transport Report, shipping freight is expected to grow by an average 7.3% p.a. in 2007-2011. Consequently, the total number of containers handled at Malaysia’s ports will grow even stronger at 11% p.a. over the same period. In the pipeline are the Port Klang Free Zone (PKFZ), shipping firm MISC Bhd's Regional Logistics Hub (RLH), the Selangor Halal Hub, and the recent relocation of the Royal Malaysian Selangor Customs headquarters. The establishment of these multi million ringgit projects within the vicinity of Westport will create an economic stimulus from industries that will set up especially in the free zones, and this in turn will be a boon for the growth of the port.
AIRPORTS
Malaysia’s central position at the crossroads of South-East Asia makes her particularly attractive as a trans-shipment centre. The air cargo sub-sector is the fastest-growing segment of the logistics industry. And rightly so, air cargo facilities are well developed, especially in the 5 international airports in Malaysia, namely the Kuala Lumpur International Airport (KLIA) in Sepang, Penang International Airport, Langkawi International Airport, Johor International Airport, Kota Kinabalu International Airport in Sabah and Kuching International Airport in Sarawak. All the airports are serviced by an increasing number of major airlines and have state-of-the-art cargo transportation facilities.
The highly sophisticated KLIA has a current capacity of 25 million passengers and more than 650,000 tonnes of cargo annually. KLIA plans to accommodate up to 60 million passengers and 3 million tonnes of cargo annually by the year 2020, and in the future, up to 100 million passengers and 5-6 million tonnes of cargo per year on its 25,000 acres of land. KLIA houses an Advanced Cargo Centre (ACC) within a Free Commercial Zone (FCZ). This centre features sensitive and sophisticated security systems and the latest technology including fully automated procedures, ensuring real-time data tracking and the smooth flow of communication. Among the facilities at the centre are the Animal Hotel, the one-stop Perishable Center and the world's first priority business centre (PBC) for key forwarding agents.
KLIA was voted the World's Best Airport in the 15-25 million passengers per annum category for 2 consecutive years, in the 2005 AETRA awards and 2006 ACI-ASQ awards. It also bagged 3rd place for both Best Airport Worldwide and Best Airport in Asia Pacific categories. The newest addition, Low Cost Carrier Terminal (LCCT-KLIA) attracted a total of 4.8 million passengers up to the end of 2006, barely 7 months after beginning operations, scooping up the Best Low Cost Airport 2006 title at the Centre of Asia Pacific Aviation (CAPA) awards in the process. In addition, the Kota Kinabalu International Airport, together with Tawau and Sandakan airports was recently audited and met the requirements set by International Civil Aviation Organization (ICAO), certifying these airports to have provided uniform safety conditions for all aircrafts. In Sarawak, new airports were built in Limbang and Bintulu while the Miri and Sibu airports were upgraded to complement other modes of transport, particularly to the rural areas. Upgrading works on the Alor Setar and Kota Bharu airports were also completed. These developments augur well for the aviation sector in Malaysia especially since the number of passengers and cargos are forecasted to increase by 27% and 38% respectively in 2010 from 42.8 million passengers and 1.07 million tonnes of cargo in 2005.
CARGO TRANSPORTATION
In Malaysia, there are various companies providing comprehensive containerized cargo transportation services. These services include container haulage, freight forwarding, warehousing, bunkering, distribution related services, port and customs clearance, and container repair, leasing and maintenance. Consignees and clients in Malaysia enjoy speedy, efficient and reliable cargo transportation through a network of local branches and offices. Most companies also offer a good international network of agents.
Container Haulage
The Malaysian government regulates inland container haulage through the Commercial Vehicle Licensing Board (CVLB) under the Ministry of Entrepreneur and Cooperative Development. A total of 62 haulers cater to varied cargo needs through a diversified fleet of trailers and prime movers sporting 20 to 40-foot trailers, which also include modified vehicles. These haulage companies are fitted with air suspension stems to shield cargo, coupled with generator sets to maintain constant temperature. Some come equipped with modern tracking systems to enable contact with haulage vehicles on the road. Numerous other medium and small-sized operators are available to truck conventional cargoes to destinations in the country. Most haulage agencies can deliver goods within 24 hours in the Klang Valley while some can do it in half the time. Meanwhile, a block rail feeder service operates to specific destinations and a freight liner service takes care of container deliveries to outstation clients. This multi-modal (road and rail) transportation system assures efficient and prompt delivery of cargo to clients.
Freight Forwarding
Hundreds of freight forwarding agents stationed throughout Malaysia offer nationwide freight forwarding services, while cargo bound for international destinations can be forwarded through various international freight forwarders with agents at ports of discharge worldwide. Freight forwarders also handle the complete range of documentation pertaining to import and export. For example, they can assist SMIs in the processing of applications for required permits, licenses and duty/tax exemption for the clearance of goods from the Customs, port or railway authorities.
Warehousing Services
Today, major ports in Malaysia offer both bounded and unbounded warehousing, where there are state-of-the-art facilities, customized to handle cold-storage, temperature-controlled storage, open yard and dangerous cargo storage. The services offered include container stuffing and unstuffing, freight consolidation, cargo storage, product repackaging, labeling and crating. These facilities are ideal for various storage condition with good ventilation and heat insulation; especially for food products and other heat-sensitive items; raised platform and dock levelers to facilitate ease of loading and unloading; 24-hour security and fully computerized warehouse management, inventory control and other processing systems.
Shipping
At present, Malaysia’s shipping lines covers a vast worldwide network. The shipping industry’s fleets comprise fully cellularized container ships, multi-purpose bulk carriers, panamaxes, crude oil tankers, parcel tankers, chemical tankers, product tankers and liquefied natural gas carriers. They are also capable of handling a wide range of cargo, ranging from high-tech goods, grains and chemicals to minerals and petroleum products. Well-trained and experienced crew coupled with modern equipment and systems provide the required back-up.
CONCLUSION
Looking across all transport modes in Malaysia, the total freight carried, measured in million tonnes-km (mntkm) is forecasted to grow by an annual average of 7.3% over the 2007-2011 period. All in all, the outlook for the freight industry is quite encouraging. Between 2007-2011, the transport and communications sectors are expected to outpace the economy on a whole in value terms. It is likely to achieve an average annual growth of 5.5%, versus 5.3% for overall GDP. The total value of transport and communications GDP will rise to US$17.7bn in nominal terms by 2011, representing 7.4% of Malaysia’s GDP.
