EXCESSIVE SHIPPING COSTS IS THE ISSUE – FSM

Excessive shipping costs is the issue – FSM

Quote:’Right now, the shipping industries win all and Sabah loses all.’

KOTA KINABALU Mac 29, 2012: Transport Minister Datuk Transport Minister Dato Seri Kong Cho Ha still does not understand the predicament of Sabah industry, especially with regard to the import and export of goods, said the Federation of Sabah Manufacturers (FSM).

Based on the minister’s statements and clarifications, it is obvious that he still does not understand, FSM said in a statement yesterday.

It said: “We have made it very clear that it is not a question of direct shipment entering or leaving Sabah. “The gist of the issue, which the Transport Minister missed is the excessive shipping costs of doing business in Sabah.

“Some examples of these costs are the terminal handling charge, local container handling charge, the bunker adjustment factor charges and other ancillary charges etc.

“The Transport Minister should really study and educate himself on the shipping costs borne by Sabah shippers (shippers refer to people who are using ships that is the importers and exporters) and to understand it from Sabah’s perspective.

“These costs are exorbitant and are being hiked constantly and arbitrarily; there is no monitoring body to regulate price within the shipping industry and there is no fair competition within the shipping industry in order to bring about fair prices due to the restrictive cabotage policy.”

According to FSM, Sabah shippers are heavily burdened by these costs and are at the mercy of the shipping companies.

“This is totally unfair and unacceptable to Sabah and cannot be allowed to continue.

“Does the minister know the shippers or the people of Sabah are paying more than a billion ringgit a year for these shipping services? In other words this is more than RM100 million business for them a month.

“The Transport Minister has claimed to have met and discussed the issue 22 times. After so many meetings, the issue remains unresolved.

“We know for a fact that the current Transport Minister has met with Sabah trade chambers and associations only once and nothing came out of that one and only meeting.

“We wonder which relevant authorities he met for 21 times when the right party to meet is the Sabah trade chambers and associations.

“It is frustrating that the Minister of Transport and his officers involved takes years to reach a decision (or no decision), nothing concrete is on the way.

“It shows how incompetent they are and this is completely in contrast with the concept of 1Malaysia which advocates “People first and performance now” as initiated by our Prime Minister,” said the federation.

“Let’s not waste more valuable time and resources debating the same old issues which we already know like the back of our palms.

“Let’s move the agenda forward now to translate the current Transport Minister’s wish to achieve a win-win situation, especially for Sabah, as he himself has put it.

“Right now, the shipping industries win all and Sabah loses all.

“Since the minister has claimed that he knows what the people of Sabah want, we will wait and see whether his words match with his action,” FSM said.

Meanwhile, the federation thanked the state government, particularly Deputy Chief Minister Tan Sri Datuk Seri Panglima Joseph Pairin Kitingan, Deputy Chief Minister Datuk Dr Yee Moh Chai and Assistant Minister to the Chief Minister Datuk Edward Khoo as well as all concerned citizens from both sides of the political divide for lending support to this issue and hopes a concrete and long-term solution can be achieved soon with the support of the State Government.

However, FSM stands by what it had stressed earlier.

“We want the Prime Minister to step in. He may appoint a new MCA minister from Sabah to handle the case or a committee to be chaired by the former Minister of Transport Datuk Ong Tee Kiat who is also from MCA.”

Responding to Sabah Industrial Development Minister Datuk Raymond Tan’s statement that there is no more cabotage in Sepanggar port, FSM said:

“We hope the minister know what he is talking about? We wonder who has declared KK Port free from cabotage? “There is such thing as full liberalization and partial liberalization of the cabotage policy. “Sepanggar or KK port was given only partial liberalization on June 3, 2009.

“There is no cabotage among the ports within Peninsular Malaysia, that is what we call full liberalization.

“We want to tell the minister we did not start the war of words in the newspapers so is this message today.

“It was the Transport Minister who dropped a bombshell on the soil of Sabah’s newspapers on March 21. Maybe our minister can swallow the humiliation and insult.

“Sorry, we FSM in Sabah have our own dignity. We are not brave people but certainly we have the courage to correct what is wrong! We have sat down with them for more than 10 years and for the last 10 years we had, for every Ministry of International Trade and Industry (MITI) dialogue, submitted the same issue.

“We now have missed the tunnel, don’t even talk about the very dim light at the end of it.

“We do not blame MITI because they also have problem with Ministry of Transport. “If you are in our shoes you will understand our frustration.

“FSM’s proposal for 25 years of tax holidays to help the industry catch up with our counterpart in Peninsular was deemed illogical by the minister at an instant reply.

“He has not even asked for our proposal and the rationale why we proposed it, he already gave a negative answer.

“That is very quick and fast decision. He should make a better Transort Minister.

“The minister should compare apple to apple when he talks about incentives. The shipping industry enjoyed unlimited years of full tax holidays until 2012 and still enjoys 70 per cent tax exemption.

“Moreover they are given a protected market which has a volume of more than a billion ringgit a year to be shared among less than 10 companies by the cabotage policy.

“Compare to the incentives that are given to the Sabah industry, we look very much like a second class citizen in our own land. “Is this what one’s call logic and fairness? Your guess is as good as ours.

“Below is a simple and conservative calculation for you to understand the seriousness of the issue.

Figures from 2011 statistics showed shipping revenue earned from Sabah amounted to RM1.2 billion a year.

• “This is equivalent to RM35 per person per month based on population of three million, or RM175 per family.
• “This amount of money earned by shipping alone constitutes 25 per cent of average Sabah household income of RM692 (RM577 x 1.2). (1.22 person is working out of average family size of 5.88 – Sabah statistics)
• “In other words 25 per cent of the family income goes to shipping cost! How about other logistic costs which may also be under the jurisdiction of MOT?

“As they claimed shipping costs only contributed 40 per cent to the total logistic costs, one can easily envisage the cost of goods in Sabah to be as high as more than 30 to 40 per cent compared to Peninsular.

“That is perhaps why Sabah Government has a tough time fighting poverty.”

FSM said that as elected representative of its members, it has the obligation to look into their predicament.

“They are the local SMEs and not the big corporate investors from overseas who can bring billions, but we are here to stay forever.

“Our SMEs are suffering and suffocating, we cannot tell them “Let us give you cake and Santola coffee”. We beg for your pardon.”