News / Malaysian shippers should source closer to home to avoid delays

Amid the Red Sea crisis, Malaysian manufacturers have been urged to source raw and intermediate materials from neighbouring countries.

Soh Thian Lai, of the Federation of Malaysian Manufacturers, said his fellow members should to book containers and shipping schedules at least a month in advance for transport to affected markets and to prepare for fluctuating freight rates and extended sailing times.

Mr Soh advised manufacturers to use a combination of sea, air and land transport to avoid the longer voyages arising from ships being diverted to the Cape of Good Hope.

He said: “For goods that are not time-sensitive, it is advisable to wait until the first few weeks of February, during the Chinese New Year holiday, as freight costs are expected to decrease during this period.”

Although it was too expensive to move large volumes of goods by air, Mr Soh said it was viable for high-value cargo.

It has been estimated that 80% of ships that previously transited the Suez Canal en route to Europe have been rerouted around the Cape to avoid Houthi attacks in the Red Sea.

Mr Soh  said: “As Asean supply chains are also deeply integrated with our north-east neighbours, Malaysian manufacturing companies can build resilience by working closely with our Asean counterparts. Not only as a source for inputs and a market for Malaysian manufactured exports, but also to integrate deeper for trade and investment regionally,”

Mr Soh also appealed to liner operators not to hike rates for pre-booked shipments, and to discuss any surcharges or rate increases with shippers.

And he said: “The shipping disruption stemming from the Red Sea crisis may be compounded by other threats such as extreme weather events or shifting geopolitical tensions, which will further damage already distressed global supply chains.

“We urge the government to keep a close watch on the situation to ensure that the impact does not escalate and further burden businesses and the economy.”