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CabotageCabotage PartialPartialLiberalisationLiberalisation PolicyPolicy

ResearchResearch

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cabotagecabotage What isWhat is cabotagecabotage??

The word comes from FrenchThe word comes from French -- cabotercaboterwhich meanswhich means to sail along a coastto sail along a coast..

Generally refers to the transport ofGenerally refers to the transport of

passengers and goods.passengers and goods. Involving the transport between two points inInvolving the transport between two points in

the same country and it is athe same country and it is atrade ortrade or

navigationnavigationin coastal waters or the exclusivein coastal waters or the exclusiveright of a country to operate the air trafficright of a country to operate the air trafficwithin its territory.within its territory.

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CabotageCabotage Policy (Malaysia)Policy (Malaysia)

The policy which reserves the domestic trade toThe policy which reserves the domestic trade toits own flagged vessels known asits own flagged vessels known as CabotageCabotagePolicy.Policy.

CabotageCabotage policy or laws used to protect and topolicy or laws used to protect and topromote a strong national shipping industry.promote a strong national shipping industry.

Malaysian government implemented a policyMalaysian government implemented a policy

which reserves the transportation of goods inwhich reserves the transportation of goods inthe domestic trades to ship flying the Malaysianthe domestic trades to ship flying the Malaysian

flag.flag.

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This policy implemented on 1This policy implemented on 1stst JanuaryJanuary1980 with amendment of the Merchant1980 with amendment of the Merchant

Shipping Act 1952Shipping Act 1952 Gov. appointedGov. appointed

Domestic Shipping Licensing Board (DSLB)Domestic Shipping Licensing Board (DSLB)to regulate & control domestic shippingto regulate & control domestic shipping

between port in Malaysia.between port in Malaysia.

This policy necessary because only a smallThis policy necessary because only a smallnumber of Malaysian registered ships werenumber of Malaysian registered ships were

plying the coastal routes.plying the coastal routes.

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Shipping route between port before partialShipping route between port before partial

cabotagecabotage liberalisationliberalisation

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Shipping route between port after partialShipping route between port after partial

cabotagecabotage liberalisationliberalisation

03 June 2009 Government opened up to foreign ship owners the carriage of transhipment containers

from Port Klang & Tg.Pelepas to ports in Kuching,Bintulu and KK.-Partial liberalisation allowed foreign vessels to carry containerised transhipment cargo directly

to Sabah & Sarawak witout need for a domestic shipping license

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The Borneo Post/UseThe Borneo Post/Use MuaraMuaraport to circumventport to circumvent cabotagecabotagepolicy/policy/March 7, 2011March 7, 2011.. United Borneo Front (UBF) coUnited Borneo Front (UBF) co--founder,founder,ZainalZainalAjamainAjamain : Business in Sabah can avoid the extra shipping: Business in Sabah can avoid the extra shippingcosts caused by thecosts caused by the cabotagecabotage policy by taking advantage of thepolicy by taking advantage of the

loophole in the system and ship their goods into the state usingloophole in the system and ship their goods into the state usingMuaraMuara Port Brunei.Port Brunei.

The Borneo Post/ Impact analysis onThe Borneo Post/ Impact analysis on liberalisationliberalisationfromfrom cabotagecabotageproposed/ Oct. 26, 2011.proposed/ Oct. 26, 2011. -- Industrial Development Minister,Industrial Development Minister,DatukDatukRaymond TanRaymond TanAn impact analysis on the partialAn impact analysis on the partial

liberalisationliberalisation of theof the cabotagecabotage policy affecting operational costs inpolicy affecting operational costs inSabah && SwkSwkneeds to be carried out.needs to be carried out.

We need to know ports likeWe need to know ports like KuchingKuching,, BintuluBintulu& KK were& KK wereliberalisedliberalisedfromfrom cabotagecabotagepolicy, what impact it has, how much itpolicy, what impact it has, how much itaffects the cost of operation within these areas before we can saffects the cost of operation within these areas before we can sayay

that the high cost of goods is because ofthat the high cost of goods is because of cabotagecabotage

Recent Issues AboutRecent Issues About CabotageCabotage

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Deputy International Trade & Ind. MinistryDeputy International Trade & Ind. Ministry DatukDatukJacob D. SaganJacob D. Sagan

Fed.Fed. govgov.. realisesrealises that what the industries in Sabah want is forthat what the industries in Sabah want is forinternational carriers &international carriers &shipping lines to be allowed to bringshipping lines to be allowed to bring

imported goods direct to the state, however, he pointed out thatimported goods direct to the state, however, he pointed out that

international carriers & shipping lines are reluctant to come tointernational carriers & shipping lines are reluctant to come to thisthis

state because of the cost they will incur.state because of the cost they will incur.

Daily Express / No decision yet to abolishDaily Express / No decision yet to abolish cabotagecabotagepolicy / Nov.policy / Nov.23, 2011.23, 2011. Industrial Development Assistant MinisterIndustrial Development Assistant Minister DatukDatukMichaelMichael

AsangAsang There is no latest development to the proposal to abolishThere is no latest development to the proposal to abolishthethe cabotagecabotage policy. Government is awaiting anpolicy. Government is awaiting an assesmentassesment reportreport

on the impact of itson the impact of its liberalisationliberalisation by Maritime Institute of Malaysia.by Maritime Institute of Malaysia.

My ministry has given its answer then andMy ministry has given its answer then and untilluntilltoday, thetoday, thesituation remains the same as there is no latest development onsituation remains the same as there is no latest development on

the issue raisedthe issue raised..

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Terminal Handling Charge (THC) meeting / Nov.30,2011Terminal Handling Charge (THC) meeting / Nov.30,2011

The meeting decided to accept the proposed reductionThe meeting decided to accept the proposed reductionon the THC to RM70 per container including theon the THC to RM70 per container including the

transportation and depot handling cost. The meetingtransportation and depot handling cost. The meeting

requestedrequested Mr.LoMr.Lo ShuShu KiongKiong to bring this proposed rate toto bring this proposed rate to

MASA for further consideration.MASA for further consideration.

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ConclusionConclusion

ThisThis cabotagecabotage policy is precisely made to protectpolicy is precisely made to protect

the local shipping industry in Malaysia. But, inthe local shipping industry in Malaysia. But, inthisthis globalisationglobalisation era, this policy seen no longerera, this policy seen no longerrelevant. Shipping industry need to make arelevant. Shipping industry need to make a

reformation by offering a healthy competitionreformation by offering a healthy competitionbetween local and international shipping so as tobetween local and international shipping so as todeveloped other industries part in Malaysiadeveloped other industries part in Malaysiaespecially in Sabah and Sarawak. Therefore, aespecially in Sabah and Sarawak. Therefore, a

comprehensive, thorough and fair study andcomprehensive, thorough and fair study anddiscussion should be done for the commondiscussion should be done for the commongood.good.