MISC decision to exit container shipping applauded as 'wise move'
MALAYSIAN maritime interests have approved MISC Bhd's decision to leave
container shipping as a "wise move" because staying in would mean
setting itself against heavyweight rivals in an unwinnable war of
attrition. Tuesday, 06.Dec.2011, 00:56 (GMT+3)
MALAYSIAN maritime interests have approved MISC Bhd's decision to leave container shipping as a "wise move" because staying in would mean setting itself against heavyweight rivals in an unwinnable war of attrition.
"To become a major player in the international container shipping industry requires massive investment. MISC would have to invest a lot more to compete with major shipping lines that have mega ships of 12,000 to 16,000-plus TEU and a fleet size that runs into hundreds," an industry source told Kuala Lumpur's Sun Daily.
"Against this background, MISC's decision to exit the liner business is not a bad thing after all. In fact, they should have done it earlier," he said.
On November 24, MISC announced it was getting out of the liner business, having suffered losses of US$789 million over three years.
According to industry observers, Northport in Port Klang will be hurt by MISC's withdrawal because the domestic carrier was an important customer.
From January to September, Northport saw a 4.1 per cent drop in container volume to 2.4 million TEU year on year. When contacted, Northport (Malaysia) Bhd managing director Hassan Abdul Kader declined to comment.
A senior executive with a non-Malaysian shipping company said he did not expect foreign shipping lines operating in Malaysia to benefit much from MISC's withdrawal because it had cut capacity in recent years and only had a small fleet of 16 containerships.