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Sea trade's hope to benefit from air cargo likely to be disappointed

RISING competition from air cargo services may dent any windfall hopes for shipping container demand following the rebound in global trade activities in the second half of 2020, reports Kuala Lumpur's Malaysian Reserve

30 December 2020 - 19:00
RISING competition from air cargo services may dent any windfall hopes for shipping container demand following the rebound in global trade activities in the second half of 2020, reports Kuala Lumpur's Malaysian Reserve.

As international passenger flights continue to be banned in many countries, airlines have opted to fold down their seats to make room for freight to meet demand and cover their operating losses.



According to official data, the total container throughput at Port Klang's Westports dropped by four per cent for the first nine months of 2020. Export and import volume fell eight per cent compared to last year, while transshipments rose five per cent year on year.



For the southern region, the Port of Tanjung Pelepas saw a marginal decline of 0.6 per cent annually on its imports and exports for 10M20.



Bank Islam Malaysia economist Adam Mohamed Rahim said Malaysia's ocean freight is expected to be flattish before pointing upwards in 2021 following the gradual world economic recovery.



'Due to Covid, port operators in Malaysia have been expecting lower container throughput amid weaker demand for goods worldwide compared to previous years.



'In the near term, we foresee front-loading of cargo during Christmas and ahead of Chinese New Year to support container throughput towards the end of the year.



'Container throughput in 2020 is expected to be flattish before recovering in 2021, barring any unforeseen circumstances from the latest jitters of the mutated Covid-19 found in the UK,' he told The Malaysian Reserve.



Mr Rahim said concerns over the resurgent Covid are threats to global sea shipment, which was disregarded as among the beneficiaries in the distribution of vaccines.



'The only major drag on global container throughput in 2021 will be China's decision to limit access to ships if there is a rise in Covid cases.



'Concerning the vaccine distribution, air freight will be the main mode of transport as it is faster,' he said.



Meanwhile, the government's expenditure allotted under Budget 2021 for transportation and infrastructure will indirectly boost the country's container throughput due to the higher demand for building materials,' he said.


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