Presentation at Asean Meeting on Logistics, Cebu. Philippines

ASEAN-‐AUSTRALIA NEW ZEALAND FREE TRADE AREA (AANZFTA) ECONOMIC COOPERATION WORK PROGRAMME (ECWP)

G DURAIRAJ, Chairman Focus Group Institutional Issues & Regulatory Framework, MALAYSIAN LOGISTICS & SUPPLY CHAIN COUNCIL

Government Role in Removing Logistics Performance Barriers


SCOPE OF PRESENTATION

q Inventory Of Malaysian Logistics: A Snapshot

q Logistics Performance: Generic Barriers & Enablers

q  Initiatives By Malaysian Government In Removal Of Performance

Barriers/Inhibitors

q Outcomes/Impact

q Other Issues That Need To Be Looked Into

q  Policy Initiatives And Future Direction

q Conclusion


The Economy

•  Total trade (value):RM1,368,883m

•  Total trade (volumetric): 600 mt

•  World rank in trade (export): 24

•  World rank in trade (import): 26

•  GDP: USD 312 billion

•  Per Capita Income: USD10,500

Components of Exports: 2013

Inventory of Malaysian Logistics


•  Total trade (value):RM1,368,883m

•  Total trade (volumetric): 600 mt

•  World rank in trade (export): 24

•  World rank in trade (import): 26

•  GDP: USD 312 billion

•  Per Capita Income: USD10,500



Malaysia’s Global Trade Map



Container Port Throughput: 20.87 million TEU

Container throughout Ranking by Country: No 6

No of Gateway ports: 10 International ports

International Supply Chain Connectivity Index: No 5

No of Federal/state ports: 22

Gateway International airports: 6

Liner Shipping Connectivity Index, 2013: Rank 5

Logistics Performance Index: No 25

Doing Business ranking: No 6


Malaysian Ports


Malaysian Airports


Expressways Railway Lines

Surface Transportation Network



Total ship calls 62,669 ship calls

Transshipment Traffic : 13.75 million TEUs

World Merchant fleet ranking: 19th

Rail line (total route/km): 1,665km

Federal Roads (length): 49,935km


Barriers •  Poor physical infrastructure •  Last mile connectivity •  Out-dated institutional

practices •  Time-consuming and

burdensome inspections •  Rules/regulations which are:

•  Arbitrary •  Discriminatory •  Obsolete

•  Low-level skills

Enablers

Logistics Performance: Generic Barriers & Enablers

•  Good physical Infrastructure •  Swift Cargo Clearance •  Swift Customs Clearance •  Business-friendly Regulatory

environment •  Capacity development:

Training & certification •  Rules which are:

•  Simplified •  Harmonised •  Standardised


Initiatives by Malaysian Government in Removal of Performance Barriers/Inhibitors •  Barriers/Inhibitors and Issues Addressed:

•  Physical Infrastructure

– Ports » Reforms/privatisation » National Load Centre

– Shipping » Main Lines/direct services

– Road » Privatisation

– Rail » Double-Tracking

– Air » KLIA/Penang Cargo Centres


Initiatives by Malaysian Government in Removal of Performance Barriers/Inhibitors

•  Barriers/Inhibitors and Issues Addressed:

•  Trade Facilitation – Standardisation/Simplification Documents

» EDI/DagangNet Technologies » OGAs/PIAs

– Customs » Harmonisation

– U-Customs » NSW and ASW 2015

– B2B » Port community system

» PKANet; Port Klang » E-Ports at leading gateway ports



•  Regulatory developments

–  Liberalisation/Market access » Container haulage »  Industrial Policy: Relaxed equity requirements

» Shipping agencies »  Freight Forwarding

» Cabotage liberalisation



•  Regulatory developments

– Administrative » Process flow simplification

»  Licensing of Commercial Vehicles

–  Legislative »  Land Public Transport Commission, 2010 » Competition Commission, 2010

•  Institutional Issues

– Capacity enhancement measures, 2010 – Malaysian Logistics & Supply Chain Council,

2008/2013


The Outcomes/Impact

•  Removing logistics performance barriers Increase GDP Growth and Expand National Trade

•  Improved outcomes have been felt in: •  Improved Performance

–  Faster vessel turnaround time –  Higher crane performance –  Improved capacity/better connectivity

•  Enhanced Productivity –  Ports with optimal utilisation

•  Time savings –  Customs clearance

•  Transparency –  EDI

•  Cost savings –  Cargo clearance

•  Service levels improvements –  Container haulage


Issues Which Need To Be Looked Into

•  Compliance & Commitments Under Asean Framework Agreements on Transport:

–  Multimodal Transport –  Goods in Transit –  Inter –State Transport

•  Obsolete rules/regulations •  Merchant Shipping Ordinance, 1950 •  Hague Rules, 1939 •  Road Transport Act 1987 •  Port Authorities Act 1967

•  New rules/regimes needed •  Multimodal liability regime •  IMO conventions & agreements


Recent Policy Initiatives & Future Direction

•  Malaysian Freight Logistics Agenda

•  2010

•  Developing An Empirical And Diagnostic Base To Support

Strategic Planning For The Freight Logistics Industry •  2013

•  Development Of Logistics & Trade Facilitation Masterplan

•  2014/June

•  National Transport Strategy: The World Bank

•  2014/November


CONCLUSION

Ø  Although much progress has been made by way of public policy initiatives in removing logistics performance barriers and inhibitors, further initiatives still needed to address specific gaps. Ø  The gaps are largely in attending to “soft issues” rather than meeting requirements of physical infrastructure Ø  Addressing these issues would be helped with the prevailing strong awareness among public policy planners on logistics agenda Ø  National Logistics agenda views improvements to logistics “eco-system” as strong enabling platform for overall national development


CONCLUSION

Ø  Initiatives of Economic Planning Unit in the Prime Minister’s Dept., Ministry of Transport and Ministry of International Trade and Industry (jointly chairing the Malaysian Logistics Council) and the Malaysian Productivity Corporation reflect growing importance attached to logistics agenda. Ø  A major task seen in taking logistics agenda to higher level is also need for private sector engagement (providers & users of logistics services), capacity enhancement and greater professionalism & skill development. Ø  Need also to be cognizant of closing deadlines and “logistics readiness” in the light of AEC 2015.

Thank you


Afternoon Tea
