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CHAPTER FOUR: Logistics value chain

Contents: Introduction, Overview on Logistics Value Chain, Key Elements for Value Chain Analysis for

RURB, The Seven-step Sea Freight Transportation Model, Logistics Value Chain Models, Sea Freight

Logistics Stakeholder Analysis, Standard Industrial Classification of Freight Logistics, Logistics Trade

Directory, Appendix

Key Points

1. This chapter has identified the various conceptual frameworks that have been

developed for logistics studies. The frameworks are generally process or

activity-based, focusing on the chain of activities involved in import-export

logistics. The number of different frameworks shows the complexity of logistics

activities, as each framework focuses its own specific purpose.

2. This RURB study focuses on sea freight import-export logistics. It is using the

process-based model that resembles the industry’s perspectives of logistics

activities. As such the industry Seven-step Sea Freight Transportation

framework provides clarity on the analysis of the logistics value chain. To

support value chain analysis, consideration is made on the product-based

perspective of logistics activities.

3. The WTO Trade Facilitation framework’s main purpose is to ensure a common

understanding of trade rules between economies so that goods can move

smoothly and efficiently between them.

4. The World Bank Trading Across Borders framework serves to benchmark

between economies in the import-export sea freight logistics. This particular

benchmark indicator is one of ten indicators to rank economies by the ease of

doing business.

5. Another World Bank benchmarking framework is the Logistics Performance

Indicators that measures and benchmarks logistics quality among economies.

The measures are made from perception studies of freight forwarders in the

import-export activities.

6. The UN/CEFACT Buy-Ship-Pay framework provides a process-based

perspective of the international supply chain. The purpose is to have a model

that can be used as a reference for all parties engaged in the supply chain in

order to assist in harmonization of trade processes and data, use of best

practice, promotion and training.

7. The Frost and Sullivan Framework is specially developed is a snapshot study

of the logistics infrastructures and capacities to analyse the “as-is” logistics

capability of the country. The aim is to propose the strategic development of

the logistics sector in the medium-term.

8. The review of these frameworks enables a compressive stakeholder analysis

to be made. The MISC2008 provides the industrial classification of the logistics

business activities of interest.

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9. The Malaysian Logistics Directory portal provides a large samples of logistics

businesses, while the Malaysian Trade Facilitation portal is able to identify four

categories of stakeholders in sea-freight export-import logistics.

Introduction

Malaysia is a fast developing economy that has been dependent on its capacity to

trade globally. Since the early eighties, until recently, the economic emphasis has been

on industrialisation through the manufacturing industry and the export of

manufacturing. The earlier years of industrialisation was focused on employment

growth through low cost labour intensive industry. As the country achieved full

employment, the continuing growth of the economy was supplemented by imported

foreign labour.

The country also began to focus on higher added value output and the need to improve

the capacity of manufacturing-related services in the Second Industrial Master Plan

(1996-2005). The emphasis was on the Manufacturing++ Strategy1 (Figure 4.1). The

emphasis of the Manufacturing++ Strategy is to encourage the investment into high

technology, high added value industry. It also calls for the development of more

knowledge-based manufacturing-related services industry. Distribution or logistics is

also the focus of Manufacturing++. This strategy continues into the third Industrial

Master Plan (2006-2020).

Being a highly export-oriented economy, Malaysia has a mature export logistics sector.

The emphasis over the last many years has been on the continuous growth of ports

and airports, which are the main across-border trading outlets. The World Bank’s

Logistics Performance Index 2014 puts Malaysia at the top ranking of the upper income

economies. Malaysia is grouped together with many high income economies as a

“logistically friendly” country2.

1 MITI (1996), Second Industrial Master Plan, 1996-2005 – Executive Summary, Ministry of International Trade and Industry, Malaysia, pp. 10-13 2 World Bank (2014), Connecting to Compete 2014 – Trade Logistics in the Global Economy

54

Figure 4.1: IMP2 - Manufacturing++ Strategy

Source: MITI (1996)

Overview on Logistics Value Chain

Logistics is basically concerned with moving physical goods from one location to

another for the purpose of trade. It may be from business to customers within the

country’s borders or across borders. When it involves cross border trade, trades

facilitation becomes crucial to economic growth. Logistics, according to the Council

of Logistics Management3, “is the process of planning, implementing, and controlling

the efficient, effective flow and storage of goods, services, and related information from

point of origin to point of consumption for the purpose of conforming to customer

requirements." Note that this definition includes inbound, outbound, internal and

external movements, and return of materials for environmental purposes.

The logistics value chain4 is one part of an enterprise’s value chain, which includes

such external logistics activities as delivery of raw materials and finished goods, and

also involves such internal logistics activities as production and selling. Logistics is

used to optimize and integrate the resources, while the logistics value chain is used to

design and plan the value-added activities in the logistics process. Figure 4.2 illustrates

a conceptual view of a logistics value chain.

3 Council of Logistics Management, http://www.clm1.org/mission.html , 12 Feb 98 4 Xingjian Zhou (2013), Research on Logistics Value Chain Analysis and Competitiveness Construction for Express Enterprises, American Journal of Industrial and Business Management, 2013, 3, 131-135, (http://www.scirp.org/journal/ajibm)

Continuous Productivity Improvement (High technology emphasis)

IMP-1 Emphasis

Backward integration of value chain

Forward integration of value chain

Product Design

R&D Assembly & Production

Distribution Marketing

55

Figure 4.2: Logistics Value Chain

Source: Zhou (2013)

Import and export procedures largely refer to: "the activities (practices and formalities)

involved in collecting, presenting, communicating and processing the data required for

movement of goods in international trade"5.

Trade facilitation6, which is the simplification and harmonisation of international trade

procedures including import and export procedures, is an important aspect of cross

border trading activities. Trade facilitation is a key policy for customs. Customs has a

major role to play at all levels of facilitation, in particular:

i. helping to define the policy space

ii. drawing up the framework and rules of implementation, and then

iii. putting into place the tools and processes at operational level

The OECD believes that trade facilitation agreements can reduce trade transaction

costs by 13% to 15% in developing countries. However, there are the immediate costs

of implementing measures covered by a trade facilitation agreement. According to the

World Bank, this would cost from $7million to $11million. It is argued that the costs of

not implementing the agreement may be far higher than the immediate implementation

5 European Commission: Trade Facilitation http://ec.europa.eu/taxation_customs/customs/policy_issues/trade_falicitation/index_en.htm 6ITC 2013, WTO Trade Facilitation Agreement – A Business Guide for Developing Countries. International Trade Centre, Geneva

56

costs, in terms of how trade facilitation can contribute to reaching development goals

as illustrated in Figure 4.3.

Malaysia has focused its trade facilitation7 efforts on developing a new agreement on

trade facilitation aimed to address issues relating to:

freedom of transit of goods

fees and formalities connected with importation and exportation

publication and administration of trade regulations

Figure 4.3: Outcome of Trade Facilitation Agreement8

Source: ITC 2013

Such an agreement would ensure reform in multilateral rules and bring benefits in

terms of providing faster and more efficient clearance of goods, reduction in cost of

doing business and more transparent and predictable international trade. These efforts

would contribute to the efficiency of the logistics chain. Trade facilitation in Malaysia is

closely aligned with the World Trade Organisation, WTO definition which states that:

“The Trade Facilitation Agreement contains provisions for expediting the movement,

release and clearance of goods, including goods in transit. It also sets out measures

for effective cooperation between customs and other appropriate authorities on trade

7 MITI: Trade Facilitation: http://www.miti.gov.my/ 8 Note: The ultimate objective of Trade Facilitation Agreement is poverty reduction. In the case of Malaysia, the objective outcome would be achieving a high income status.

57

facilitation and customs compliance issues. It further contains provisions for technical

assistance and capacity building in this area.”

Key Elements for Value Chain Analysis for RURB

There are different logistics chain or models that have been develop for various studies

with their respective defined objectives. These objectives include benchmarking

logistics performance, examining policy implementation and strategy improvement,

facilitating international harmonisation of trade, and so forth.

The purpose of value chain analysis here is to review the regulatory framework and

identify those aspects which have contributed to or stifled the efficiency and growth of

the logistics chain. The focus is on reducing the unnecessary regulatory burdens

(RURBs) imposed on businesses across the logistics chain. These unnecessary

burdens will be identified by getting the perspectives of businesses in the logistics

chain.

The key outputs of this study will be the identification of the unnecessary burdens, and

options to reduce or eliminate them. The options identified will be aimed at both short-

term solutions (quick-wins) and long-term solutions. The recommendations will be

forwarded to the appropriate committees for their decision and action.

As we are concerned with the growth of our trading economy, the study will focus on

the movement of goods across the country’s borders, that is, the import and export of

goods by sea. It is crucial to the analysis that the value chain approach used here has

three key features:

1. The value chain should enable the analysis of the regulatory interventions along

the entire length of the total value chain. This will facilitate identifying on which

stages of the logistics chain the various regulatory regimes and their

implementation impact

2. The processes in the value chain are identified in order to facilitate the analysis

of the flow of physical goods from shippers (exporters) to consignees

(importers). This enables the identification of unique requirements for handling

different types of goods

3. The value chain identifies all the logistics stakeholders – logistics business

players, their customers and suppliers, and the regulators. This enables

identifying how regulation impacts on these stakeholders

The Seven-step Sea Freight Transportation Model

Freight forwarders play the important role of managing the transportation of goods

across the globe for exporters and importers. They provide the services that ensure

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goods to be moved meet all necessary conditions to pass through customs and that all

the necessary paperwork is in order, as well as ensuring that goods are properly

handled. In other words, freight forwarders ensure the safety, efficiency and

effectiveness of cargo packing, handling and delivery as well and managing the

paperwork and customs clearance for exporters and importers.

The involvement of the freight forwarders can be illustrated in the transportation chain

as in Figure 4.4 below9. The involvement starts with the shipper (exporter) until the

goods reach the consignee (importer) of the country of destination.

Figure 4.4: Export-Import Cargo Transportation Chain

Source: Transporteca, https://www.transporteca.com/information/shippingsteps

There are many players involved in the transportation of goods across borders (the

logistics chain). These involve basically five physical and two documentation steps,

starting from the shipper (goods exporter) to the consignee (goods importer). Costs

and time (delays) are key factors in the supply chain. Costs incurred in these steps

and have to be borne by either the shipper or the consignee. As such clear agreement

is crucial to avoid surprises and disruption. Figure 4.5 illustrates the five physical steps

of transportation. The freight forwarder remains the main player who frequently

provides the integrated logistics of managing the other players and the documentation

requirements across the logistics chain from shipper to consignee. In other words, the

freight forwarder arranges and provides all physical services and the management

services for the shipper or the consignee.

Export haulage which is the movement of cargo from the shipper’s to the forwarder’s

premise (origin warehouse) is the first physical part of the logistics chain. The goods

are moved by truck (can be by rail or a combination). The origin warehouse is not only

a temporary storage but also acts as an export consolidation centre in the case of “less

container load” or LCL cargo. There are many different costs involve in the export and

import of goods and who pays for which costs will depend on the sales agreement.

The importer (buyer) may be paying ex-factory or ex-works price and the purchase

9 Transporteca: The Seven Steps of International Shipping, https://www.transporteca.com/information/shippingsteps

59

may be Freight-On-Board (FOB). Agreement may be made under such terms as

Delivery-At-Place (DAP), Delivery-Duty-Paid (DDP), Delivery-Duty-Unpaid (DDU),

costs of goods and insurance (C&I), Cost-Insurance-Freight (CIF), among many

others10. The terms in the import-export agreement will define who pays for which costs

involved.

Figure 4.5: The Seven Steps of International Shipping

Source: Transporteca, https://www.transporteca.com/information/shippingsteps

Export customs clearance is customs formalities imposed to meet regulatory

requirements of the exporting country. Customs clearance is the transaction whereby

a declaration is developed and required documents are submitted to authorities (the

Customs), and is performed by companies holding valid customs licences, so-called

customs house brokers. Many forwarding companies provide customs brokerage

services as part of their total logistics services. The export customs clearance step

must be completed before the cargo can leave the country of origin, and if not

performed by the freight forwarder, often required to be completed before the cargo

enters the forwarders origin warehouse.

Once the cargo reaches the origin warehouse, origin handling can go ahead. It covers

all physical handling and inspections of the cargo from receiving until it is loaded on a

ship in a container. There are many activities involving many parties in origin handling

but the freight forwarder has the responsibility of managing these activities. The

physical activities include receiving the cargo, inspecting them (tallying), planning for

loading, consolidating for LCL cargo, stuffing the container, moving to port for loading

onto ship. Who pays for the work will depend on the agreement made between the

shipper and the consignee.

On the ocean freight the freight forwarder decides on the shipping line to ship from

origin to destination in order to meet the specified timeline for the shipment. Shipper

and consignee do not have any interaction with the shipping line as the forwarder has

contact of carriage for the container with the shipping line. The cost of the ocean freight

will be charged to the shipper or consignee depending on the terms of the agreement.

10 How To Export Import.Com: http://howtoexportimport.com/default.aspx

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There are other surcharges and costs involved such as bunker adjustment factor,

currency adjustment factor, insurance, which will be passed to the shipper of

consignee.

Import customs clearance can typically begin before the cargo arrives at its

destination country. As for export customs clearance, it is a formality where a

declaration is developed and submitted together with relevant documents enabling

authorities to register and levy any customs duty on the shipment. Import customs

clearance is performed by the freight forwarder or an agent of the freight forwarder, or

by a customs broker appointed by the consignee. The import customs clearance

process must be completed prior to the cargo leaving a customs bonded area in the

country of destination. Typically, that means before the cargo leaves the destination

warehouse of the forwarder or the forwarders agent.

As for the destination, cargo handling is also required to meet requirements of the

destination country before it can be released to a consignee. In short, destination

handling includes transfer of the container from the ship to shore and from the port to

the forwarder's destination warehouse. It also includes unpacking of the container and

preparing the cargo for the consignee to collect. Destination handling is covered by

multiple destination charges and always performed by the freight forwarder or an agent

appointed by the freight forwarder. It can be charged to the shipper or consignee, but

will always need to be paid in full before the cargo can be surrendered to the

consignee. Again, if the agreement is that the shipper pay for ocean freight, and the

consignee pay for destination charges, it is in fact the shipper who decides who the

consignee uses to do the destination handling. As discussed for origin charges that

can create some friction or surprises for the consignee who has not planned for it.

Import haulage is the last leg of the transportation is the actual delivery of the cargo

to the consignee. It can either be performed by the freight forwarder or a local

transportation company appointed by the consignee. If this part of the transportation is

being arranged by the shipper, it would normally make sense to use a freight forwarder

which can also arrange for import haulage. The import haulage typically covers

transportation to a specific address, but not unloading from the truck, which is the

responsibility of the consignee.

This transportation model illustrates the crucial logistics processes and the primary

documentation requirements for import and export of goods by sea. The processes will

enable the identification of the key businesses in the logistics chain and then the

regulations and regulatory regimes affecting them.

Cold Chain Logistics

A specialised area in freight logistics is the cold chain. The cold chain refers to the

management of the temperature of perishable products in order to maintain quality and

safety from the point of slaughter or harvest through the distribution chain to the final

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consumer11. A cold chain is a temperature-controlled supply chain. An unbroken cold

chain is an uninterrupted series of storage and distribution activities which maintain a

given temperature range. It is used to help extend and ensure the shelf life of products

such as fresh agricultural produce, seafood, frozen food, photographic film, chemicals

and pharmaceutical drugs. Such products, during transport and when in transient

storage, are called cool cargo. Unlike other goods or merchandise, cold chain goods

are perishable and cannot be stored for indefinite periods of time. They always en route

towards end use or destination, even when held temporarily in cold stores and hence

commonly referred to as cargo during its entire logistics cycle.12 Cold chain logistics

incorporate temperature control (refrigeration) in the normal logistics chain. The major

sectors served are the food and beverages and the bio-pharmaceuticals.13 A typical

cold chain logistics infrastructure is shown in Figure 4.6 below.

Figure 4.6: Cold Chain Logistics Infrastructure

Source: Sapra R. and Joshi S. (2013)

Logistics Value Chain Models

There are many different logistics chain models developed for different purposes of

analyses. In this section an overview examinations of the various models are made.

The WTO Agreement on Trade Facilitation14 is a complex model which involves

and analyses many different aspects of international trade. The simplified framework

showing the various aspects is illustrated as in Figure 4.7. The aspects that have

direct impact on logistics include:

11 Global Cold Chain alliance; http://www.gcca.org/about-us/the-cold-chain/ 12 European Business Journal, Premiere Logistics Netherlands B.V., http://www.european-business-journal.com/premiere_logistics_netherlands_bv/company_news/our_very_own_unit_of_cold_chain_management/ 13 Sapra R. and Joshi S. (2013), Cold Chain Logistics, Welingkar Institute of Management and Research; http://www.slideshare.net/businessdesign2011/cold-chain-logistics?related=1

14 WTO: Implementing the WTO Agreement on Trade Facilitation: http://mpoverello.com/2014/04/29/implementing-the-wto-agreement-on-trade-facilitation/

62

Import, Export and Transport Formalities

Release & Clearance of Goods

Movement of Goods under Customs Control

Border Agency Cooperation

Publication & Availability of Information

Customs Cooperation

The WTO Trade Facilitation Agreement15 is based in four principles or pillars as

illustrated in Figure 4.8. The fundamental principles are transparency, simplification,

harmonization, and standardization. To achieve these principles, full cooperation

between government authorities and with the business community is essential.

Figure 4.7: WTO Agreement on Trade Facilitation Framework (Simplified)

Source: http://mpoverello.com/2014/04/29/implementing-the-wto-agreement-on-trade-facilitation/

15 UNECE, WTO Trade Facilitation Agreement, http://tfig.unece.org/contents/what-involve.htm

63

Figure 4.8: Principles for Trade Facilitation

Source: UNECE, http://tfig.unece.org/contents/what-involve.htm

Transparency within government promotes openness and accountability of a

government's and administration's actions. It entails disclosure of information in a way

that the public can readily access and use it. This information may include laws,

regulations and administrative decisions of general application, budget, procurement

decisions and meetings. Regulatory information should be published and

disseminated, when possible, prior to enforcement to allow parties concerned to take

note of it and make necessary changes. Furthermore, relevant stakeholders and the

general public should be invited to participate in the legislative process, by providing

their views and perspectives on proposed laws prior to enactment.

Simplification is the process of eliminating all unnecessary elements and duplications

in trade formalities, processes and procedures. It should be based on an analysis of

the existing or current practices, the “as-is” situation.

Harmonization is the alignment of national procedures, operations and documents

with international conventions, standards and practices. It can come from adopting and

implementing the same standards as partner countries, either as part of a regional

integration process or as a result of business decisions.

Standardization is the process of developing formats for practices and procedures,

documents and information internationally agreed by various parties. Standards are

then used to align and, eventually, harmonize practices and methods.

Based on these principles the United Nations Centre for Trade Facilitation and

Electronic Business, UN/CEFACT formulated the Buy-Ship-Pay Model to describe

the main processes and parties in the international supply chain. The supply chain

Trade Facilitation Principles Tra

ns

pa

ren

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Sim

pli

fica

tio

n

Harm

on

isa

tio

n

Sta

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The Four Pillars

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ensures that goods are ordered, shipped and paid for while complying with regulatory

requirements and supporting trade security. The Buy-Ship-Pay model identifies the key

commercial, logistical, regulatory and payment procedures involved in the international

supply chain and provides an overview of the information exchanged between the

parties throughout its various steps. The model presents a "top-down" view of the

supply chain linking the detailed "bottom-up" actions derived from the business

requirements specified in the UN/CEFACT standards development process. The

Figure 4.9 illustrates the business processes and transactions that are included in the

Buy-Ship-Pay model. Only the SHIP part is shown with the two top levels. Below that

level, business process views of the named transactions are stored in the model.

Figure 4.9: UN/CEFACT BUY-SHIP-PAY Model

Source: UNCEC, http://tfig.unece.org/contents/buy-ship-pay-model.htm

The model facilitates Business Process Analysis efforts in various ways. It can be used

in the scope phase by providing an overview, i.e. guidelines and schemata at a higher

level. Next, it can be used during the process development or the “to-be modelling” in

the detailed process modelling phase. The model identifies four main business partner

types: Customer, Supplier, Intermediary and Authority. The types or organizations

that make up these four categories, and the roles they play, are described. The Table

4.1 below identifies the main ones.

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Table 4.1: Main Business Partners in International Trade

Customer Supplier Intermediary Authority

Buyer Seller Transport Service Supplier Customs

Importer Exporter Freight Forwarder Environment

Consignee Consignor Bank Agriculture

Ship to Ship from Insurance Provider Standards

Payer Payee Customs Agent Consular

Broker Health

Commission Agent Port

Intervention Board (EU)

Chamber of Commerce

Source: UNCEC, http://tfig.unece.org/contents/buy-ship-pay-model.htm

Logistics Performance Index (LPI): Inefficient logistics raises the costs of trading

and reduces the potential for global integration. This is a hefty burden for developing

countries trying to compete in the global marketplace. Since 2007, the World Bank has

been monitoring the Logistics Performance Index to inform countries on the role of

logistics for growth and the policies to support it in such areas as infrastructure, service

provision, and cross-border trade facilitation.16

Figure 4.10: World Bank LPI Model

Source: World Bank: Connecting to Compete 2014

16 World Bank (2014), Connecting to Compete 2014 – Trade Logistics in the Global Economy

Supply

chain service

delivery

Customs

Infrastructure

Service quality

Timeliness

International shipments

Tracking and tracing

Areas for policy regulations

(Inputs)

Service delivery performance (Outcomes) Time, cost,

reliability

Input and Outcome LP Indicators

66

The World Bank LPI Model is illustrated in Figure 4.10. The LPI analyses countries

in six components (international and domestic):

i. The efficiency of customs and border clearance (“Customs”).

ii. The quality of trade and transport infrastructure (“Infrastructure”).

iii. The ease of arranging competitively priced shipments (“Ease of

arranging shipments”).

iv. The competence and quality of logistics services—trucking, forwarding,

and customs brokerage (“Quality of logistics services”).

v. The ability to track and trace consignments (“Tracking and tracing”).

vi. The frequency with which shipments reach consignees within

scheduled or expected delivery times (“Timeliness”).

The LPI allows 166 countries to benchmark each other on their logistics performance

and thereby provides the basis and incentive to continuously improve the key logistics

component for better economic performance. Based on the LPI, Malaysia is ranked in

the top position of upper middle income economies for 2014 with a LPI score of 3.59

(3.49 in 2012). With the score, Malaysia can be classified as a “logistically friendly”

together with the high income economies. Although the LPI for Malaysia continued to

improve over the last few years, there is still much to be done to ensure that the country

becomes a stable performer as a logistically friendly country. The high income

economies still out performs the upper middle income economies by 30%.

Although the LPI provides useful information and benchmarks, it is based on the survey

of freight forwarders, rather than the shippers and the other logistics players in the

supply chain who have the key interest in the movement of goods. It nevertheless

focuses attention on improving the logistics chain. The country is moving in the right

direction as it continues to focus on soft infrastructure enhancements based on

regulatory reform, and less on basic hard infrastructure investments. It is crucial to

ensure that hard infrastructure is improved as the volume of goods grows as the

economy grows. More important may be the need to improve logistics capacities and

to ensure a balanced growth. The human resource capacities across the logistics chain

continues to be a challenge in the areas of knowledge, skills and numbers. With the

enhancement of the operating systems with information technology, new knowledge

workers are needed to ensure the effectiveness and efficiency of the logistics chain.

A recent study in 2014 conducted by Frost and Sullivan for the Economic Planning

Unit (EPU) on “Developing an Empirical and Diagnostic Base to Support Strategic

Planning for the Freight Logistics Industry” takes the strategic view of the

Malaysian freight logistics industry as consisting of eight distinct components, namely:

1) Air Transport Infrastructure

2) Sea Transport Infrastructure

3) Rail Transport Infrastructure

4) Road Transport Infrastructure

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5) Warehousing

6) Trade facilitation

7) Sabah and Sarawak

8) Others – Halal logistics and ASEAN Economic Community

This study defines logistics as “an ecosystem of economic activities that involves the

sourcing and procurement, assembly and packing, storage, handling and

transportation of freight. Freight logistics activities also involve managing the process

of documentation and information flow between production and consumption points in

the country as well as globally.” Frost and Sullivan Analytical Model is a 5-stage

Modular perspectives of the freight logistics industry17. Figure 4.11 below illustrates

the 5-stage Module.

Figure 4.11: Frost and Sullivan Analytical Model

Source: Frost and Sullivan, 2014

The World Bank methodology on Trading Across Borders18 focuses on regulations

and regulatory practices that impact on the economy, i.e., “whose governments have

managed to create a regulatory system that facilitates interactions in the marketplace

and protects important public interests without unnecessarily hindering the

development of the private sector—in other words, a regulatory system with strong

institutions and low transactions costs.” Specifically, it measures how much time, how

many documents and what it costs to export and import by sea transport. The World

Bank Model is illustrated in Figure 4.12 below. The focus on land and sea

transportation is largely because they are the major modes for the export and import

17 Frost and Sullivan 2014, Developing an Empirical and Diagnostic Base to support Strategic Planning for the Freight Logistics Industry – Final Report, Economic Planning Unit Malaysia 18 World Bank (2013), Doing Business 2014, Understanding Regulations for Small and Medium-size Enterprises, http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-reports/English/DB14-Full-Report.pdf

(5) Strategies for the Development of Freight Logistics Industry

(3) Performance Indicators for Freight Logistics Industry

(4) International Competitiveness of Freight Logistics Industry

(2) Qualitative and Quantitative Assessment of Freight Logistics

(a) Operators and (b) End Users

(1) Profile of Freight Logistics Industry

68

of goods. Export and import through air transport represents relatively a smaller

fraction of the overall volume.

Figure 4.12: World Bank Trading Across Borders Model

Source: World Bank Doing Business 2013

In this analytical framework, the concerns of businesses across the logistics chain are

costs, time (delays), and documentation (information). These three parameters are

key challenges for the management of productivity in logistics from the regulatory

perspective and are significant burdens on businesses.

This Doing Business methodology for trading across borders measures the time and

cost (excluding tariffs) associated with exporting and importing a standardized cargo

of goods by sea transport. The time and cost necessary to complete 4 predefined

stages (document preparation; customs clearance and inspections; inland transport

and handling; and port and terminal handling) for exporting and importing the goods

are recorded; however, the time and cost for sea transport are not included. The World

Bank Doing Business provides snap shots of a selected case to calculate the ranking

score for a country and for Malaysia, Port Klang (West Port and North Port) is used as

the case. The methodology makes two sets of assumptions19.

Assumptions about the traded goods: The traded product travels in a dry-cargo, 20-

foot, full container load. It weighs 10 tons and is valued at $20,000. The product:

Is not hazardous nor does it include military items.

Does not require refrigeration or any other special environment.

19 World Bank Doing Business Methodology (2014), http://www.doingbusiness.org/methodology/trading-across-borders

Time

Cost

Documents

Time

Cost

Documents Full 20-foot container

To import

To export

Import

Export

Port and terminal handling

Customs and border

agencies

Inland transport

69

Does not require any special phytosanitary or environmental safety

standards other than accepted international standards.

Is one of the economy’s leading export or import products

Assumptions about the business: The business:

Is located in the economy’s largest business city. For 11 economies the data

are also collected for the second largest business city.

Is a private, limited liability company.

Does not operate in an export processing zone or an industrial estate with

special export or import privileges.

Conducts export and import activities but does not have any special

accreditation, such as an authorized economic operator status.

Is 100% domestically owned

These assumptions are necessary for comparative ranking across economies at

different levels of development. The measures of documentation, time and costs are

as illustrated in Table 4.2.

Table 4.2: What do the Trading across Borders indicators measure?

Documents required to export and import (number)

Bank documents

Customs clearance documents

Port and terminal handling documents

Transport documents

Time required to export and import (days)

Obtaining, filling out and submitting all the documents

Inland transport and handling

Customs clearance and inspections

Port and terminal handling

Does not include sea transport time

Cost required to export and import (US$ per container)

All documentations

Inland transport and handling

Customs clearance and inspections

Port and terminal handling

Official costs only, no bribes

Source: World Bank, http://www.doingbusiness.org/methodology/trading-across-borders

70

Sea Freight Logistics Stakeholder Analysis

Stakeholder analysis can be analysed from two aspects. The first aspect is the process

or activity of the flow of the goods, which is analysed through the transportation or

logistics value chain. This will identify of the logistics stakeholders for the import-export

trade and the logistics activities within the country. The key stakeholders are

businesses and regulators. The other aspect concerns the types or characteristics of

product being handled. The product types will define the management, handling,

storage and transportation requirements of the cargo. Table 4.3 summarises the

analysis framework for stakeholder.

Table 4.3 Analysis Framework

Aspect Framework Stakeholder analysis

Data collection & regulatory analysis

Process & activity

Transportation/Logistics Value Chain

Businesses

Trade associations

Shippers

Forwarders

Hauliers

Ports

Intermediaries

Supporting industries

Regulators

others

Acts & regulations

Regulatory regimes

Regulators

Standards

Guidelines

Reports

Statistics

News and blogs

Web reviews

Public consultation

Expertise inputs

others

Product Types of cargo/services

Dangerous goods

Dry bulk

Liquid bulk

Containers

Break bulk

Ro-ro

Special others

Source: Analysis framework

And every product requires its own method of transport, or packaging. Five types of

cargo can be distinguished: container cargo, liquid bulk, dry bulk, break bulk and ro-

ro.

Container cargo form the most integral part of the entire shipping industry, trade, and

transport. The shipping containers are the structures that store various kinds of

products that need to be shipped from one part of the world to another. Moving

containers protect the contents on the long journeys they make and ensure they make

it in one piece. Depending on the type of products to be shipped or the special services

needed from them, container units may vary in dimension, structure, materials,

construction etc. Various types of shipping containers are being used today to meet

requirements of all kinds of cargo shipping. Marine Insights

(http://www.marineinsight.com) lists 16 types of container units and designs for

shipping cargos, the most common being the ISO dry storage container. The others

are flat rack, open top, tunnel, open side storage, double doors, refrigerated ISO,

71

insulated or thermal, cargo storage roll, tanks, half height, car carriers, intermediate

bulk shift, special purpose, and swap bodies containers20.

The refrigerated ISO containers temperature regulated shipping containers that

always have a carefully controlled low temperature. They are used for shipment of

perishable substances like fruits and vegetables over long distances.

Liquid bulk21 a commodity carried in specially built vessels, loaded and unloaded via

pipelines. The liquid products which are often transported on big tankers or through a

pipeline to the next destination. This includes liquid chemicals, petroleum products and

crude palm oil.

Dry bulk refers to grain, coal, iron ore, cement, sugar, salt and sand. They are not

packaged separately, but transported in large quantities in the hold of a ship, wagon

or lorry.

Break bulk cargoes, such as iron, steel, timber, plywood, paper, sawn wood, bags of

cocoa, rolls of steel, machineries and parts, are all products that can be transported in

a container or simply put on a vessel. As the name suggests, it breaks easily. To be

able to lift this general cargo, it is often packaged on pallets, in crates or racks. A crane

or forklift truck can easily load or discharge the goods.

Ro-ro refers to 'roll on / roll off'. This name explains how the cargo is discharged and

loaded. This concerns cargo that can be driven which is only done by especially trained

drivers. Ro-ro is used for cars, busses, trucks, agricultural vehicles and cranes. To

transport as many of these vehicles in one go, enormous ro-ro vessels have been built.

Dangerous goods or hazardous materials: The handling, transportation and storage

of hazardous materials or dangerous goods have special safety, health and

environmental requirements. Dangerous goods will include prohibited products such

as dangerous drugs. Hazardous materials is defined as “A substance or material,

including a hazardous substance, which has been determined by the Secretary of

Transportation to be capable of posing an unreasonable risk to health, safety and

property when transported in commerce, and which has been so designated.”22 This

means any material that, because of its chemical properties, may cause injury, loss of

life, damage to property or the environment if involved in an accident during

transportation. A minor transportation accident can quickly escalate into a major

catastrophe when hazardous materials are involved. There are basically two sets of

regulations covering the shipping of hazardous materials:

a. International Maritime Dangerous Goods Code regulations and

b. various local regulations governing production, handling, transportation,

storage and sales of hazardous materials

20 Marine Insights; http://www.marineinsight.com/ 21 Port of Antwerp; http://www.portofantwerp.com/en/types-goods, North Port, Klang; http://www.northport.com.my/ 22 The U. S. Department of Transportation definition of hazardous materials

72

The shipper or their agent is responsible for having their Hazardous Material cargo in

compliance with all the regulations at the time the cargo is offered for transportation (at

the time of pick up from the shipper’s facilities, or at the time of delivery to the carrier’s

terminal). The carrier’s (highway, ocean, rail, air) responsibility is to determine that the

shipper has, in fact, complied to the regulations before the carrier transports the cargo.

A signed “shipper’s certification” statement is required.23

To achieve the harmonisation of local regulations with international codes, the Ministry

of International Trade and Industry (MITI) acts as the principal facilitator on the

Globally Harmonized System (GHS) implementation24. The Globally Harmonized

System of classification and labelling of chemicals is an internationally agreed-upon

system, created by the United Nations.

Dangerous goods are grouped into different classes and subdivisions. There are nine

main classes listed as Class 1 to Class 9 with some classes having further

subdivisions. The ASEAN Protocol for Dangerous Goods25 listed the classes as

follows:

i. Class 1: Explosives

ii. Class 2: Division 2.1: Flammable gases

Division 2.2: Non-flammable, non-toxic gases

Division 2.3: Toxic gases

iii. Class 3: Flammable liquids and liquid desensitized explosives

iv. Class 4: Division 4.1: Flammable solids, self-reactive substances

and solid desensitized explosives

Division 4.2: Substances liable to spontaneous

combustion

Division 4.3: Substances which in contact with water emit

flammable gases

v. Class 5: Division 5.1: Oxidizing substances

Division 5.2: Organic peroxides

vi. Class 6: Division 6.1: Toxic substances

Division 6.2: Infectious substances

vii. Class 7: Radioactive material

viii. Class 8: Corrosive substances

ix. Class 9: Miscellaneous substances and articles

23 Malaysia Shipping “Hazardous material handling for transportation”; http://malaysiashipping.info) 24 MITI, Status on GHS (Globally Harmonized System) implementation (As at November 2012); http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_32bac800-c0a8156f-34c634c6-b5a59050 25 ASEAN Protocal Dangerous Goods; Article 3 –Classification; http://www.asean.org/communities/asean-economic-community/item/protocol-dangerous-goods

73

Standard Industrial Classification of Freight Logistics

At the industry level, the movement of goods and materials in freight logistics is

classified into four modes of transportation: air, sea, rail, pipeline and road. The

Malaysian Standard Industrial Classification 2008 (MSIC2008)26 codes these activities

under the heading Transportation and Storage in Section H. Although pipeline is in the

classification, this is not a major logistics concern in this study, and as such is left out

of the analysis. This Section H includes the provision of passenger or freight transport,

whether scheduled or not, by rail, pipeline, road, water or air and associated activities

such as terminal and parking facilities, cargo handling, storage, etc. Included in this

section is the renting of transport equipment with driver or operator, and postal and

courier activities.

This section excludes maintenance and repair of motor vehicles and other

transportation equipment, the construction, maintenance and repair of roads, railroads,

harbours, airfields, as well as the renting of transport equipment without driver or

operator. The Table 4.4 below gives the classifications of activities for freight transport

together with the MSIC2000 codes.

Table 4.4: MSIC 2008: TRANSPORTATION AND STORAGE27 Class Item Description MSIC2000

DIVISION 49: LAND TRANSPORT AND TRANSPORT VIA PIPELINES Group 491: Transport via railways

4912 Freight rail transport Excludes:

(a) storage and warehousing, see 52100 (b) freight terminal activities, see 52211 (c) cargo handling, see 5224

49120 Freight transport by inter-urban, suburban and urban railways

60100p

DIVISION 49 : LAND TRANSPORT AND TRANSPORT VIA PIPELINES Group 492 : Transport via roads

4923 Freight transport by road Includes:

(a) logging haulage (b) stock haulage (c) refrigerated haulage (d) heavy haulage (e) bulk haulage including haulage in tanker trucks (e.g. palm oil tanker) (f) haulage of automobiles (g) transport of waste and waste materials, without collection or disposal (h) furniture removal (i) renting of trucks with driver (j) freight transport by man or animal-drawn vehicles (k) transport of water, liquids, etc. by trucks Excludes:

(a) log hauling within the forest, as part of logging operations, see 024 01 (b) distribution of water by trucks, see 36001 (c) operation of terminal facilities for handling freight, see 52211 (d) crating and packing services for transport, see 52299

26 Department of Statistics Malaysia, Version 1.0, Malaysian Standard Industrial Classification 2008 27 Transportation activities via pipelines has not been included in this table.

74

(e) post see 53100 and courier activities, see 53200 (f) waste transport as integrated part of waste collection activities, see 3811, 3812

49230 Freight transport by road 60230

DIVISION 50 : WATER TRANSPORT Group 501 : Sea and coastal water transport

5012 Sea and coastal freight water transport Excludes: (a) storage of freight, see 52100 (b) harbour operation and other auxiliary activities (e.g. docking, pilot age, lighter age, vessel salvage), see 5222 (c) cargo handling, see 5224

50121 Transport of freight overseas and coastal waters, whether scheduled or not

61102

50122 Transport by towing or pushing of barges, oil rigs 61103

DIVISION 50 : WATER TRANSPORT Group 502 : Inland water transport

5022 Inland freight water transport Includes: transport of freight inside harbours and ports

50220 Transport of freight via rivers, canals, lakes and other inland waterways Includes: transport of freight inside harbours and ports

61202

DIVISION 51 : AIR TRANSPORT Group 512 : Freight air transport

5120 Freight air transport

51201 Transport freight by air over regular routes and on regular schedules

62109

51202 Non-scheduled transport of freight by air Includes:

(a) launching of satellites and space vehicles (b) space transport

62209p

51203 Renting of air-transport equipment with operator for the purpose of freight transportation

62201p

DIVISION 52 : WAREHOUSING AND SUPPORT ACTIVITIES FOR TRANSPORTATION Group 521 : Warehousing and storage

5210 Warehousing and storage Includes:

(a) operation of storage and warehouse facilities for all kind of goods: operation of grain silos, general merchandise warehouses, freight, refrigerated warehouses, storage tanks, etc. (b) storage of goods in foreign trade zones (c) blast freezing Excludes:

(a) parking facilities for motor vehicles, see 52213 (b) operation of self-storage facilities, see 68102 (c) rental of vacant space, see 6810

52100 Warehousing and storage services 63020

DIVISION 52 : WAREHOUSING AND SUPPORT ACTIVITIES FOR TRANSPORTATION Group 522 : Support activities for transportation

5221 Service activities incidental to land transportation Excludes: cargo handling, see 5224

52211 Operation of terminal facilities Includes: operation of terminal facilities such as railway stations, bus

stations, stations for the handling of goods, freight terminal activities, etc.

63039p, 63031

52212 Towing and road side assistance Excludes: maintenance and repair of motor vehicles with towing

services, see 45201

50201p, 50202p, 60100p

75

52213 Operation of parking facilities for motor vehicles (parking lots) Excludes: parking meter coin collection services, see 82990

630 32

52214 Highway, bridge and tunnel operation services 63033

52219 Other service activities incidental to land transportation n.e.c. Excludes: liquefaction of gas for transportation purposes, see 19201

63039p

5222 Service activities incidental to water transportation Excludes:

(a) cargo handling, see 5224 (b) operation of marinas, see 93292

52221 Port, harbours and piers operation services Includes: navigation, pilotage and berthing activities

63035

52222 Vessel salvage and refloating services 63034

52229 Other service activities incidental to water transportation n.e.c.(3) Includes: lighterage and lighthouse activities

63039p

5223 Service activities incidental to air transportation Excludes:

(a) cargo handling, see 5224 (b) operation of flying schools, see 8530, 8549

52231 Operation of terminal facilities (2) Includes: the operation of airway terminal, etc.

63036p

52232 Airport and air-traffic-control activities 63036p

52233 Ground service activities on airfields 63036p

52234 Fire fighting and fire-prevention services at airports 63036p

52239 Other service activities incidental to air transportation n.e.c. 63036p

5224 Cargo handling Includes: the loading and unloading of goods or passengers' luggage

irrespective of the mode of transport used for transportation and stevedoring services Excludes: operation of terminal facilities, see 5221, 5222 and 5223

52241 Stevedoring services 63011

52249 Other cargo handling activities n.e.c. 63019

5229 Other transportation support activities Includes: pickup and delivery of goods and grouping of consignments – Integrated system Excludes:

(a) courier activities, see 53200 (b) provision of motor, marine, aviation and transport insurance, see 65 12 (c) activities of travel agencies, see 79110 (d) activities of tour operators, see 79120 (e) tourist assistance activities, see 79900

52291 Forwarding of freight Includes:

(a) arranging or organizing of transport operations by rail, road, sea or air (b) organizing of group and individual consignments (c) issue and procurement of transport documents and waybills (d) activities of customs agents (e) activities of sea-freight forwarders and air-cargo agents

63049p, 63091p, 63092p, 63099p

52292 Brokerage for ship and aircraft space 63092p, 63099p

52299 Other transportation support activities n.e.c. Includes:

(a) goods-handling operations (e.g. temporary crating for the sole purpose of protecting the goods during transit, uncrating, sampling, weighing of goods) (b) packaging activities incidental to transport

63092p, 63099p

76

DIVISION 53 : POSTAL AND COURIER ACTIVITIES Group 531 : Postal activities

5310 Postal activities Excludes: postal giro, postal savings activities and money order

activities, see 64 19

53100 National postal services Includes: the pick-up, transport and delivery (domestic or international)

of mail and parcels. The activity includes sale of postage stamps, collection of mail and parcels from public letter boxes or from post offices and distribution and delivery. Also includes such activities as mail sorting, mailbox rental, poste restante, etc.

64110p

5320 Courier activities Excludes: transport of freight, see (according to mode of transport)

49120, 49230, 5012, 50220, 5120

53200 Courier activities other than national post activities (2) Includes: the pick-up, transport and delivery of letters and mail-type,

usually small, parcels and packages. One or more modes of transport may be involved and the activity may be carried out with either self-owned (private) transport media or via public transport Excludes: all postal activities carried out by Pos Malaysia Bhd. which

are classified in Item 53100 National postal services

64120

Source: MSIC 2008

The MSIC2008 codes enables the identification of the logistics activities and

businesses of interest in this study. However, at the local business level, the logistics

business activities have their own taxonomy or classification of business.

Logistics Trade Directory

The Malaysia Logistics Directory classification (msialogistics.com)28 lists the

logistics industries into four categories; sea freight, land and rail transport, air

freight and supporting industries. This logistics directory is a comprehensive list of

freight and shipping services directory in Malaysia and the directory website is

managed by a private entity - Marshall Cavendish (Malaysia) Sdn. Bhd. The directory

is also supported by the major logistics associations in the country - the MAFF, JoFFA,

PFFA, SFFLA and the AMH. This is a practical directory for identifying the key logistics

businesses and companies in the country.

The logistics businesses or companies are listed into these four categories as

illustrated in Table 4.5 below. There are five categories of businesses for sea freight

logistics, six for land and rail transport and six of air freight logistics. These logistics

businesses are supported by 112 different supporting logistics industries. There is a

total of 3078 companies listed in msialogistics.com, http://www.msialogistics.com.

28 Malaysian Logistics Directory (msialogistics.com), A comprehensive list of freight and shipping services directory in Malaysia; http://www.msialogistics.com/indexMLD.aspx

77

Table 4.5: Malaysian Logistics Directory (msialogistics.com) Classification Sea Freight Logistics (5 records)

1. Containerised freight services (7 records) 2. Ports of Malaysia (sea and inland) (29) 3. Shipping lines/agents (124)

4. Sea freight forwarding agents (144) 5. Dry ports (0)

Land & Rail Transport (6 records)

1. Container hauliers (22 records) 2. Movers (51) 3. Lorry transport (402)

4. Refrigerated transport (5) 5. Railway services (6) 6. Railway signalling equipment (1)

Air Freight Logistics (6 records)

1. Air freight forwarding agent (148 records) 2. Airports – Domestic (10) 3. Airport Ground Handling Agents (3)

4. Airports – International (5) 5. Airlines (25) 6. Courier Services (27)

Supporting Industries (112 records) ■Airport Equipment Parts and Supplies (13 records) ■Banks (32) ■Blasting contractors (9) ■Bunker Fuel (1) ■Asset tracking systems (7) ■Boilers - Distributers and Manufacturers (6) ■Bunker Suppliers (8) ■Boiler repairing and cleaning (4) ■Bar code equipment (10) ■Cabins (15) ■Battery - repairing and rebuilding (16) ■Boxes – corrugated and fibre (22) ■Canvass – lorry (2) ■Battery – storage, wholesalers & manufacturers (9) ■Boxes – insulation, metal, paper, wooden (11) ■Chemical cleaning – industrial (14) ■Bio-pharma packing (1) ■Bulk handling (10) ■Cleaning equipment (3) ■Container lifting equipment (10) ■Cranes accessories and parts (6) ■Communication equipment & supplies (9) ■Containers – cargo & freight (40) ■Diving & undersea services (0) ■Computer software – freight & forwarding (39) ■Container leasing (0) ■Dockboards & ramps (1) ■Computer software consultancy (1) ■Container maintenance & repairs (4) ■Electronic commerce services (4) ■Container desiccant – silica gel (4) ■Conveyors & conveyor systems (1) ■Event organiser – air show (1) ■Container hauliers (5) ■Cranes (44) ■Generators (13) ■Integrated logistics solutions (21) ■Forklifts (43) ■Free commercial & industrial zone (3) ■Fenders (2) ■Fire protection systems (6) ■Fumigation (21) ■Gas generators (2) ■Inspection services (9) ■Insurance (35) ■Fleet management systems (14) ■Hand trucks & trolleys (1) ■Freight forwarding agents (411) ■Hardware (19) ■Heat exchangers (2) ■Hoists (15); Lawyers (2) ■Labour contractors (0) ■Leasing services (2) ■Lubricants (22) ■Marine repairs (8) ■Machineries (8) ■Marine contractors (10) ■Marine engineering (5) ■Marine engines (0) ■Marine equipment & supplies (20) ■Marine propellers (0) ■Material handling equipment (68) ■Navigational equipment & supplies (2) ■Packaging materials (22) ■Packing & crating services (10) ■Pallets & skids (37) ■Pest control (1) ■Piracy reporting centre (1) ■Racks (21) ■Radio communication equipment & systems (13) ■Relocation & storage services (15) ■Safety equipment & supplies (13) ■Scrap metal (13) ■Security services (12) ■Shelving – industrial & commercial (3) ■Ship brokers (5) ■Ship chandlers (5) ■Ship classification societies (2) ■Ship management (4) ■Ship builders & repairers (14) ■Shipowners (0) ■Shipping equipment & suppliers (33) ■Slings (1) ■Stevedoring contractors (3) ■Strapping equipment (5) ■Surveyors – marine (16) ■System integrator (1) ■Transport equipment (70) ■Truck – bodies (18) ■Truck – parts (11) ■Truck – repairing & services (3) ■Truck dealers (140 ■Truck distributors (19) ■Truck mounted cranes (0) ■Tugs, barges & salvage companies (7) ■Tyre machinery (2) ■Tyre manufacturers & distributors (38) ■Warehouses – public (40) ■Warehouses equipment & supplies (9) ■Warehouses services – bonded (9) ■Warehouses services – cold storage (6) ■Warehouses services – general (46) ■Waste reduction & disposal services (16) ■Wheels & rims (3) ■Wire ropes (8).

Source: msialogistics.com: http://www.msialogistics.com/indexMLD.aspx

Malaysia Portal for Trade Facilitation: myTRADELINK29: The myTRADELINK30 is

a Malaysia's trade facilitation web-portal that connects trading communities with the

relevant government agencies and also other businesses involved in global trade and

logistics. An initiative of the Malaysian Government, led by the Ministry of Finance of

29 myTRADELINK: http://www.mytradelink.gov.my/aboutus 30 Note that myTRADELINK portal has shut down on 7th February 2014 and their e-services are now available at Dagang.Net website; http://www.dagangnet.com/

78

Malaysia - and operated by Dagang Net Technologies Sdn Bhd. It is a one-stop single

window where the trade community can exchange documents required to fulfil

regulatory trade processes for import, export or transit via the Internet.

Apart from facilitating trade transactions, myTRADELINK serves as a trade information

hub and allows users to streamline their transactional activities. The portal is able to

provide the listings of main stakeholders of the import-export logistics communities.

The communities identified are in four different categories as:

Trade associations

Port operators (sea and inland ports)

Port authorities

Permit issuing agencies

The trade associations are those logistics players involved in cross border trading

activities for air, land and sea trade. These are listed in the Appendix as Table 4.6.

Port Operators

Before the advent of port privatisation with the Port Privatisation Act 1990, the ports in

the country were operated and managed by ports authorities themselves. With the new

Act many of the ports have been privatised and they are operated by private companies

and holding companies listed in the stock market. Some of the smaller ports especially

those located in East Malaysia have not been privatised and are still being operated

by the port authorities themselves. The list of ports operators and the ports authorities

are listed in the Appendix as Tables 4.7 and 4.8.

Permits Issuing Agencies

Many products are classified as controlled products that will require import permits to

bring into the country. There are various categories of these products and they are

controlled for various reasons. For example, there are products which are of strategic

interest to the country and under the Strategic Trade Act, the approval has to be

obtained from the Ministry of International Trade and Industry, MITI. There are

altogether 12 ministries involved in dealing with controlled products and the various

agencies or divisions under them are responsible for issuing the necessary permits for

such imports. There are the permit issuing agencies (PIA) and Table 4.9 in the

Appendix shows the list of them.

79

Appendix:

Table 4.6: Import-Export Trade Associations (as of 31 August 2014)

No. Name & address Contact

1 Airfreight Forwarders Association of Malaysia

(AFAM)

16-B, Level 2

Jalan Kemuja, Bangsar Utama

59000 Kuala Lumpur

Mr. Walter Culas, Chairman

6012-208 2464/03 2284 2000

chairman@afam.org.my

www.afam.org.my

2 Central Region Shipping Association (CRSA)

No 149A, 149B, 151B,

Persiaran Raja Muda Musa

42000 Port Klang, Selangor

Mr Santhasagaran A/L Kannu

President

03 31673830

crsa@mega-wan.com

3 Conference of Asia Pacific Express Carriers

(CAPEC)

DHL Express (M) Sdn Bhd, Level 27, Menara TM,

Jalan Pantai Baharu, 59200 Kuala Lumpur

En Kamarul Azman, President

03 2241 8550

Kamarul.Azman@dhl.com

4 Ejen Penghantaran Sandakan

Peti Surat 1735, 90702 Sandakan, Sabah

Mr Loo Yat Kiang, President

019-833 6228/089 220331

looyatkiangkiang@yahoo.com

5 Federation of Malaysia Manufacturers

Wiama FMM No 3, Persiaran Dagang PJU 9

Bandar Sri Damansara

52200 Kuala Lumpur

Tan Sri Datuk Yong Poh Kong

President

03 62761211

president@fmm.org.my

www.fmm.org.my

6 Federation of Malaysian Freight Forwarders

(FMFF)

Wisma SFFLA,

No 23, Jalan Cemerlang

42000 Port Klang, Selangor

Mr Alvin Chua Seng Wah

President

alvin@sacjb.po.my

03 31653082

7 Johor Freight Forwarders Association (JOFFA)

Wisma Joffa No 71,

Jalan Jaya Mas 1 Taman Jaya Mas

81300 Skudai Johor

Mr Toon Teng Fatt, President

07 5125900/01

joffa@tm.net.my

www.joffa.com

8 Johor Port Shipping and Forwarding Association

(JPSFA)

Wisma JPSFA, 19A Jalan Rosmerah 2/5,

Taman Johor Jaya, 81100 Johor Bahru

Mr Michael Cheah, President

012-7807128/07 3568531

president@jpsfa.com

9 KK Forwarding Agents Association

Lot 16, Block D, Lorong Buah Salak 3

Hiong Tiong Industry Centre, 11.5 Kilometer Jalan

Tuaran, 88450 Kota Kinabalu, Sabah

Mr Johnson Dai, President

6012-208 2464/088 388275

borneotl@streamyx.com

10 Labuan Logistics Association

AB Enterprise, SU 3414 Jalan Kolam

P.O Box 75, 87008 Wilayah Persekutuan Labuan

Mdm Prunella Phoong,

President

087 422902

prunella@ablabuan.com

11 Malaysian Shipowners' Association

F1/18 Level 1 Citypoint, Kompleks Dayabumi,

Jalan Sultan Hisyamuddin, 50050 Kuala Lumpur

En Nordin Mat Yusoff,

Chairman

03 22752136

12 North Malaysia Shipping Agent Association

(NMASA)

Mr Franco Ong, President

04-261 6287

80

c/o Pantas Freight Services Sdn Bhd

No 2-5-19, Harbour Trade Centre

GAT Lebuh Macallum, 10300 Penang

franco@penfrt.com

13 Padang Besar Forwarding Association

Yong Seng Chan, No 7 Jalan Station

Padang Besar 02100 Perlis

Mr Tan Wei Chang, President

04 9490239

ysc_my@tm.net.my

14 Penang Freight Forwarders Association (PFFA)

Block A Unit 9, MAS Air Cargo Complex

Penang International Airport, Jalan Garuda

11900 Penang

Mr Krishnan Chelliah, President

04 6440514

exe.secretary@pffa.org.my

15 Perak Freight Forwarders Association

Lot 25886 Gudang KTMB, Jalan Tun Abd Razak

30100 Ipoh Perak

Mr Poon Yoke Sang, President

05 5270268

yspoon.transocean@gmail.com

16 Persatuan Perkapalan & Penghantaran

Pelabuhan Kuantan

Aras Marine Services Sdn Bhd, Lot 4.2 Bangunan

Perdagangan, Lembaga Pelabuhan Kuantan

26080 Kuantan

En Muzamil Abdul Rahman

President

012 9837456 / 09 5833150

jomktn09@stramyx.com

17 Persatuan Agen Penghantaran Bukit Kayu Hitam

D/A Utara Forwarding Agency S/B

No 2 Seri Temin

06050 Bukit Kayu Hitam, Kedah Darul Aman

En Mohd Johari B Sukaimi

Chairman

04 9222155

mjsufa@yahoo.com

18 Persatuan Agen Perkapalan & Penghantaran

Pelabuhan Terengganu

PT 10734 Aras 1, Taman Chukai Utama, Fasa 4,

Jalan Jubang Kurus Chukai, 24000 Terengganu

En Mat Nawi Mohd Taib,

President

09 862 3540/ 3543/ 3544

012 9760570

nawi@cseworldwide.com

19 Persatuan Pengusaha Logistik Bumiputra

Wisma SA, No.50, Jalan Anggerik

Mokara 31/47, Seksyen 31 Kota Kemuning,

40460 Shah Alam, Selangor Darul

Dato' Samsudin Abd Rahman

Chairman

03-5125 0015 / 03-5125 0186

din1220@tm.net.my

samsudin@sakargo.com.my

20 Sarawak Forwarding Agencies Association

Lot 8704, 1st Floor Section 64

Jalan Pending, 93450 Kuching Sarawak

Mr Joseph Chung, President

082 484778 / 019 8862323

21 Selangor Freight Forwarders & Logistics

Association (SFFLA)

Wisma SFFLA, No 23, Jalan Cemerlang

42000 Port Klang, Selangor

Mr Alvin Chua Seng Wah,

President

03 31684363

alvinchua@sffla.com

22 Shipping Association Malaysia (SAM)

C/O No 7, Jalan Jurutera U1/23

Section U1 Hicom Glenmarie Industrial Pak

40150 Shah Alam, Selangor

Mr Ooi Lean Hin, Chairman

03 78832600 / 77293778

ooilh@evergreen-

marine.com.my

23 Tawau Forwarding Agent Association

C/O Perkhidmatan Umum Forwarding Agent

Jalan Dunlop P.O Box No 2063

91045 Tawau Sabah

013 8932002

Source: myTRADELINK; http://www.mytradelink.gov.my/trade-associations

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Table 4.7: Port Operators (as of 31 August 2014)

No Company name (port) & address CEO contact

Bintulu Port Sdn Bhd (Bintulu Port) Lot 15, Block 20, Kemena Land District 12th Mile,, Tanjung Kidurong Road P.O. Box 996, 97008 Bintulu Sarawak.

Managing Director: En Mior Ahmad Baiti Mior Lub Ahmad (086) 251001/20 http://www.bpsb.com.my/

Johor Port Berhad (Johor Port Tanjung Pelepas) JOHOR PORT BHD P.O. Box 151, 81707 Pasir Gudang, Johor

Executive Director: En.Abdul Khalid Lal Khan 07-2535888 http://www.johorport.com.my

Westport (M) Sdn Bhd (West Port) P.O. Box 266, Pulau Indah, 42009 Port Klang, Malaysia

Executive Chairman: Tan Sri Datuk G. Gananalingam 03-31694000 / 31694200 info@westportmalaysia.com.my http://www.westportmalaysia.com.my

Kuantan Port Consortium Sdn Bhd (Kuantan Port) Wisma KPC, Km 25, Tanjung Gelang, P.O.Box 199, 25720 Kuantan, Pahang.

Chief Operating Officer: Mr. Wong Soon Fah 09-5833205 http://www.kuantanport.com.my/

Langkawi Port Sdn Bhd (Dermaga Tanjung Lembung) Kompleks Dermaga Tanjung Lembung, Bukit Malut, Mukim Ulu Melaka 07000 Langkawi, Kedah

Muhd Nasir Hj Abdul Aziz 04-9665905/9665915 nasir@langkawiport.com.my

Lumut Maritime Terminal Sdn Bhd (Lumut Maritime Terminal) Pulau Lekir Satu, Jalan Teluk Rubiah, 32040 Sri Manjung, Perak

CEO: En. Amin Halim Rasip 605-6889166 general@lumutport.com

Pelabuhan Tanjung Pelepas Sdn Bhd (Port of Tanjung Pelepas) Bangunan Pentadbiran Pelabuhan Jalan Pelabuhan Tanjung Pelepas TST 507, 81560 Gelang Patah Johor Darul Takzim

Chief Executive Officer: En Harun Johari 07-5042222

Penang Port Sdn Bhd (Penang Port) No.1. King Edward Place, Georgetown, 10300 Penang

Managing Director: YBhg Dato' Ahmad Ibnihajar 04-210 2211 info@penangport.com.my http://www.penangport.com.my

Pengkalan Bekalan Kemaman Sdn Bhd (Kemaman Supply Base) Bangunan Dermaga Timur, Telok Kalong, P.O.Box 66, 24000 Kemaman, Terengganu

609-8631590, 09-8631707

Northport (M) Berhad (North Port) P.O Box 234, Jalan Pelabuhan 42009 Port Klang, Selangor

CEO / Managing Directo: YBhg Dato' Basheer Hassan 603-31698888 www.northport.com.my

Syarikat Perkhidmatan Pelabuhan Gabungan Sdn Bhd (Pelabuhan Tanjung Bruas)

Port Manager: Mr.Chua Yew Ling 06-3511766

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MALACCA PORT, Pelabohan Tanjung Bruas, Tanjung Kling, 76400 Malacca

@Kuching Port Authority (Kuching Port) Jalan Pelabuhan, P.O. Box 530, 93710 Kuching, Sarawak

General Manager: Mdm Liu Mui Fong 082-482144

@Miri Port Authority (Miri Port) Jalan Miri Port, Kuala Baram Industrial Estate, Kuala Baram, P.O. Box 1179 98008 Miri, Sarawak

General Manager: Mr.Shebli Bin Hairai 085-609009

@Rajang Port Authority (Sibu/Sarikei/ Bintangor) Sibu

General Manager: Mr.Chong Siew Yang 084-319009

@Sabah Port Authority (Kota Kinabalu/ Sandakan/Tawau/ Sepangar Bay/Dahat Datu/Kunak Kudat) Sabah Ports Authority Building, Jalan Tun Fuad, Tanjong Lipat, 88617 Kota Kinabalu

General Manager: En Ramli Amir 088-256155

@ Note: These Authorities are also operating the ports. Source: myTRADEINK; http://www.mytradelink.gov.my/port-operators

Table 4.8: Port Authorities

No. Authority (port) & address CEO & contact

Bintulu Port Authorities (Bintulu Port) Lot 15, Block 20, Kemena Land District, 12th Mile, Tanjung Kidurong Road P.O. Box 996, 97008 Bintulu Sarawak.

Managing Director: En Mior Ahmad Baiti Mior Lub Ahmad (086) 251001/20 http://www.bpsb.com.my

Johor Port Authority (Johor Port Tanjung Pelepas) No 6A, 1-8A1, Jalan Bandar Puat Perdagangan 81700 Pasir Gudang, Johor

07-2517721

Kemaman Port Authority (Kemaman Port) Bangunan Dermaga Timur, Telok Kalong, P.O.Box 66, 24000 Kemaman, Terengganu.

609-8631590, 09-8631707

Kuantan Port Authority (Kuantan Port) Wisma KPC, Km 25, Tanjung Gelang, P.O.Box 199, 25720 Kuantan, Pahang.

Executive Vice Chairman: Dato' Shamsudin Md Dubi 09-5833205 http://www.kuantanport.com.my/

Kuching Port Authority (Kuching Port) Jalan Pelabuhan, P.O. Box 530, 93710 Kuching, Sarawak

General Manager: Mdm Liu Mui Fong 082-482144

Marine Department (Dermaga Tanjung Lembung) Pejabat Pelabuhan Tanjung Lembung 07000 Langkawi

604-9666134 ppkuh@marine.gov.my

Miri Port Authority (Miri Port) Jalan Miri Port, Kuala Baram Industrial Estate, Kuala Baram P.O. Box 1179 98008 Miri, Sarawak

General Manager: Mr.Shebli Bin Hairai 085-609009

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Penang Port Commission (Penang Port) PENANG PORT SDN BHD No.1. King Edward Place, Georgetown, 10300 Penang

Managing Director: YBhg Dato' Ahmad Ibnihajar 04-210 2211 info@penangport.com.my http://www.penangport.com.my

Port Klang Authority (Port Klang) Mail Bag Service 202, Jalan Pelabuhan, 42005 Port Klang

03-31688211 http://www.pka.gov.my

Rajang Port Authority (Sibu/Sarikei/ Bintangor) Sibu

General Manager: Mr.Chong Siew Yang 084-319009

Sabah Port Authority (Kota Kinabalu/ Sandakan/Tawau/Sepangar Bay/Dahad Datu/Kunak Kudat) Sabah Ports Authority Building, Jalan Tun Fuad, Tanjong Lipat, 88617 Kota Kinabalu

General Manager: En Ramli Amir 088-256155

Source: myTRADELINK: http://www.mytradelink.gov.my/port-authorities

Table 4.9: Permit Issuing Agency (as of 31 August 2014)

No. Ministries Agencies/Sections

1 Ministry Of Home Affairs Film Censorship and Enforcement Division

Royal Malaysian Police

2 Ministry of Works Construction Industry Development Board

3 Ministry of Health Pharmaceutical Services Division

4 Ministry of International Trade and Industry

Import and Export Control Section

Trade Cooperation and Industry Coordination Section

Strategic Trade Secretariat

5 Ministry of Agriculture and Agro-based Industry

Paddy and Rice Industry Division

Malaysian Quarantine and Inspection Services (MAQIS)

Department of Veterinary Services

Agriculture Department (Pesticides Control Division)

Agriculture Department (Crop Protection and Plant Quarantine Division)

Federal Agricultural Marketing Authority (FAMA)

6 Ministry of Plantation Industries and Commodities

National Kenaf and Tobacco Board

Malaysian Cocoa Board

7 Ministry of Science, Technology and Innovations

Atomic Energy Licensing Board

SIRIM QAS International Sdn Bhd (Civil and Construction Section)

SIRIM QAS International Sdn Bhd (Communication and Multimedia Certification Section)

8 Ministry of Natural Resources and Environment

Department of Environment

Department of Wildlife and National Parks

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9 Ministry of Energy, Green Technology and Water

Energy Commission

10 Ministry of Information, Communication and Culture

Malaysian Communications and Multimedia Commission (MCMC)

11 Ministry of Resource Planning and Environment

Sarawak Timber Industry Development Corporation

Forest Department Sarawak

12 Ministry of Modernisation of Agriculture

Department of Agriculture Sarawak (Veterinary Division)

Source: myTRADELINK: http://www.mytradelink.gov.my/permit-issuing-agency

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