Freight forwarders act on behalf of exporters and importers
in arranging services such loading and unloading of goods, obtaining payment on behalf
of customers, booking of space, and customs clearance for air cargo, sea cargo, land
transportation, rail freight, custom agency services, mutimodalism, door-to-door
pick-up and delivery services.
Their role through the development of multimodal transport
operations is important to increase efficiency in exports and imports of goods, which
is a critical component in the quest of improving our total export competitiveness.
Their earnings consist of commissions paid for their services and are reflected under
the ëOther Servicesí item in the Balance on Services Account.
Currently the freight forwarding industry faces the problems
of a fragmented structure, inefficiency of related services, high operating costs,
and low volume. This is because in carrying out their operations, freight forwarders
not only depend on other related services but also use substantial foreign exchange
in the procurement of services, bookings for cargo space and deciding on shipping
lines, airlines or railways to be used.
There are many freight forwarding companies in the country
with four member-affiliated associations. This fragmented industry has two tiers
ie. freight forwarders and custom brokers or agents and is operating in a very competitive
environment. However, their contribution and growth potential are limited due to
the low level of profesionalism, a non-uniform tariff structure and high staff turnover.
Operational efficiency of the freight forwarder also depends
on other services, such as good freight container facilities and haulage system,
inland clearance depots (ICD), inland ports, airports and ports. The industry also
depends on the participation of all the parties in the transport and logistics chain
as well as the information technologies such as electronic data interchange (EDI)
used at Port Klang and Penang. The response time of the EDI system at Port Klang
is very slow and it takes approximately between 12 hours to 1 1/2 days for a transaction
to be completed.
The operational costs of freight forwarders will be increased
significantly when MAS raises existing ëadd-onsí and cargo rental space rate at Penang
Airport as well as the introduction of proposed rates at KLIA. These additional costs
will be passed down to the end users such as exporters, importers and potential investors.
In order to increase Malaysia export competitiveness, both
the freight forwarders and their related services providers would have to be more
efficient and cost effective. For this purpose, the following recommendations
- Review and amend the Customs Act, 1967 and its regulations
to meet the commercial requirements of the forwarding industry.
- Restructure the freight forwarding industry to enhance organisational
efficiency via mergers.
- Regulate and control the operations of the freight forwarders
using a more stringent set of performance criteria.
- Have a uniform tariff structure in freight forwarding industry.
- Promote professionalism in the industry through integrated
training and qualification requirements.
- Encourage freight forwarders to develop multimodalism with
the aim of providing efficient door-to-door services.
- The Government should introduce incentive schemes to encourage
freight forwarders to intensively promote shipping arrangements in exporting CIF
and importing FOB.
- Encourage freight forwarders to maximise the utilisation of
national carriers for both sea and air transports.
- Intensify the utilisation of local hub centres namely Port
Klang, Sultan Abdul Aziz Shah Airport and Kuala Lumpur International Airport.
- Promote the usage of the various free commercial zones in
the country for value-added and transhipment activities, especially for industries
under licensed manufacturing warehouse and free industrial zones.
- To improve and upgrade information technology especially electronic
data interchange (EDI) and other infrastructure support components such as inland
ports, inland clearance depots and other freight container facilities.
- A container leasing company should be formed to lease containers
for use by exporters since there is shortage of empty containers available.
- Enhance efforts to combat corruption and eradicate bureaucratic
red tapes by relevant Government agencies and among freight forwarders.
- Implementation and Coordination Unit of the Prime Ministerís
Department should conduct a study of the whole process of handling and transporting
containers from premises/factories to ships at port and vice versa.
- The Ministry of Transport should review the cargo add-on rates
charged by MAS and space rental charged by Malaysia Airport Berhad.