KUALA LUMPUR, 15 Feb: The crisis at the Red Sea has minimal impact on Malaysia’s shipping with exporters stating that they only face slight disruption with moderate freight cost increase.
According to Maybank Investment Bank (Maybank IB), European countries face far greater impacts as they depend heavily on exports from Asian countries – thus bearing the brunt of higher shipping costs.
“Despite challenges in the supply chain and increased freight costs, Malaysia’s trade outlook remains positive and stable and Malaysian ports have experienced minimal disruptions, with limited impact on trade routes to Europe and the United States.
“According to researchers, domestic importers have reported supply chain delays in the chemicals, machinery and automotive industry which in turn has affected their production timeline,” it said in a statement.
Additionally, no significant increase in freight rates for these routes due to their backhaul nature, except for luxury items like wine and gourmet which may be subject to higher container freight rates.
“Overall, the disruptions are generally positive for the shipping sector.
“Global container rates, notably from East Asia to Europe, are anticipated to remain elevated, stabilizing at the current level which is two to four times higher than the low in November 2023.
“Notably, the increase in rates is also dependent on voyage time and operating costs rather than capacity,” stated the research house further.
Meanwhile, Intra-Asia rates are expected to be stable where rates will be slightly above pre-pandemic levels, while domestic rates would experience slight disruption. – TVS
