The Federation of Malaysian Manufacturers (FMM) has raised concerns over a forthcoming tariff adjustment at Port Klang, cautioning that the revised structure could result in a steep escalation in container handling and storage charges, potentially increasing by up to 243%.
FMM president Soh Thian Lai stated that the updated tariff framework, reflecting a 30% rise and set to take effect on 1 July, could impose a substantial financial burden on the manufacturing sector. As reported by The Borneo Post, manufacturers may face container-related charges surging between 197% and 243% under the new structure.
“This comes at a time when industries are already grappling with unresolved external shocks, including continued US tariff threats on Malaysian exports, the expansion of the sales and service tax, and an impending restructuring of electricity tariffs,” Soh said.
He warned that the cumulative effect of these converging cost pressures would be highly detrimental to manufacturers and exporters, threatening to undermine Malaysia’s export competitiveness at a pivotal stage in the nation’s post-pandemic economic recovery.
The announcement follows an earlier statement in April by Transport Minister Loke Siew Fook, who confirmed that the 30% tariff increase would be implemented in phases over a three-year period.
FMM had previously appealed to the government in March to defer the proposed adjustment. At the time, Soh underscored the significant financial impact the hike would have on manufacturers and logistics providers, citing increased operating costs as a critical concern.
According to Soh, the gazetted rates issued by the Port Klang Authority will see container handling fees for a 20-foot container (TEU) increase from RM300 to RM390 in three phases. He estimated that the full implementation could result in an additional RM1.125 billion in annual costs to the industry, based on Port Klang’s annual handling volume of approximately 12.5 million TEUs.
Soh emphasised that Malaysia’s ports have traditionally benefitted from competitive pricing structures. However, under the revised rates, container handling charges could reach between US$120 and US$130 per TEU—on par with leading regional hubs such as Singapore and Hong Kong, but significantly higher than charges in neighbouring ASEAN nations including Vietnam, Indonesia and Thailand.
“This will erode Malaysia’s value proposition and increase the risk of cargo diversion to competing regional ports,” Soh added.
-FMT
