The Ministry of Transport is committed to advancing Labuan’s port facilities to make it a highly competitive port, bolstering its role as the island’s economic gateway.
Minister Anthony Loke even praised the Labuan port operator Megah Port Management Sdn Bhd (MPM) for its substantial improvements in efficiency and service quality since assuming operations in 2020.
“I have witnessed remarkable progress in labuan port’s performance under Megah Port Management, especially compared to previous years when inefficiencies were a frequent concern.
“The operator has invested RM25 million in new machinery and infrastructure upgrades, greatly enhancing the port’s operations,” he said.
Loke noted that the recent additions like mobile cranes have significantly boosted the port’s cargo-handling capacity and efficiency.
“We’re pleased with the improvement in productivity,” he added.
Loke highlighted that MPM is currently operating on a 6-year management contract and added that a longer concession period may be necessary to support substantial infrastructure investments.
“I will bring this to the cabinet soon, as a longer concession could enable further enhancements at the port, including repairs to the ageing jetty,” he said.
Given the port’s strategic location in Asia, Loke said it has the potential to serve cruise liners, bringing in more foreign vessels and economic opportunities for the region while also making it a more welcoming destination for international travellers.
As a testament to the country’s overall attractiveness in the global export market, local port and logistics company Westports Holdings Bhd, for one, is already experiencing a recovery in transshipment volumes and sustained gateway cargo volumes.
Due to this, CIMB Securities Sdn Bhd expects stronger throughput volume growth in 2025.
The research house said the group highlighted the potential for increases in cargo demand as importers look to bring in goods ahead of possible new tariffs following the United States presidential election, which could provide a short-term boost to Westports’ throughput.
Recently, Westports Holdings announced a higher net profit of RM233.07 million in the third quarter ended 30 September 2024 (3Q24) compared to RM195 million a year ago, while revenue for the quarter rose to RM572.57 million versus RM542.31 million previously.
For the 9 months, Westports’ net profit increased to RM641.33 million, up from RM573.35 million in the same period last year, while revenue climbed to RM1.67 billion from RM1.60 billion, a growth driven by a higher container volume of 8.11 million 20-Foot Equivalent Units.
Meanwhile, Hong Leong Investment Bank (HLIB) said Westports’ terminals continued to experience yard congestion due to the spillover impact from the port congestion in Singapore and some of the transshipment containers to Singapore were redirected to Westports.
“Management highlighted its ongoing exercise to ease yard congestion and become more selective in allocation towards gateway containers.
“Transshipment volume in the 9 months of 2024 (9M24) contracted by 5.3% year-on-year (YoY), affected by the ongoing yard congestions and loss of ZIM container shipping line,” it said.
Nonetheless, HLIB noted that gateway volume continues to show robust growth with the 9M24 volume rising 10.3% on stronger imports driven by ongoing economic growth and strong foreign direct investment inflows.
In addition, MIDF Amanah Investment Bank Bhd expects Westports’ container volume to end flat in 2024, as shift in transshipment congestion and subdued market conditions have dampened growth momentum, which largely aligns with its 1.2% YoY growth estimate.
“They have guided for low single-digit growth in 2025, driven by strong gateway volume and recovery in transshipment volume, which we translate into a 3.3% YoY growth.
“Container volume could see a temporary rise if shipments are frontloaded in anticipation of trade tariffs following Donald Trump’s presidential transition, through the impact will depend on the scope of the tariffs,” it said.
The bank noted that the ‘China+1’ strategy has been a key driver of gateway volume growth, particularly from the paper, glass and solar industries.
