As part of my research
work, I have visited Malaysia, the Philippines and Singapore to understand how
these countries have developed their respective Short Sea Shipping (SSS) sector
into a strong industry and what lessons India can learn from them.
1 RATIONALE FOR THE STUDY TOUR
The reason for selecting
these ASEAN maritime nations was that, among and within these countries, the
maritime transport plays a vital role in regional socio-economic development by
enhancing the transport of goods. In fact the developments in the maritime
sector of Malaysia and Singapore are
well ahead of India and the continuous measures taken by them are worth
studying. And Philippines’ Roll on - Roll off (Ro-Ro)/Ro-Ro Passenger(Ropax)
/CHARO network is something India could successfully implement without much
infrastructure investment. Also, there is much to learn from the fast ferry
services connecting Singapore and Indonesian islands.
2 STUDY TOUR WORKING SCHEDULE
Date/
Time
|
Activities
|
Participants
|
Venue
|
MALAYSIA
VISIT - 27TH JUL TO 29TH JUL
|
|||
27
Jul , Mon
09:00 – 10:00 AM
|
Meeting with Trans Asia Line, Malaysia
|
MrAnand Kumar , Branch Manager
Mr Suresh , Operations & Services
Manager
Trans
Asia Line (M) SDN. BHD, Klang , Malaysia
|
Venue : Trans Asia Line , Malaysia
|
11:00
- 01:00 PM
|
Meeting with West Ports, Malaysia
SdnBhd and Port Tour
|
MrSuthahar , Marketing Manager
MrShashidaran K Krishnan, Marketing
Manager
MrMathanaseelan,
Marketing Manager
West Ports Malaysia SdnBhd, Pulau
Indah, Port Klang, Malaysia
|
Venue : West Ports Malaysia Office
|
02:00
– 03:00 PM
|
Meeting with Transworld, Malaysia
|
Mr Rajesh Pillai , General Manager,
Transworld GLS
|
Venue : West Ports Malaysia Office
|
28
Jul , Tue
10:00-12:00
|
Meeting with Penang Port Sdn. Bhd
Visiting Customs Office , Penang
|
Mr Ismail Bin Mohamed Ghouse , Head
Operations
North Butterworth Container Terminal ,
Penang Port, Penang, Malaysia
|
Venue : NBCT Office , Penang
|
02:00- 03:00 PM
|
Meeting with QEL Shipping Services
SdnBhd
|
Mr Michael Loh , Sales Manager
MrIdris Bin Othman , Operation Manager
QEL Shipping Services SdnBhd, MWE
Plaza, Penang
|
Venue : QEL Shipping Office
|
03:30 – 05:00 PM
|
Meeting with The Society of
Logisticians, The AK Academy and X-Press Feeders
|
Mej. Chang Kah Loon , President, The
Society of Logisticians and Regional Manager , X-Press Feeders, Malaysia
Ms Amy Ooi , Manager, Academic Affairs
, The AK Academy, Penang , Malaysia
|
Venue : AK Academy Office
|
29th
Jul, Wed
11:00 – 01:00 PM
|
Meeting with MAC Asia Line SdnBhd,
Selangor, Malaysia
|
Capt Justus Kumar , General Manager
MrLiong Wu Lung , Sales & Marketing Manager
|
Venue : MAC Asia Line office
|
03:00- 04:00 PM
|
Meeting
with Transpole Logistics SdnBhd
|
MAC Asia Line, Klang, Selangor,
Malaysia
MrPrakash Kumar Malakar ,Ast. General
Manager, Transpole Logistics, Klang,
Selangor , Malaysia
|
Venue
: Transpole Logistics office
|
PHILIPPINES
VISIT – 30TH JULY TO 01ST AUG 2015
|
|||
30
July , Thu 10:00 - 11:30
|
Meeting with AGILE Marine Resources
Inc. and/or Lubeca Protection & Indemnity Phils. Inc.
|
Atty. Imelda L. Barcelona , President
Lubeca Protection &
Indemnity Phils., Inc.
Suite 205 Marbella 1 Bldg.
2223 Roxas Blvd., Pasay City 1300
|
Venue: The Manila Hotel
|
2:00 - 4:00 PM
|
Meeting with officials of Department
of Transportation and Communication
Maritime Industry Authority and
Philippine Port Authorities (PPA).
|
Mr Nick Conti, Dep. Administrator,
MARINA
Ms Esperanza C Santos, Port Operations
Specialist, PPA
Ma. Lourdes T Pagtalunan
Ms Belinda C Salvosa
Mr Homer T De La Paz
Sr. Communications Development
Officers,
Water Transport Planning Division
DOTC
Mr. Samuel C. Custodio
(Former Director, Planning Service of
DOTC)
Independent Transport Planning
Consultant
Mr. Ronald G. Sison
Independent Planning Consultant
|
Venue: DOTC Conference Room
15th Floor, The
Columbia Tower
Ortigas Avenue,
Barangay Wack-Wack
Mandaluyong City
1555, Metro Manila
|
4:00 - 6:00 PM
|
Meeting with Ms. Bondoc.
|
Ms. Josephine Bondoc , (Former Chief,
Water Transport Planning Division of DOTC)
|
Venue: Robinson's Galleria Mall
Ortigas cor. EDSA, Pasig, Metro Manila
|
31
Jul, Fri
9:00 - 12:00
|
Meeting with PPA Port Manager and
observation tour of port operations.
Meeting with officers of Manila North
Harbour Ports Inc.
|
A. Pillai, R. Sison
Ms Clarissa S Ignacio, Port Manager
Mr. Raul T. Santos ,Asst General
Manager for Ops,
Ms Esperanza C Santos, Port Operations
Specialist,
Philippine
Ports Authority (PPA) , Bonifacio Drive, South Harbor ,Port
Area, Manila
Mr Erik F Reyes , Project Coordination
Manager
Mr Adnan G Alzaga, Pier Operations
Manager
Ms Phoebe J Riva , Gates & Traffic
Department Manager
Manila North Harbor Ports Inc , North
Harbor, Port Area, Manila
|
Venue: Manila North Harbor
|
3:00 - 4:30 PM
|
Meeting with freight forwarder/
logistics provider
|
A. Pillai, R. Sison
Mr. Renato T. Pamintuan
CEO
Asian Freeports, Inc.
Unit 506 Global Tower
2029 Hen. Mascardo
cor. Capt. M. Reyes St.
Bangkal, Makati City
1233
|
Venue: The Manila Hotel
|
01
Aug, Sat
10:00 AM -12:00
|
Meeting with Dr. Hussein Lidasan et
al.
|
A. Pillai, R. Sison
Dr. Hussein Lidasan
Professor/Director of Graduate Studies
School of Urban and Regional Planning (SURP) The University of the Philippines Diliman, Quezon City
Dr. Enrico L. Basilio
Chief of Party, USAID Advancing Philippine
Competitiveness (COMPETE) Project
|
Venue: University of Philippines,SURP
Diliman, Quezon City
|
SINGAPORE
VISIT - 03RD AUG 2015
|
|||
03AUG
, Mon
11:00 – 01:00 PM
|
Visiting Harbour Bay Ferry
Terminal and Singapore – Indonesia Ferry operators
|
Majestic Fast Ferry , Maritime Square
, Harbourfront Centre, Singapore
Horizon Fast Ferry Pte Ltd, Maritime
Square ,Harbourfront Centre, Singapore
|
Venue : Respective offices, Harbour
Bay Ferry Terminal
|
3 KEY FINDINGS
3.1 Malaysia
Malaysia’s land is
separated by the South China Sea into two similarly sized regions, Peninsular
Malaysia and East Malaysia (Malaysian Borneo). Peninsular Malaysia shares a
land and maritime border with Thailand and maritime borders with Singapore,
Vietnam, and Indonesia. East Malaysia shares land and maritime borders with
Brunei and Indonesia and a maritime border with the Philippines. Malaysia is
strategically located on the Strait of Malacca, one of the most important
shipping lanes in the world.
3.1.1 Ports in Malaysia
Ports in Malaysia are
established either as a Federal or State ports under the jurisdiction of
respective Governments. There are also ports that are the jurisdiction of the
Marine Department, fishing ports and jetties under Fisheries Development
Authority and dedicated jetties for handling oil by Oil majors. Under the port
privatization Act, Federal ports are either corporatized or privatized. The
port authorities regulates the Private Operators . Malaysia has two ports that are listed in the
top 20 busiest ports in the world, Port Klang and Port of Tanjung Pelepas,
which are respectively the 2nd and 3rd busiest ports in Southeast Asia after
the Port of Singapore.
Malyasia – Federal and State port locations.
Source : Transport Statistics Malaysia 2013 , Ministry of Transport,
Malaysia
Fig : 1
The port tariff rates are
regulated by the port authority. It is to be noted that, the tariff is same for both domestic and international
operators. Also, understand from the port operators that the vessels are normally
berthed based on fixed windows and hence both domestic and international
shipping gets same treatment.
3.1.2 Cabotage Policy
As per Article 65KA of the
Merchant Shipping Ordinance 1952 of Malaysia , the cabotage policy permits only
domestic vessels of Malaysian flag that holds valid license for domestic
shipping to ply on domestic trade.
However, the Malaysian Government relaxed the cabotage policy with
effect from 3rd Jun 2009 , which permits foreign flag vessels to transport containerized transshippment cargo among the Malaysian ports . This
helped both Port Klang and Port of Tanjung Pelepas to become the transshippment
centre of Malaysia and the region.
Total cargo throughput of Malaysian Ports by
Export, Import and Transhipment ,2004 -13.
Source : Transport Statistics Malaysia 2013 , Ministry of Transport,
Malaysia
Fig : 2
In addition, foreign flag
vessels can obtain temporary permits form the Ministry for any specific route
and cargo, if there is no availability of domestic vessels
3.1.3
Domestic Shipping
The shipping industry in
Malaysia is being managed by the Marine Department and the Ministry of
Transport (Maritime Division) is responsible for legislation with regard to the
shipping industry. The Malaysian Government
has designed programs and incentives that encourage the growth of shipping
industry in the country. As such, there are policies in place that persuade
nationals to invest in the industry. The objective of such policies is to have
self-sufficient supplies of Malaysian-flagged vessels—promoting internal supply
of national vessels.
Table : 1
Total number of licence issued by Malaysian
Domestic Shipping Licencing Board (DSLB), 2009-13.
Source : Transport Statistics Malaysia 2013 , Ministry of Transport,
Malaysia
Shipping companies are eligible
for tax exemptions if their income is derived from the operation of Malaysian
ships. This incentive is applicable to a Malaysian national only. Incomes of crews are also eligible for tax
exemptions if their operations are derived from exercising duties on board the
mentioned Malaysian ship. Income received by non-resident from the rental of
ISO containers to Malaysian shipping companies is also exempted from income
tax. The Malaysian government also provides incentives for prime movers and trailers
for port operation. Container hauliers qualify for sales tax exemptions on new
prime movers and trailers that are locally produced. Additionally, Ships above
26 GRT are exempted from import duty and surtax.( Source 19 : Draft Report : “Seamless Integrated Domestic
and International Shipping in Archipelagic ASEAN” by Dr Basilio et al)
Domestic traffic of all
kinds of goods is heavy between Peninsular and East Malaysia. Understand from
stake holders that the customers are encouraged to containerize all possible
commodities so as it can be moved by container , Ro-Ro / RoPax vessels.
Domestic Vs Foreign cargo handled in Malaysian
Ports, 2013
Source : Transport Statistics Malaysia 2013 , Ministry of Transport,
Malaysia
Fig : 3
Domestic vessel and cargo
are subject to Malaysian Customs regulations, however, the procedures and
documents are computerized and hence there is no need for the customers to
visit Customs office for processing documents. Also, to avoid delays and to
increase the awareness of customers , detailed process charts of each and every
activity is exhibited in the customs
office . A sample is attached here under.
Customs office counter , Penang Port, Malaysia
Fig : 4
From various meeting with
the trade and authorities in Malaysia ,
it is understood that all stake holders of the trade work complimentary to each other for the
development of shipping , both domestic and international sectors.
3.2 Philippines
The Philippines is an
archipelago consisting of about 7,100 islands and islets. It is divided into 3
major island groups, (1) Luzon , where
Manila, the capital of the Philippines is
situated (2) Visayas and (3) Mindanao. Because of Philippines’ geographical location, the interisland shipping , which is the main
transport system in the country, plays a vital role both in international and
domestic transport.
The development of the
Philippines Nautical Highway system, which integrates the land and water transport
system using roll-on/roll-off vessels, started in 2003. Today the Strong
Republic Nautical Highway (SRNH) consists of three main trunk routes – the
western , central and eastern nautical highways. The Department of
Transportation and Communication (DOTC)is in charge of policy, planning,
programming, coordinating, implementing and regulating the network transport
system.
Nautical Highways of the Philippines
Source
: The Master Plan and Feasibility Study on the Establishment of an ASEAN RO-RO
Shipping Network and Short Sea Shipping, JICA27
Fig: 5.5
3.2.1 Ports in the Philippines
As per the handbook published by the
Department of Transport and Communications of the Philippines, there are 2451
ports in the country , of which 1607 are public ports , built and managed by
the public sector , 423 private ports built and managed by the private sector
and 421 fishing ports. These Philippines Port Authority (PPA) regulates all
public and private ports. Many of the fishing ports are managed by the
Philippine Fisheries Development Authority (PFDA) which is under the department
of Agriculture.
In the Philippines, the
domestic and international traffic is handled in separate ports. As per
Philippine Port Authority’s statistics there are 211 domestic and 38
international ports are operational on a commercial basis. Because of this
practice, both domestic and international vessels get equal priority in the
respective ports. Also, there is a “ one
stop shop” facility for the customers ,
where they can avail PPA, terminal operator , Customs and shipping line’s
services under one roof.
One Point Process Centre ,North HarborPort ,
Manila, Philippines
Source : Picture taken on 31st Jul 2015 while visiting the
port
Fig :6
The port tariff is fixed by
PPA and the amendments, if any, will be made by PPA after consulting with
concerned stake holders. The domestic port tariff is less compared to the
international port tariff.
3.2.2 Cabotage Policy
Under the provisions of the Philippines’
Constitution and existing shipping-related laws, the shipment of domestic
cargoes from one domestic port to another should be carried only by domestic
shipping lines. Foreign ships are allowed to call in designated Philippine
international ports or other ports to load and unload foreign cargoes but not
domestic cargoes and passengers.
However , the Philippines
Government vide Republic Act No.10668 dated 21st Jul 2015 ( Annexure-16),
relaxed the cabotage policy to permit foreign vessel to dock and c-load ( cargo
discharged by one foreign ship can be loaded on to another operator’s ship for
transporting to other domestic ports) in multiple ports . This policy expects
to reduce logistics costs considerably .
3.2.3 Domestic Shipping Industry
Domestic (Inter-island)
shipping in an archipelagic economy like the Philippines is a critical element
of development. As per the statistics provided by PPA ( Annexure- 17) the domestic shipping facilitate about 98% of
domestic inter-island trade. Roughly 80 million tons of cargo and more than 50
million Filipinos as well as foreign tourists are getting transported annually
by the inter-island shipping.
In the Philippines, as per
records there are 2932 cargo fleet and
5956 passenger fleet registered under
domestic trade in 2014 ( Ref. Annexure -
). In addition to this, 15 domestic container vessels and 40 domestic
RO-RO-passenger (ROPAX) vessels are registered under the domestic trade.
Average age of the vessel is about 20 years.
The Maritime Industry
Authority (MARINA) undertakes maritime safety regulatory functions such as ship
registration, inspection, licencing and crew qualification and competence for
all Philippine registered ships. Also, customs clearance is not required for
both domestic vessels and cargo.
The most recent domestic
shipping policy of the Philippines is defined under Republic Act (RA) 9295. The
law provides incentives to domestic ship operators such as exemption from
value-added tax on importation and local purchase of passenger and/or cargo
vessels and from equipment relating to safety and security of the passengers
and crew.
3.2.4 Developments in Domestic Ro-Ro Shipping
In 2003, the Government of
the Philippines issued a policy to promote Ro-Ro, a system designed to carry
rolling stock cargo which does not require cranes for loading or offloading.
This policy , which provided an alternate mode of transport to the market, heightened
the level of competition within the domestic shipping industry. The reduction
in cost coupled with efficiency in Ro-Ro shipping made the shippers transport
their goods across the domestic market.
Comparison between Container Vs RO-RO Operation
Source : Linking the Philippine
Islands through highways of the sea,
Fig :7
The truck and bus operators
changed their mode of operations to suit to the Ro-Ro connectivity, which
helped them to expand their services to wider market area.
Ro-Ro and CHARo vessels under operation
Source
: The Master Plan and Feasibility Study on the Establishment of an ASEAN RO-RO
Shipping Network and Short Sea Shipping, JICA
Fig : 8
3.3 Singapore
One of the busiest shipping
industries in the world is located in Singapore. This is primarily because the
Government of Singapore has put in place policies which are made to be
investment friendly. The shipping industry
is being overseen by the Maritime and Port Authority (MPA) of Singapore under
the Ministry of Transport (MOT).
There are two general
policies that govern port authorization and merchant shipping in the country.
These are the Maritime and Port Authority of Singapore Act and the Merchant Shipping
Act, respectively. The former is responsible for the establishing and
incorporating the Maritime and Port Authority of Singapore providing for its
functions, powers and other related matters. The latter, on the other hand, is
responsible for anything related to merchant shipping such as ship
registration.
The Government of Singapore
created financial institution called the Marine Financial Incentive (MFI) to
help investors and ship owners to avail “packaged” deals. An example of the
benefits of this program is cheaper sources of capital and high yield
investments. There are also different banking infrastructures that have
competitive loan rates to complement the advocacy of the government to be a
world-class shipping hub.
Singapore has no cabotage
principle because it only has a single port.
3.3.1 Singapore cruise / ferry terminal
The Singapore Cruise Centre
is a cruise terminal located in the south of Singapore and it comprises of two
terminals, namely the International Passenger Terminal (IPT), and the Regional
Ferry Terminal (RFT). The IPT handles
international cruise ships the RFT handles ferry services to the neighbour
Indonesia Island, such as Batam and Karimum.
Fast Ferry , to and from Indonesia from Singapore,
at the RFT
Source : collected while visiting Singapore on 3rd Aug
2015
Fig : 9
4 Lessons learnt
The study tour helped me to
learn about the ASEAN shipping sector in general and the shipping sectors of
Malaysia, the Philippines and Singapore in particular. Maritime transport
system , both domestic and international , plays a vital role in the socio-economic
development of these nations.
During the tour I could
visit various ports, both domestic and international and also could meet
important stake holders in the shipping sector, like Govt. and port officials,
trade experts, academics/researchers, consultants, shippers, forwarders etc, of
the respective nations. From various
meetings and discussions had with these stake holders, I gathered notable
information about the government policies which support both the domestic and
international shipping sectors of the respective nations.
The visit to visit the “
One Point Process Centre” in Manila
North Harbour Port was an enriching experience.
I could understand that the customer can avail all facilities,Port /
terminal operator / Customs / Shipping line, related to his vessel /shipments from this centre.
I also had an opportunity
to see the RoPAX( Ro-Ro Passenger) and CHARo ( Chassis Ro-Ro for container
transport) ships operations at the
Manila North Harbor Port . The Philippines’ Roll on – Roll off policy which was
introduced in 2003 to reduce the high cost of transporting people and goods
among the Islands worth a special mentioning. The concept of National Highway
System , connecting both land and water transport system was introduced to
facilitate seamless movement of people and goods among the Islands at a low
cost.
Also, I could learn more on
the ASEAN intermodal highway planned by ASEAN nations for the establishment of
an ASEAN Single Shipping Market ,from
various discussions had with the experts. This network helps integration and
development of domestic shipping as well as the international shipping sector of
each member nations.
ASEAN Highway Network
Source
: The Master Plan and Feasibility Study on the Establishment of an ASEAN RO-RO
Shipping Network and Short Sea Shipping, JICA
Fig: 10
To summaries, below
mentioned are the measures taken by these ASEAN member nations for development
of domestic shipping ( Short Sea Shipping)
in their country , which can be implemented in India too for the
development of coastal shipping.
a.
Introduced favourable fiscal policies to promote domestic shipping
b.
Involvement of private sector in infrastructure development.
c.
Relaxed cabotage principle for the movement of containerized
transhipment cargo on foreign vessels to promote their national transhipment
terminal and in turn to promote the domestic shipping sector too.
d.
Customs procedures made easy and fast
by introducing electronic transmission of documents.
e.
Equal importance given to coastal ships by establishing separate
domestic ports /or dedicated berth for
coastal vessels
f.
Customer friendly “One stop shop”
facility in all ports / terminals.
g.
Promoting containerization in domestic shipping sector for a seamless
and cost effective movement of goods through inter modal transport network.
h.
Most importantly, along with conventional shipping they do promote Ro-Ro
/ RoPAX / CHARo network system to strengthen the national and ASEAN intermodal
highway system for the seamless movement of cargo and people across the
country.
The visit indeed was an
enriching experience and strengthened my vision of an integrated national inter modal transport
network system , connecting the land and water transport system to connect and facilitate
both domestic and international supply chain networks.
