Greater KL is poised to support the freight shipping industry that is steaming through the pandemic - Europe

Greater Kuala Lumpur is poised to support the freight shipping industry that is steaming through the pandemic

The global pandemic, which began in early 2020, has changed the world in many ways. One notable difference is a far greater reliance on maritime shipping. This is clearly the primary way to move goods in the complex global supply chain that powers the world.

The packing of goods into metal shipping containers has long been an essential part of modern international trade. Since the 1960s, shipping has helped accelerate globalisation and, over the years, carrying capacity has doubled while loading and unloading efforts have become much more efficient.

Now, maritime shipping is facing a new set of challenges. High demand and insufficient containers have skyrocketed the cost of shipping goods. According to the Freightos Baltic Global Container Index (FBX), the cost of container shipping almost quadrupled between November 2020 and February this year.

Industry observers attribute the surge in prices to rampant demand for China’s manufactured products, especially medical equipment, as well as consumer goods purchased by populations under some form of lockdown. This has had a knock-on effect on the need for gigantic container ships to transport vast amounts of goods from the Asian power house.

In March, the value and importance of the global shipping industry was highlighted when a container ship, nearly as long as the Empire State Building is tall, ran aground for six days in the Suez Canal in Egypt. News reports estimate that the cost of losses and damages from the blockage caused by this massive ship, known as the Ever Given, has surpassed US$1 billion. The Suez Canal handles about 12% of global trade, with about 19,000 ships passing through every year.

A well-developed and strategic hub

In this region, Malaysia is undoubtedly a strategic maritime hub underpinned by its geographical location, with the South China Sea on one side and the Straits of Malacca on the other. Excellent connectivity and a supportive infrastructure further enhance its appeal as a suitable place for such operations. This has led to leading shipping companies such as the CMA CGM Group and Hapag-Lloyd establishing key centres in Greater Kuala Lumpur. Both companies have plans to further develop their operations here and increase their headcount.

" Malaysia was picked to be our centre of excellence for this region as we decided to build on our existing expertise here. Furthermore, this country has an advanced infrastructure with good telecommunications and digital connectivity. "

Ravindra Sahu

“Malaysia was picked to be our centre of excellence for this region as we decided to build on our existing expertise here. Furthermore, this country has an advanced infrastructure with good telecommunications and digital connectivity,” says Ravindra Sahu, managing director of CMA CGM Sdn Bhd.

Headquartered in Marseille, French shipping company CMA CGM established a planning unit in Malaysia in 2001. Seven years later, this planning unit was developed into a centre of excellence as the group moved to consolidate all ship-related planning activities into centres located in carefully selected countries around the world.

Meanwhile, German international shipping and container transport company Hapag-Lloyd recently picked KL to develop a regional Quality Centre, the first of its kind in Southeast Asia. Barbara Smith, managing director of Hapag-Lloyd Sdn Bhd, says the decision was premised on the strong relationship between Malaysia and Singapore, where the company’s regional headquarters is located, as well as Malaysia’s young and multilingual talent base.

“Hapag-Lloyd has already been in Malaysia for about 30 years. Building up our local office into a Quality Centre is the next stage of its development. Greater KL is a very interesting location. It makes financial sense to establish a Quality Centre here. This location also offers a talent pool where we can look for employees, if needed,” says Smith.

" Greater KL is a very interesting location. It makes financial sense to establish a Quality Centre here. This location also offers a talent pool where we can look for employees, if needed. "

Hapag-Lloyd’s Smith

Smith and Sahu agree that the close proximity of Malaysian ports to major shipping lines serves the East Asian and Asia-Europe trades. Furthermore, the government’s continued investment in maritime infrastructure has developed these ports into key transhipment hubs in the region.

Sahu says the creation of free trade zones across the country had effectively encouraged multinational corporations to establish operations here. These zones have increased seaborne traffic and this is an added incentive for shipping lines to call on local ports.

Developing highly technical maritime skills

The maritime industry operates in a skills-based environment and it is vital that those working for global shipping companies have the necessary knowledge to perform efficiently and safely. These highly skilled workers must be able to demonstrate the critical skills required from their respective positions in a wide variety of conditions.

“Ship planning is critical to ensuring the lives and safety of the people and cargo that are carried on board our vessels. Our ship planners rely on various IT systems to ensure the stability of the vessel, optimise cargo intake and carefully plan the segregation of dangerous goods,” says Sahu.

CMA CGM’s local ship planning hub is responsible for stowage planning. This hub has increased the number of vessels that it manages from 62 in March 2019 to 225 in March this year. Sahu expects the local operation to oversee stowage planning for 257 vessels by March 2022, which is more than 50% of the vessels operated by the group.

“We prioritise safety, operational efficiency and commercial excellence by optimising the loading of the vessels in an effective manner. As we scale up to manage more vessels ahead, we will prime ourselves with more experts and capabilities as well as greater technological advancements,” he says.

In addition to in-house training, CMA CGM’s local employees are given access to the group’s digital library. Sahu says the digital library offers a variety of resources to equip employees with what they need to perform their day-to-day functions and

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