Sabah port hit by triple blow of congestion, shipping company surcharges, and price hikes!

According to Sabah media reports, the Sabah branch of the Malaysian Manufacturers' Federation (FMM) recently expressed serious concern over the ongoing congestion at Sabah's ports, pointing out that this logistics crisis is severely undermining the state's industrial competitiveness. 

FMM Sabah Branch President Liaw Hen Kong pointed out that port operations in the state have nearly become "paralyzed," with severe disruptions in container movement, frequent ship port diversions, high levels of container congestion, and prolonged delays at gate operations becoming the norm.

Liaw further stated that feeder vessel operators have announced a "congestion surcharge" and a "General Rate Increase" (GRI) effective from May 7, attributing the move to the port's failure to clear accumulated cargo promptly. "This is a direct consequence of inefficient port operations, yet ultimately the cost is borne by Sabah businesses," he emphasized.

He noted that compared to Peninsular Malaysia, Sabah manufacturers already face higher raw material and fuel costs, and are now grappling with sharp increases in demurrage fees, detention charges, and additional surcharges. The port operational bottlenecks have created a significant cost-push inflation environment. 

Manufacturers, under the heavy burden of punitive surcharges and storage fees, have reached a breaking point and are forced to pass on costs to consumers. This not only erodes public purchasing power but also severely compresses corporate profit margins. The federation is calling for immediate intervention measures to resolve the crisis and safeguard Sabah's industrial competitiveness. 

As a pillar of Sabah's economy, the timber industry is on the verge of supply chain collapse due to ongoing port disruptions. Industry experts warn that Sabah boasts a substantial timber processing and export system; if port operations do not improve within the coming weeks, international orders may shift abroad, eroding buyer confidence and prompting global customers to turn to more logistics-efficient alternative markets such as Indonesia and Vietnam. In such a scenario, Sabah’s timber sector would lose not only containers and shipping schedules, but also its hard-earned reputation in export markets and its established industrial standing. 

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