LINER SHIPPING BETWEEN SINGAPORE AND EAST MALAYSIA

Abstract

This is an exploratory study dealing with the carriage of cargo by liner ships between Singapore and East Malaysia. Since the commencement of trade between the two regions in the 1820s, the pattern of trade has been characterised by Singapore acting as an entrepot centre for East Malaysian trade. Coastal liners carried manufactured goods originating from the Western countries from Singapore to East Malaysia and returned with raw materials and semi-processed goods which were distributed to buyers primarily outside of the Southeast Asian region. The Singapore-East Malaysia liner trade has traditionally been dominated by Singaporean vessels. In the late 1960s, however, a new era of economic, political and technological changes led to a far-reaching restructuring of the coastal liner industry. The desire of the Malaysian government to develop its own maritime fleet to handle its seaborne trade and its attempts to reduce its reliance on Singapore's entrepot facilities, coupled with the lack of support given by the Singapore government to its local coastal ship operators, had immediate repercussions in the trade and shipping patterns between Singapore and East Malaysia. The maritime aspirations of the Malaysians became expressed in an increase in the number of Malaysian liner operators in the coastal trade. This, however, took place during a period when the seaborne trade between the two countries was decreasing. Consequently, a serious problem of overtonnage was created. The resulting competition for cargo by shipowners led to a decline in freight rates whilst operating costs, especially port charges, increased. This also coincided with technological innovations in the shipping industry towards unitisation and specialisation. Shipowners, in a bid to remain competitive, have been faced with the problem of having to upgrade their coastal fleet even though business has been unfavourable.