CHAPTER FOUR: Logistics value chain

Contents: Introduction, Overview on Logistics Value Chain, Key Elements for Value Chain Analysis for RURB, The Seven-step Sea Freight Transportation Model, Logistics Value Chain Models, Sea Freight Logistics Stakeholder Analysis, Standard Industrial Classification of Freight Logistics, Logistics Trade Directory, Appendix

Key Points 1. This chapter has identified the various conceptual frameworks that have been developed for logistics studies. The frameworks are generally process or activity-based, focusing on the chain of activities involved in import-export logistics. The number of different frameworks shows the complexity of logistics activities, as each framework focuses its own specific purpose. 2. This RURB study focuses on sea freight import-export logistics. It is using the process-based model that resembles the industry’s perspectives of logistics activities. As such the industry Seven-step Sea Freight Transportation framework provides clarity on the analysis of the logistics value chain. To support value chain analysis, consideration is made on the product-based perspective of logistics activities. 3. The WTO Trade Facilitation framework’s main purpose is to ensure a common understanding of trade rules between economies so that goods can move smoothly and efficiently between them. 4. The World Bank Trading Across Borders framework serves to benchmark between economies in the import-export sea freight logistics. This particular benchmark indicator is one of ten indicators to rank economies by the ease of doing business. 5. Another World Bank benchmarking framework is the Logistics Performance Indicators that measures and benchmarks logistics quality among economies. The measures are made from perception studies of freight forwarders in the import-export activities. 6. The UN/CEFACT Buy-Ship-Pay framework provides a process-based perspective of the international supply chain. The purpose is to have a model that can be used as a reference for all parties engaged in the supply chain in order to assist in harmonization of trade processes and data, use of best practice, promotion and training. 7. The Frost and Sullivan Framework is specially developed is a snapshot study of the logistics infrastructures and capacities to analyse the “as-is” logistics capability of the country. The aim is to propose the strategic development of the logistics sector in the medium-term. 8. The review of these frameworks enables a compressive stakeholder analysis to be made. The MISC2008 provides the industrial classification of the logistics business activities of interest.

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9. The Malaysian Logistics Directory portal provides a large samples of logistics businesses, while the Malaysian Trade Facilitation portal is able to identify four categories of stakeholders in sea-freight export-import logistics.

Introduction

Malaysia is a fast developing economy that has been dependent on its capacity to trade globally. Since the early eighties, until recently, the economic emphasis has been on industrialisation through the manufacturing industry and the export of manufacturing. The earlier years of industrialisation was focused on employment growth through low cost labour intensive industry. As the country achieved full employment, the continuing growth of the economy was supplemented by imported foreign labour.

The country also began to focus on higher added value output and the need to improve the capacity of manufacturing-related services in the Second Industrial Master Plan (1996-2005). The emphasis was on the Manufacturing++ Strategy1 (Figure 4.1). The emphasis of the Manufacturing++ Strategy is to encourage the investment into high technology, high added value industry. It also calls for the development of more knowledge-based manufacturing-related services industry. Distribution or logistics is also the focus of Manufacturing++. This strategy continues into the third Industrial Master Plan (2006-2020).

Being a highly export-oriented economy, Malaysia has a mature export logistics sector. The emphasis over the last many years has been on the continuous growth of ports and airports, which are the main across-border trading outlets. The World Bank’s Logistics Performance Index 2014 puts Malaysia at the top ranking of the upper income economies. Malaysia is grouped together with many high income economies as a “logistically friendly” country2.

1 MITI (1996), Second Industrial Master Plan, 1996-2005 – Executive Summary, Ministry of International Trade and Industry, Malaysia, pp. 10-13 2 World Bank (2014), Connecting to Compete 2014 – Trade Logistics in the Global Economy 53

Figure 4.1: IMP2 - Manufacturing++ Strategy

Continuous Productivity Improvement (High technology emphasis)

Backward integration IMP-1 Forward integration of value chain Emphasis of value chain

R&D Product Assembly & Distribution Marketing Design Production

Source: MITI (1996)

Overview on Logistics Value Chain Logistics is basically concerned with moving physical goods from one location to another for the purpose of trade. It may be from business to customers within the country’s borders or across borders. When it involves cross border trade, trades facilitation becomes crucial to economic growth. Logistics, according to the Council of Logistics Management3, “is the process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements." Note that this definition includes inbound, outbound, internal and external movements, and return of materials for environmental purposes.

The logistics value chain4 is one part of an enterprise’s value chain, which includes such external logistics activities as delivery of raw materials and finished goods, and also involves such internal logistics activities as production and selling. Logistics is used to optimize and integrate the resources, while the logistics value chain is used to design and plan the value-added activities in the logistics process. Figure 4.2 illustrates a conceptual view of a logistics value chain.

3 Council of Logistics Management, http://www.clm1.org/mission.html , 12 Feb 98 4 Xingjian Zhou (2013), Research on Logistics Value Chain Analysis and Competitiveness Construction for Express Enterprises, American Journal of Industrial and Business Management, 2013, 3, 131-135, (http://www.scirp.org/journal/ajibm) 54

Figure 4.2: Logistics Value Chain

Source: Zhou (2013)

Import and export procedures largely refer to: "the activities (practices and formalities) involved in collecting, presenting, communicating and processing the data required for movement of goods in international trade"5. Trade facilitation6, which is the simplification and harmonisation of international trade procedures including import and export procedures, is an important aspect of cross border trading activities. Trade facilitation is a key policy for customs. Customs has a major role to play at all levels of facilitation, in particular: i. helping to define the policy space ii. drawing up the framework and rules of implementation, and then iii. putting into place the tools and processes at operational level

The OECD believes that trade facilitation agreements can reduce trade transaction costs by 13% to 15% in developing countries. However, there are the immediate costs of implementing measures covered by a trade facilitation agreement. According to the World Bank, this would cost from $7million to $11million. It is argued that the costs of not implementing the agreement may be far higher than the immediate implementation

5 European Commission: Trade Facilitation http://ec.europa.eu/taxation_customs/customs/policy_issues/trade_falicitation/index_en.htm 6ITC 2013, WTO Trade Facilitation Agreement – A Business Guide for Developing Countries. International Trade Centre, Geneva 55 costs, in terms of how trade facilitation can contribute to reaching development goals as illustrated in Figure 4.3.

Malaysia has focused its trade facilitation7 efforts on developing a new agreement on trade facilitation aimed to address issues relating to:  freedom of transit of goods  fees and formalities connected with importation and exportation  publication and administration of trade regulations

Figure 4.3: Outcome of Trade Facilitation Agreement8

Source: ITC 2013

Such an agreement would ensure reform in multilateral rules and bring benefits in terms of providing faster and more efficient clearance of goods, reduction in cost of doing business and more transparent and predictable international trade. These efforts would contribute to the efficiency of the logistics chain. Trade facilitation in Malaysia is closely aligned with the World Trade Organisation, WTO definition which states that:

“The Trade Facilitation Agreement contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade

7 MITI: Trade Facilitation: http://www.miti.gov.my/ 8 Note: The ultimate objective of Trade Facilitation Agreement is poverty reduction. In the case of Malaysia, the objective outcome would be achieving a high income status. 56 facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area.”

Key Elements for Value Chain Analysis for RURB

There are different logistics chain or models that have been develop for various studies with their respective defined objectives. These objectives include benchmarking logistics performance, examining policy implementation and strategy improvement, facilitating international harmonisation of trade, and so forth.

The purpose of value chain analysis here is to review the regulatory framework and identify those aspects which have contributed to or stifled the efficiency and growth of the logistics chain. The focus is on reducing the unnecessary regulatory burdens (RURBs) imposed on businesses across the logistics chain. These unnecessary burdens will be identified by getting the perspectives of businesses in the logistics chain.

The key outputs of this study will be the identification of the unnecessary burdens, and options to reduce or eliminate them. The options identified will be aimed at both short- term solutions (quick-wins) and long-term solutions. The recommendations will be forwarded to the appropriate committees for their decision and action.

As we are concerned with the growth of our trading economy, the study will focus on the movement of goods across the country’s borders, that is, the import and export of goods by sea. It is crucial to the analysis that the value chain approach used here has three key features:

1. The value chain should enable the analysis of the regulatory interventions along the entire length of the total value chain. This will facilitate identifying on which stages of the logistics chain the various regulatory regimes and their implementation impact 2. The processes in the value chain are identified in order to facilitate the analysis of the flow of physical goods from shippers (exporters) to consignees (importers). This enables the identification of unique requirements for handling different types of goods 3. The value chain identifies all the logistics stakeholders – logistics business players, their customers and suppliers, and the regulators. This enables identifying how regulation impacts on these stakeholders

The Seven-step Sea Freight Transportation Model

Freight forwarders play the important role of managing the transportation of goods across the globe for exporters and importers. They provide the services that ensure

57 goods to be moved meet all necessary conditions to pass through customs and that all the necessary paperwork is in order, as well as ensuring that goods are properly handled. In other words, freight forwarders ensure the safety, efficiency and effectiveness of cargo packing, handling and delivery as well and managing the paperwork and customs clearance for exporters and importers.

The involvement of the freight forwarders can be illustrated in the transportation chain as in Figure 4.4 below9. The involvement starts with the shipper (exporter) until the goods reach the consignee (importer) of the country of destination.

Figure 4.4: Export-Import Cargo Transportation Chain

Source: Transporteca, https://www.transporteca.com/information/shippingsteps

There are many players involved in the transportation of goods across borders (the logistics chain). These involve basically five physical and two documentation steps, starting from the shipper (goods exporter) to the consignee (goods importer). Costs and time (delays) are key factors in the supply chain. Costs incurred in these steps and have to be borne by either the shipper or the consignee. As such clear agreement is crucial to avoid surprises and disruption. Figure 4.5 illustrates the five physical steps of transportation. The freight forwarder remains the main player who frequently provides the integrated logistics of managing the other players and the documentation requirements across the logistics chain from shipper to consignee. In other words, the freight forwarder arranges and provides all physical services and the management services for the shipper or the consignee.

Export haulage which is the movement of cargo from the shipper’s to the forwarder’s premise (origin warehouse) is the first physical part of the logistics chain. The goods are moved by truck (can be by rail or a combination). The origin warehouse is not only a temporary storage but also acts as an export consolidation centre in the case of “less container load” or LCL cargo. There are many different costs involve in the export and import of goods and who pays for which costs will depend on the sales agreement. The importer (buyer) may be paying ex-factory or ex-works price and the purchase

9 Transporteca: The Seven Steps of International Shipping, https://www.transporteca.com/information/shippingsteps

58 may be Freight-On-Board (FOB). Agreement may be made under such terms as Delivery-At-Place (DAP), Delivery-Duty-Paid (DDP), Delivery-Duty-Unpaid (DDU), costs of goods and insurance (C&I), Cost-Insurance-Freight (CIF), among many others10. The terms in the import-export agreement will define who pays for which costs involved.

Figure 4.5: The Seven Steps of International Shipping

Source: Transporteca, https://www.transporteca.com/information/shippingsteps

Export customs clearance is customs formalities imposed to meet regulatory requirements of the exporting country. Customs clearance is the transaction whereby a declaration is developed and required documents are submitted to authorities (the Customs), and is performed by companies holding valid customs licences, so-called customs house brokers. Many forwarding companies provide customs brokerage services as part of their total logistics services. The export customs clearance step must be completed before the cargo can leave the country of origin, and if not performed by the freight forwarder, often required to be completed before the cargo enters the forwarders origin warehouse.

Once the cargo reaches the origin warehouse, origin handling can go ahead. It covers all physical handling and inspections of the cargo from receiving until it is loaded on a ship in a container. There are many activities involving many parties in origin handling but the freight forwarder has the responsibility of managing these activities. The physical activities include receiving the cargo, inspecting them (tallying), planning for loading, consolidating for LCL cargo, stuffing the container, moving to port for loading onto ship. Who pays for the work will depend on the agreement made between the shipper and the consignee.

On the ocean freight the freight forwarder decides on the shipping line to ship from origin to destination in order to meet the specified timeline for the shipment. Shipper and consignee do not have any interaction with the shipping line as the forwarder has contact of carriage for the container with the shipping line. The cost of the ocean freight will be charged to the shipper or consignee depending on the terms of the agreement.

10 How To Export Import.Com: http://howtoexportimport.com/default.aspx 59

There are other surcharges and costs involved such as bunker adjustment factor, currency adjustment factor, insurance, which will be passed to the shipper of consignee.

Import customs clearance can typically begin before the cargo arrives at its destination country. As for export customs clearance, it is a formality where a declaration is developed and submitted together with relevant documents enabling authorities to register and levy any customs duty on the shipment. Import customs clearance is performed by the freight forwarder or an agent of the freight forwarder, or by a customs broker appointed by the consignee. The import customs clearance process must be completed prior to the cargo leaving a customs bonded area in the country of destination. Typically, that means before the cargo leaves the destination warehouse of the forwarder or the forwarders agent.

As for the destination, cargo handling is also required to meet requirements of the destination country before it can be released to a consignee. In short, destination handling includes transfer of the container from the ship to shore and from the port to the forwarder's destination warehouse. It also includes unpacking of the container and preparing the cargo for the consignee to collect. Destination handling is covered by multiple destination charges and always performed by the freight forwarder or an agent appointed by the freight forwarder. It can be charged to the shipper or consignee, but will always need to be paid in full before the cargo can be surrendered to the consignee. Again, if the agreement is that the shipper pay for ocean freight, and the consignee pay for destination charges, it is in fact the shipper who decides who the consignee uses to do the destination handling. As discussed for origin charges that can create some friction or surprises for the consignee who has not planned for it.

Import haulage is the last leg of the transportation is the actual delivery of the cargo to the consignee. It can either be performed by the freight forwarder or a local transportation company appointed by the consignee. If this part of the transportation is being arranged by the shipper, it would normally make sense to use a freight forwarder which can also arrange for import haulage. The import haulage typically covers transportation to a specific address, but not unloading from the truck, which is the responsibility of the consignee.

This transportation model illustrates the crucial logistics processes and the primary documentation requirements for import and export of goods by sea. The processes will enable the identification of the key businesses in the logistics chain and then the regulations and regulatory regimes affecting them.

Cold Chain Logistics

A specialised area in freight logistics is the cold chain. The cold chain refers to the management of the temperature of perishable products in order to maintain quality and safety from the point of slaughter or harvest through the distribution chain to the final

60 consumer11. A cold chain is a temperature-controlled supply chain. An unbroken cold chain is an uninterrupted series of storage and distribution activities which maintain a given temperature range. It is used to help extend and ensure the shelf life of products such as fresh agricultural produce, seafood, frozen food, photographic film, chemicals and pharmaceutical drugs. Such products, during transport and when in transient storage, are called cool cargo. Unlike other goods or merchandise, cold chain goods are perishable and cannot be stored for indefinite periods of time. They always en route towards end use or destination, even when held temporarily in cold stores and hence commonly referred to as cargo during its entire logistics cycle.12 Cold chain logistics incorporate temperature control (refrigeration) in the normal logistics chain. The major sectors served are the food and beverages and the bio-pharmaceuticals.13 A typical cold chain logistics infrastructure is shown in Figure 4.6 below.

Figure 4.6: Cold Chain Logistics Infrastructure

Source: Sapra R. and Joshi S. (2013)

Logistics Value Chain Models There are many different logistics chain models developed for different purposes of analyses. In this section an overview examinations of the various models are made. The WTO Agreement on Trade Facilitation14 is a complex model which involves and analyses many different aspects of international trade. The simplified framework showing the various aspects is illustrated as in Figure 4.7. The aspects that have direct impact on logistics include:

11 Global Cold Chain alliance; http://www.gcca.org/about-us/the-cold-chain/ 12 European Business Journal, Premiere Logistics Netherlands B.V., http://www.european-business- journal.com/premiere_logistics_netherlands_bv/company_news/our_very_own_unit_of_cold_chain_m anagement/ 13 Sapra R. and Joshi S. (2013), Cold Chain Logistics, Welingkar Institute of Management and Research; http://www.slideshare.net/businessdesign2011/cold-chain-logistics?related=1

14 WTO: Implementing the WTO Agreement on Trade Facilitation: http://mpoverello.com/2014/04/29/implementing-the-wto-agreement-on-trade-facilitation/

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 Import, Export and Transport Formalities  Release & Clearance of Goods  Movement of Goods under Customs Control  Border Agency Cooperation  Publication & Availability of Information  Customs Cooperation

The WTO Trade Facilitation Agreement15 is based in four principles or pillars as illustrated in Figure 4.8. The fundamental principles are transparency, simplification, harmonization, and standardization. To achieve these principles, full cooperation between government authorities and with the business community is essential.

Figure 4.7: WTO Agreement on Trade Facilitation Framework (Simplified)

Source: http://mpoverello.com/2014/04/29/implementing-the-wto-agreement-on-trade-facilitation/

15 UNECE, WTO Trade Facilitation Agreement, http://tfig.unece.org/contents/what-involve.htm 62

Figure 4.8: Principles for Trade Facilitation

Trade Facilitation Principles

Transparency Simplification Standardisation Harmonisation

The Four Pillars

Source: UNECE, http://tfig.unece.org/contents/what-involve.htm

Transparency within government promotes openness and accountability of a government's and administration's actions. It entails disclosure of information in a way that the public can readily access and use it. This information may include laws, regulations and administrative decisions of general application, budget, procurement decisions and meetings. Regulatory information should be published and disseminated, when possible, prior to enforcement to allow parties concerned to take note of it and make necessary changes. Furthermore, relevant stakeholders and the general public should be invited to participate in the legislative process, by providing their views and perspectives on proposed laws prior to enactment. Simplification is the process of eliminating all unnecessary elements and duplications in trade formalities, processes and procedures. It should be based on an analysis of the existing or current practices, the “as-is” situation.

Harmonization is the alignment of national procedures, operations and documents with international conventions, standards and practices. It can come from adopting and implementing the same standards as partner countries, either as part of a regional integration process or as a result of business decisions.

Standardization is the process of developing formats for practices and procedures, documents and information internationally agreed by various parties. Standards are then used to align and, eventually, harmonize practices and methods.

Based on these principles the United Nations Centre for Trade Facilitation and Electronic Business, UN/CEFACT formulated the Buy-Ship-Pay Model to describe the main processes and parties in the international supply chain. The supply chain

63 ensures that goods are ordered, shipped and paid for while complying with regulatory requirements and supporting trade security. The Buy-Ship-Pay model identifies the key commercial, logistical, regulatory and payment procedures involved in the international supply chain and provides an overview of the information exchanged between the parties throughout its various steps. The model presents a "top-down" view of the supply chain linking the detailed "bottom-up" actions derived from the business requirements specified in the UN/CEFACT standards development process. The Figure 4.9 illustrates the business processes and transactions that are included in the Buy-Ship-Pay model. Only the SHIP part is shown with the two top levels. Below that level, business process views of the named transactions are stored in the model.

Figure 4.9: UN/CEFACT BUY-SHIP-PAY Model

Source: UNCEC, http://tfig.unece.org/contents/buy-ship-pay-model.htm

The model facilitates Business Process Analysis efforts in various ways. It can be used in the scope phase by providing an overview, i.e. guidelines and schemata at a higher level. Next, it can be used during the process development or the “to-be modelling” in the detailed process modelling phase. The model identifies four main business partner types: Customer, Supplier, Intermediary and Authority. The types or organizations that make up these four categories, and the roles they play, are described. The Table 4.1 below identifies the main ones.

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Table 4.1: Main Business Partners in International Trade Customer Supplier Intermediary Authority Buyer Seller Transport Service Supplier Customs Importer Exporter Freight Forwarder Environment Consignee Consignor Bank Agriculture Ship to Ship from Insurance Provider Standards Payer Payee Customs Agent Consular Broker Health Commission Agent Port Intervention Board (EU) Chamber of Commerce Source: UNCEC, http://tfig.unece.org/contents/buy-ship-pay-model.htm

Logistics Performance Index (LPI): Inefficient logistics raises the costs of trading and reduces the potential for global integration. This is a hefty burden for developing countries trying to compete in the global marketplace. Since 2007, the World Bank has been monitoring the Logistics Performance Index to inform countries on the role of logistics for growth and the policies to support it in such areas as infrastructure, service provision, and cross-border trade facilitation.16

Figure 4.10: World Bank LPI Model

Input and Outcome LP Indicators

Customs Timeliness

Supply International Infrastructure chain shipments service delivery Service Tracking quality and tracing

Service delivery Areas for policy performance regulations (Outcomes) (Inputs) Time, cost, reliability

Source: World Bank: Connecting to Compete 2014

16 World Bank (2014), Connecting to Compete 2014 – Trade Logistics in the Global Economy 65

The World Bank LPI Model is illustrated in Figure 4.10. The LPI analyses countries in six components (international and domestic): i. The efficiency of customs and border clearance (“Customs”). ii. The quality of trade and transport infrastructure (“Infrastructure”). iii. The ease of arranging competitively priced shipments (“Ease of arranging shipments”). iv. The competence and quality of logistics services—trucking, forwarding, and customs brokerage (“Quality of logistics services”). v. The ability to track and trace consignments (“Tracking and tracing”). vi. The frequency with which shipments reach consignees within scheduled or expected delivery times (“Timeliness”).

The LPI allows 166 countries to benchmark each other on their logistics performance and thereby provides the basis and incentive to continuously improve the key logistics component for better economic performance. Based on the LPI, Malaysia is ranked in the top position of upper middle income economies for 2014 with a LPI score of 3.59 (3.49 in 2012). With the score, Malaysia can be classified as a “logistically friendly” together with the high income economies. Although the LPI for Malaysia continued to improve over the last few years, there is still much to be done to ensure that the country becomes a stable performer as a logistically friendly country. The high income economies still out performs the upper middle income economies by 30%. Although the LPI provides useful information and benchmarks, it is based on the survey of freight forwarders, rather than the shippers and the other logistics players in the supply chain who have the key interest in the movement of goods. It nevertheless focuses attention on improving the logistics chain. The country is moving in the right direction as it continues to focus on soft infrastructure enhancements based on regulatory reform, and less on basic hard infrastructure investments. It is crucial to ensure that hard infrastructure is improved as the volume of goods grows as the economy grows. More important may be the need to improve logistics capacities and to ensure a balanced growth. The human resource capacities across the logistics chain continues to be a challenge in the areas of knowledge, skills and numbers. With the enhancement of the operating systems with information technology, new knowledge workers are needed to ensure the effectiveness and efficiency of the logistics chain.

A recent study in 2014 conducted by Frost and Sullivan for the Economic Planning Unit (EPU) on “Developing an Empirical and Diagnostic Base to Support Strategic Planning for the Freight Logistics Industry” takes the strategic view of the Malaysian freight logistics industry as consisting of eight distinct components, namely:

1) Air Transport Infrastructure 2) Sea Transport Infrastructure 3) Rail Transport Infrastructure 4) Road Transport Infrastructure

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5) Warehousing 6) Trade facilitation 7) Sabah and Sarawak 8) Others – Halal logistics and ASEAN Economic Community

This study defines logistics as “an ecosystem of economic activities that involves the sourcing and procurement, assembly and packing, storage, handling and transportation of freight. Freight logistics activities also involve managing the process of documentation and information flow between production and consumption points in the country as well as globally.” Frost and Sullivan Analytical Model is a 5-stage Modular perspectives of the freight logistics industry17. Figure 4.11 below illustrates the 5-stage Module.

Figure 4.11: Frost and Sullivan Analytical Model

(5) Strategies for the Development of Freight Logistics Industry

(3) Performance Indicators for (4) International Competitiveness of Freight Logistics Industry Freight Logistics Industry

(2) Qualitative and Quantitative Assessment of Freight Logistics (a) Operators and (b) End Users

(1) Profile of Freight Logistics Industry

Source: Frost and Sullivan, 2014

The World Bank methodology on Trading Across Borders18 focuses on regulations and regulatory practices that impact on the economy, i.e., “whose governments have managed to create a regulatory system that facilitates interactions in the marketplace and protects important public interests without unnecessarily hindering the development of the private sector—in other words, a regulatory system with strong institutions and low transactions costs.” Specifically, it measures how much time, how many documents and what it costs to export and import by sea transport. The World Bank Model is illustrated in Figure 4.12 below. The focus on land and sea transportation is largely because they are the major modes for the export and import

17 Frost and Sullivan 2014, Developing an Empirical and Diagnostic Base to support Strategic Planning for the Freight Logistics Industry – Final Report, Economic Planning Unit Malaysia 18 World Bank (2013), Doing Business 2014, Understanding Regulations for Small and Medium-size Enterprises, http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-reports/English/DB14- Full-Report.pdf 67 of goods. Export and import through air transport represents relatively a smaller fraction of the overall volume.

Figure 4.12: World Bank Trading Across Borders Model

Time Time To To export Cost Cost import Full 20-foot container Documents Documents

Import

Export

Port and Customs and Inland terminal border transport handling agencies Source: World Bank Doing Business 2013

In this analytical framework, the concerns of businesses across the logistics chain are costs, time (delays), and documentation (information). These three parameters are key challenges for the management of productivity in logistics from the regulatory perspective and are significant burdens on businesses.

This Doing Business methodology for trading across borders measures the time and cost (excluding tariffs) associated with exporting and importing a standardized cargo of goods by sea transport. The time and cost necessary to complete 4 predefined stages (document preparation; customs clearance and inspections; inland transport and handling; and port and terminal handling) for exporting and importing the goods are recorded; however, the time and cost for sea transport are not included. The World Bank Doing Business provides snap shots of a selected case to calculate the ranking score for a country and for Malaysia, Port Klang (West Port and North Port) is used as the case. The methodology makes two sets of assumptions19.

Assumptions about the traded goods: The traded product travels in a dry-cargo, 20- foot, full container load. It weighs 10 tons and is valued at $20,000. The product:  Is not hazardous nor does it include military items.  Does not require refrigeration or any other special environment.

19 World Bank Doing Business Methodology (2014), http://www.doingbusiness.org/methodology/trading- across-borders

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 Does not require any special phytosanitary or environmental safety standards other than accepted international standards.  Is one of the economy’s leading export or import products

Assumptions about the business: The business:

 Is located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.  Is a private, limited liability company.  Does not operate in an export processing zone or an industrial estate with special export or import privileges.  Conducts export and import activities but does not have any special accreditation, such as an authorized economic operator status.  Is 100% domestically owned

These assumptions are necessary for comparative ranking across economies at different levels of development. The measures of documentation, time and costs are as illustrated in Table 4.2.

Table 4.2: What do the Trading across Borders indicators measure? Documents required to export and import (number)  Bank documents  Customs clearance documents  Port and terminal handling documents  Transport documents Time required to export and import (days)  Obtaining, filling out and submitting all the documents  Inland transport and handling  Customs clearance and inspections  Port and terminal handling  Does not include sea transport time Cost required to export and import (US$ per container)  All documentations  Inland transport and handling  Customs clearance and inspections  Port and terminal handling  Official costs only, no bribes Source: World Bank, http://www.doingbusiness.org/methodology/trading-across-borders

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Sea Freight Logistics Stakeholder Analysis

Stakeholder analysis can be analysed from two aspects. The first aspect is the process or activity of the flow of the goods, which is analysed through the transportation or logistics value chain. This will identify of the logistics stakeholders for the import-export trade and the logistics activities within the country. The key stakeholders are businesses and regulators. The other aspect concerns the types or characteristics of product being handled. The product types will define the management, handling, storage and transportation requirements of the cargo. Table 4.3 summarises the analysis framework for stakeholder.

Table 4.3 Analysis Framework Aspect Framework Stakeholder Data collection & analysis regulatory analysis Process & Transportation/Logistics  Businesses  Acts & regulations activity Value Chain  Trade associations  Regulatory regimes  Shippers  Regulators  Forwarders  Standards Product Types of cargo/services  Hauliers  Guidelines  Dangerous goods  Ports  Reports  Dry bulk  Intermediaries  Statistics  Liquid bulk  Supporting  News and blogs  Containers industries  Web reviews  Break bulk  Regulators  Public consultation  Ro-ro  others  Expertise inputs  Special others  others Source: Analysis framework

And every product requires its own method of transport, or packaging. Five types of cargo can be distinguished: container cargo, liquid bulk, dry bulk, break bulk and ro- ro.

Container cargo form the most integral part of the entire shipping industry, trade, and transport. The shipping containers are the structures that store various kinds of products that need to be shipped from one part of the world to another. Moving containers protect the contents on the long journeys they make and ensure they make it in one piece. Depending on the type of products to be shipped or the special services needed from them, container units may vary in dimension, structure, materials, construction etc. Various types of shipping containers are being used today to meet requirements of all kinds of cargo shipping. Marine Insights (http://www.marineinsight.com) lists 16 types of container units and designs for shipping cargos, the most common being the ISO dry storage container. The others are flat rack, open top, tunnel, open side storage, double doors, refrigerated ISO,

70 insulated or thermal, cargo storage roll, tanks, half height, car carriers, intermediate bulk shift, special purpose, and swap bodies containers20.

The refrigerated ISO containers temperature regulated shipping containers that always have a carefully controlled low temperature. They are used for shipment of perishable substances like fruits and vegetables over long distances.

Liquid bulk21 a commodity carried in specially built vessels, loaded and unloaded via pipelines. The liquid products which are often transported on big tankers or through a pipeline to the next destination. This includes liquid chemicals, petroleum products and crude palm oil.

Dry bulk refers to grain, coal, iron ore, cement, sugar, salt and sand. They are not packaged separately, but transported in large quantities in the hold of a ship, wagon or lorry.

Break bulk cargoes, such as iron, steel, timber, plywood, paper, sawn wood, bags of cocoa, rolls of steel, machineries and parts, are all products that can be transported in a container or simply put on a vessel. As the name suggests, it breaks easily. To be able to lift this general cargo, it is often packaged on pallets, in crates or racks. A crane or forklift truck can easily load or discharge the goods.

Ro-ro refers to 'roll on / roll off'. This name explains how the cargo is discharged and loaded. This concerns cargo that can be driven which is only done by especially trained drivers. Ro-ro is used for cars, busses, trucks, agricultural vehicles and cranes. To transport as many of these vehicles in one go, enormous ro-ro vessels have been built.

Dangerous goods or hazardous materials: The handling, transportation and storage of hazardous materials or dangerous goods have special safety, health and environmental requirements. Dangerous goods will include prohibited products such as dangerous drugs. Hazardous materials is defined as “A substance or material, including a hazardous substance, which has been determined by the Secretary of Transportation to be capable of posing an unreasonable risk to health, safety and property when transported in commerce, and which has been so designated.”22 This means any material that, because of its chemical properties, may cause injury, loss of life, damage to property or the environment if involved in an accident during transportation. A minor transportation accident can quickly escalate into a major catastrophe when hazardous materials are involved. There are basically two sets of regulations covering the shipping of hazardous materials: a. International Maritime Dangerous Goods Code regulations and b. various local regulations governing production, handling, transportation, storage and sales of hazardous materials

20 Marine Insights; http://www.marineinsight.com/ 21 Port of Antwerp; http://www.portofantwerp.com/en/types-goods, North Port, Klang; http://www.northport.com.my/ 22 The U. S. Department of Transportation definition of hazardous materials 71

The shipper or their agent is responsible for having their Hazardous Material cargo in compliance with all the regulations at the time the cargo is offered for transportation (at the time of pick up from the shipper’s facilities, or at the time of delivery to the carrier’s terminal). The carrier’s (highway, ocean, rail, air) responsibility is to determine that the shipper has, in fact, complied to the regulations before the carrier transports the cargo. A signed “shipper’s certification” statement is required.23

To achieve the harmonisation of local regulations with international codes, the Ministry of International Trade and Industry (MITI) acts as the principal facilitator on the Globally Harmonized System (GHS) implementation24. The Globally Harmonized System of classification and labelling of chemicals is an internationally agreed-upon system, created by the United Nations.

Dangerous goods are grouped into different classes and subdivisions. There are nine main classes listed as Class 1 to Class 9 with some classes having further subdivisions. The ASEAN Protocol for Dangerous Goods25 listed the classes as follows: i. Class 1: Explosives ii. Class 2: Division 2.1: Flammable gases Division 2.2: Non-flammable, non-toxic gases Division 2.3: Toxic gases iii. Class 3: Flammable liquids and liquid desensitized explosives iv. Class 4: Division 4.1: Flammable solids, self-reactive substances and solid desensitized explosives Division 4.2: Substances liable to spontaneous combustion Division 4.3: Substances which in contact with water emit flammable gases v. Class 5: Division 5.1: Oxidizing substances Division 5.2: Organic peroxides vi. Class 6: Division 6.1: Toxic substances Division 6.2: Infectious substances vii. Class 7: Radioactive material viii. Class 8: Corrosive substances ix. Class 9: Miscellaneous substances and articles

23 Malaysia Shipping “Hazardous material handling for transportation”; http://malaysiashipping.info) 24 MITI, Status on GHS (Globally Harmonized System) implementation (As at November 2012); http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_32bac800-c0a8156f- 34c634c6-b5a59050 25 ASEAN Protocal Dangerous Goods; Article 3 –Classification; http://www.asean.org/communities/asean-economic-community/item/protocol-dangerous-goods 72

Standard Industrial Classification of Freight Logistics

At the industry level, the movement of goods and materials in freight logistics is classified into four modes of transportation: air, sea, rail, pipeline and road. The Malaysian Standard Industrial Classification 2008 (MSIC2008)26 codes these activities under the heading Transportation and Storage in Section H. Although pipeline is in the classification, this is not a major logistics concern in this study, and as such is left out of the analysis. This Section H includes the provision of passenger or freight transport, whether scheduled or not, by rail, pipeline, road, water or air and associated activities such as terminal and parking facilities, cargo handling, storage, etc. Included in this section is the renting of transport equipment with driver or operator, and postal and courier activities.

This section excludes maintenance and repair of motor vehicles and other transportation equipment, the construction, maintenance and repair of roads, railroads, harbours, airfields, as well as the renting of transport equipment without driver or operator. The Table 4.4 below gives the classifications of activities for freight transport together with the MSIC2000 codes.

Table 4.4: MSIC 2008: TRANSPORTATION AND STORAGE27 Class Item Description MSIC2000 DIVISION 49: LAND TRANSPORT AND TRANSPORT VIA PIPELINES Group 491: Transport via railways 4912 Freight rail transport Excludes: (a) storage and warehousing, see 52100 (b) freight terminal activities, see 52211 (c) cargo handling, see 5224 49120 Freight transport by inter-urban, suburban and urban 60100p railways DIVISION 49 : LAND TRANSPORT AND TRANSPORT VIA PIPELINES Group 492 : Transport via roads 4923 Freight transport by road Includes: (a) logging haulage (b) stock haulage (c) refrigerated haulage (d) heavy haulage (e) bulk haulage including haulage in tanker trucks (e.g. palm oil tanker) (f) haulage of automobiles (g) transport of waste and waste materials, without collection or disposal (h) furniture removal (i) renting of trucks with driver (j) freight transport by man or animal-drawn vehicles (k) transport of water, liquids, etc. by trucks Excludes: (a) log hauling within the forest, as part of logging operations, see 024 01 (b) distribution of water by trucks, see 36001 (c) operation of terminal facilities for handling freight, see 52211 (d) crating and packing services for transport, see 52299

26 Department of Statistics Malaysia, Version 1.0, Malaysian Standard Industrial Classification 2008 27 Transportation activities via pipelines has not been included in this table. 73

(e) post see 53100 and courier activities, see 53200 (f) waste transport as integrated part of waste collection activities, see 3811, 3812 49230 Freight transport by road 60230 DIVISION 50 : WATER TRANSPORT Group 501 : Sea and coastal water transport 5012 Sea and coastal freight water transport Excludes: (a) storage of freight, see 52100 (b) harbour operation and other auxiliary activities (e.g. docking, pilot age, lighter age, vessel salvage), see 5222 (c) cargo handling, see 5224 50121 Transport of freight overseas and coastal waters, whether 61102 scheduled or not 50122 Transport by towing or pushing of barges, oil rigs 61103 DIVISION 50 : WATER TRANSPORT Group 502 : Inland water transport 5022 Inland freight water transport Includes: transport of freight inside harbours and ports 50220 Transport of freight via rivers, canals, lakes and other inland 61202 waterways Includes: transport of freight inside harbours and ports DIVISION 51 : AIR TRANSPORT Group 512 : Freight air transport 5120 Freight air transport 51201 Transport freight by air over regular routes and on regular 62109 schedules 51202 Non-scheduled transport of freight by air 62209p Includes: (a) launching of satellites and space vehicles (b) space transport 51203 Renting of air-transport equipment with operator for the 62201p purpose of freight transportation DIVISION 52 : WAREHOUSING AND SUPPORT ACTIVITIES FOR TRANSPORTATION Group 521 : Warehousing and storage 5210 Warehousing and storage Includes: (a) operation of storage and warehouse facilities for all kind of goods: operation of grain silos, general merchandise warehouses, freight, refrigerated warehouses, storage tanks, etc. (b) storage of goods in foreign trade zones (c) blast freezing Excludes: (a) parking facilities for motor vehicles, see 52213 (b) operation of self-storage facilities, see 68102 (c) rental of vacant space, see 6810 52100 Warehousing and storage services 63020 DIVISION 52 : WAREHOUSING AND SUPPORT ACTIVITIES FOR TRANSPORTATION Group 522 : Support activities for transportation 5221 Service activities incidental to land transportation Excludes: cargo handling, see 5224 52211 Operation of terminal facilities 63039p, Includes: operation of terminal facilities such as railway stations, bus 63031 stations, stations for the handling of goods, freight terminal activities, etc. 52212 Towing and road side assistance 50201p, Excludes: maintenance and repair of motor vehicles with towing 50202p, services, see 45201 60100p

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52213 Operation of parking facilities for motor vehicles (parking 630 32 lots) Excludes: parking meter coin collection services, see 82990 52214 Highway, bridge and tunnel operation services 63033 52219 Other service activities incidental to land transportation 63039p n.e.c. Excludes: liquefaction of gas for transportation purposes, see 19201 5222 Service activities incidental to water transportation Excludes: (a) cargo handling, see 5224 (b) operation of marinas, see 93292 52221 Port, harbours and piers operation services 63035 Includes: navigation, pilotage and berthing activities 52222 Vessel salvage and refloating services 63034

52229 Other service activities incidental to water transportation 63039p n.e.c.(3) Includes: lighterage and lighthouse activities 5223 Service activities incidental to air transportation Excludes: (a) cargo handling, see 5224 (b) operation of flying schools, see 8530, 8549 52231 Operation of terminal facilities (2) 63036p Includes: the operation of airway terminal, etc. 52232 Airport and air-traffic-control activities 63036p 52233 Ground service activities on airfields 63036p 52234 Fire fighting and fire-prevention services at airports 63036p 52239 Other service activities incidental to air transportation n.e.c. 63036p 5224 Cargo handling Includes: the loading and unloading of goods or passengers' luggage irrespective of the mode of transport used for transportation and stevedoring services Excludes: operation of terminal facilities, see 5221, 5222 and 5223 52241 Stevedoring services 63011 52249 Other cargo handling activities n.e.c. 63019 5229 Other transportation support activities Includes: pickup and delivery of goods and grouping of consignments – Integrated system Excludes: (a) courier activities, see 53200 (b) provision of motor, marine, aviation and transport insurance, see 65 12 (c) activities of travel agencies, see 79110 (d) activities of tour operators, see 79120 (e) tourist assistance activities, see 79900 52291 Forwarding of freight 63049p, Includes: 63091p, (a) arranging or organizing of transport operations by rail, road, sea or air 63092p, (b) organizing of group and individual consignments (c) issue and procurement of transport documents and waybills 63099p (d) activities of customs agents (e) activities of sea-freight forwarders and air-cargo agents 52292 Brokerage for ship and aircraft space 63092p, 63099p 52299 Other transportation support activities n.e.c. 63092p, Includes: 63099p (a) goods-handling operations (e.g. temporary crating for the sole purpose of protecting the goods during transit, uncrating, sampling, weighing of goods) (b) packaging activities incidental to transport

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DIVISION 53 : POSTAL AND COURIER ACTIVITIES Group 531 : Postal activities 5310 Postal activities Excludes: postal giro, postal savings activities and money order activities, see 64 19 53100 National postal services 64110p Includes: the pick-up, transport and delivery (domestic or international) of mail and parcels. The activity includes sale of postage stamps, collection of mail and parcels from public letter boxes or from post offices and distribution and delivery. Also includes such activities as mail sorting, mailbox rental, poste restante, etc. 5320 Courier activities Excludes: transport of freight, see (according to mode of transport) 49120, 49230, 5012, 50220, 5120 53200 Courier activities other than national post activities (2) 64120 Includes: the pick-up, transport and delivery of letters and mail-type, usually small, parcels and packages. One or more modes of transport may be involved and the activity may be carried out with either self- owned (private) transport media or via public transport Excludes: all postal activities carried out by Pos Malaysia Bhd. which are classified in Item 53100 National postal services Source: MSIC 2008

The MSIC2008 codes enables the identification of the logistics activities and businesses of interest in this study. However, at the local business level, the logistics business activities have their own taxonomy or classification of business.

Logistics Trade Directory

The Malaysia Logistics Directory classification (msialogistics.com)28 lists the logistics industries into four categories; sea freight, land and rail transport, air freight and supporting industries. This logistics directory is a comprehensive list of freight and shipping services directory in Malaysia and the directory website is managed by a private entity - Marshall Cavendish (Malaysia) Sdn. Bhd. The directory is also supported by the major logistics associations in the country - the MAFF, JoFFA, PFFA, SFFLA and the AMH. This is a practical directory for identifying the key logistics businesses and companies in the country.

The logistics businesses or companies are listed into these four categories as illustrated in Table 4.5 below. There are five categories of businesses for sea freight logistics, six for land and rail transport and six of air freight logistics. These logistics businesses are supported by 112 different supporting logistics industries. There is a total of 3078 companies listed in msialogistics.com, http://www.msialogistics.com.

28 Malaysian Logistics Directory (msialogistics.com), A comprehensive list of freight and shipping services directory in Malaysia; http://www.msialogistics.com/indexMLD.aspx

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Table 4.5: Malaysian Logistics Directory (msialogistics.com) Classification Sea Freight Logistics (5 records) 1. Containerised freight services (7 records) 4. Sea freight forwarding agents (144) 2. Ports of Malaysia (sea and inland) (29) 5. Dry ports (0) 3. Shipping lines/agents (124) Land & Rail Transport (6 records) 1. Container hauliers (22 records) 4. Refrigerated transport (5) 2. Movers (51) 5. Railway services (6) 3. Lorry transport (402) 6. Railway signalling equipment (1) Air Freight Logistics (6 records) 1. Air freight forwarding agent (148 records) 4. Airports – International (5) 2. Airports – Domestic (10) 5. Airlines (25) 3. Airport Ground Handling Agents (3) 6. Courier Services (27) Supporting Industries (112 records) ■Airport Equipment Parts and Supplies (13 records) ■Banks (32) ■Blasting contractors (9) ■Bunker Fuel (1) ■Asset tracking systems (7) ■Boilers - Distributers and Manufacturers (6) ■Bunker Suppliers (8) ■Boiler repairing and cleaning (4) ■Bar code equipment (10) ■Cabins (15) ■Battery - repairing and rebuilding (16) ■Boxes – corrugated and fibre (22) ■Canvass – lorry (2) ■Battery – storage, wholesalers & manufacturers (9) ■Boxes – insulation, metal, paper, wooden (11) ■Chemical cleaning – industrial (14) ■Bio-pharma packing (1) ■Bulk handling (10) ■Cleaning equipment (3) ■Container lifting equipment (10) ■Cranes accessories and parts (6) ■Communication equipment & supplies (9) ■Containers – cargo & freight (40) ■Diving & undersea services (0) ■Computer software – freight & forwarding (39) ■Container leasing (0) ■Dockboards & ramps (1) ■Computer software consultancy (1) ■Container maintenance & repairs (4) ■Electronic commerce services (4) ■Container desiccant – silica gel (4) ■Conveyors & conveyor systems (1) ■Event organiser – air show (1) ■Container hauliers (5) ■Cranes (44) ■Generators (13) ■Integrated logistics solutions (21) ■Forklifts (43) ■Free commercial & industrial zone (3) ■Fenders (2) ■Fire protection systems (6) ■Fumigation (21) ■Gas generators (2) ■Inspection services (9) ■Insurance (35) ■Fleet management systems (14) ■Hand trucks & trolleys (1) ■Freight forwarding agents (411) ■Hardware (19) ■Heat exchangers (2) ■Hoists (15); Lawyers (2) ■Labour contractors (0) ■Leasing services (2) ■Lubricants (22) ■Marine repairs (8) ■Machineries (8) ■Marine contractors (10) ■Marine engineering (5) ■Marine engines (0) ■Marine equipment & supplies (20) ■Marine propellers (0) ■Material handling equipment (68) ■Navigational equipment & supplies (2) ■Packaging materials (22) ■Packing & crating services (10) ■Pallets & skids (37) ■Pest control (1) ■Piracy reporting centre (1) ■Racks (21) ■Radio communication equipment & systems (13) ■Relocation & storage services (15) ■Safety equipment & supplies (13) ■Scrap metal (13) ■Security services (12) ■Shelving – industrial & commercial (3) ■Ship brokers (5) ■Ship chandlers (5) ■Ship classification societies (2) ■Ship management (4) ■Ship builders & repairers (14) ■Shipowners (0) ■Shipping equipment & suppliers (33) ■Slings (1) ■Stevedoring contractors (3) ■Strapping equipment (5) ■Surveyors – marine (16) ■System integrator (1) ■Transport equipment (70) ■Truck – bodies (18) ■Truck – parts (11) ■Truck – repairing & services (3) ■Truck dealers (140 ■Truck distributors (19) ■Truck mounted cranes (0) ■Tugs, barges & salvage companies (7) ■Tyre machinery (2) ■Tyre manufacturers & distributors (38) ■Warehouses – public (40) ■Warehouses equipment & supplies (9) ■Warehouses services – bonded (9) ■Warehouses services – cold storage (6) ■Warehouses services – general (46) ■Waste reduction & disposal services (16) ■Wheels & rims (3) ■Wire ropes (8). Source: msialogistics.com: http://www.msialogistics.com/indexMLD.aspx

Malaysia Portal for Trade Facilitation: myTRADELINK29: The myTRADELINK30 is a Malaysia's trade facilitation web-portal that connects trading communities with the relevant government agencies and also other businesses involved in global trade and logistics. An initiative of the Malaysian Government, led by the Ministry of Finance of

29 myTRADELINK: http://www.mytradelink.gov.my/aboutus 30 Note that myTRADELINK portal has shut down on 7th February 2014 and their e-services are now available at Dagang.Net website; http://www.dagangnet.com/ 77

Malaysia - and operated by Dagang Net Technologies Sdn Bhd. It is a one-stop single window where the trade community can exchange documents required to fulfil regulatory trade processes for import, export or transit via the Internet.

Apart from facilitating trade transactions, myTRADELINK serves as a trade information hub and allows users to streamline their transactional activities. The portal is able to provide the listings of main stakeholders of the import-export logistics communities. The communities identified are in four different categories as:  Trade associations  Port operators (sea and inland ports)  Port authorities  Permit issuing agencies The trade associations are those logistics players involved in cross border trading activities for air, land and sea trade. These are listed in the Appendix as Table 4.6.

Port Operators

Before the advent of port privatisation with the Port Privatisation Act 1990, the ports in the country were operated and managed by ports authorities themselves. With the new Act many of the ports have been privatised and they are operated by private companies and holding companies listed in the stock market. Some of the smaller ports especially those located in East Malaysia have not been privatised and are still being operated by the port authorities themselves. The list of ports operators and the ports authorities are listed in the Appendix as Tables 4.7 and 4.8.

Permits Issuing Agencies Many products are classified as controlled products that will require import permits to bring into the country. There are various categories of these products and they are controlled for various reasons. For example, there are products which are of strategic interest to the country and under the Strategic Trade Act, the approval has to be obtained from the Ministry of International Trade and Industry, MITI. There are altogether 12 ministries involved in dealing with controlled products and the various agencies or divisions under them are responsible for issuing the necessary permits for such imports. There are the permit issuing agencies (PIA) and Table 4.9 in the Appendix shows the list of them.

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Appendix:

Table 4.6: Import-Export Trade Associations (as of 31 August 2014) No. Name & address Contact 1 Airfreight Forwarders Association of Malaysia Mr. Walter Culas, Chairman (AFAM) 6012-208 2464/03 2284 2000 16-B, Level 2 [email protected] Jalan Kemuja, Bangsar Utama www.afam.org.my 59000 Kuala Lumpur 2 Central Region Shipping Association (CRSA) Mr Santhasagaran A/L Kannu No 149A, 149B, 151B, President Persiaran Raja Muda Musa 03 31673830 42000 Port Klang, Selangor [email protected] 3 Conference of Asia Pacific Express Carriers En Kamarul Azman, President (CAPEC) 03 2241 8550 DHL Express (M) Sdn Bhd, Level 27, Menara TM, [email protected] Jalan Pantai Baharu, 59200 Kuala Lumpur 4 Ejen Penghantaran Sandakan Mr Loo Yat Kiang, President Peti Surat 1735, 90702 Sandakan, Sabah 019-833 6228/089 220331 [email protected] 5 Federation of Malaysia Manufacturers Tan Sri Datuk Yong Poh Kong Wiama FMM No 3, Persiaran Dagang PJU 9 President Bandar Sri Damansara 03 62761211 52200 Kuala Lumpur [email protected] www.fmm.org.my 6 Federation of Malaysian Freight Forwarders Mr Alvin Chua Seng Wah (FMFF) President Wisma SFFLA, [email protected] No 23, Jalan Cemerlang 03 31653082 42000 Port Klang, Selangor 7 Johor Freight Forwarders Association (JOFFA) Mr Toon Teng Fatt, President Wisma Joffa No 71, 07 5125900/01 Jalan Jaya Mas 1 Taman Jaya Mas [email protected] 81300 Skudai Johor www.joffa.com 8 Johor Port Shipping and Forwarding Association Mr Michael Cheah, President (JPSFA) 012-7807128/07 3568531 Wisma JPSFA, 19A Jalan Rosmerah 2/5, [email protected] Taman Johor Jaya, 81100 Johor Bahru 9 KK Forwarding Agents Association Mr Johnson Dai, President Lot 16, Block D, Lorong Buah Salak 3 6012-208 2464/088 388275 Hiong Tiong Industry Centre, 11.5 Kilometer Jalan [email protected] Tuaran, 88450 Kota Kinabalu, Sabah 10 Labuan Logistics Association Mdm Prunella Phoong, AB Enterprise, SU 3414 Jalan Kolam President P.O Box 75, 87008 Wilayah Persekutuan Labuan 087 422902 [email protected] 11 Malaysian Shipowners' Association En Nordin Mat Yusoff, F1/18 Level 1 Citypoint, Kompleks Dayabumi, Chairman Jalan Sultan Hisyamuddin, 50050 Kuala Lumpur 03 22752136 12 North Malaysia Shipping Agent Association Mr Franco Ong, President (NMASA) 04-261 6287

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c/o Pantas Freight Services Sdn Bhd [email protected] No 2-5-19, Harbour Trade Centre GAT Lebuh Macallum, 10300 Penang 13 Padang Besar Forwarding Association Mr Tan Wei Chang, President Yong Seng Chan, No 7 Jalan Station 04 9490239 Padang Besar 02100 Perlis [email protected] 14 Penang Freight Forwarders Association (PFFA) Mr Krishnan Chelliah, President Block A Unit 9, MAS Air Cargo Complex 04 6440514 Penang International Airport, Jalan Garuda [email protected] 11900 Penang 15 Perak Freight Forwarders Association Mr Poon Yoke Sang, President Lot 25886 Gudang KTMB, Jalan Tun Abd Razak 05 5270268 30100 Ipoh Perak [email protected] 16 Persatuan Perkapalan & Penghantaran En Muzamil Abdul Rahman Pelabuhan Kuantan President Aras Marine Services Sdn Bhd, Lot 4.2 Bangunan 012 9837456 / 09 5833150 Perdagangan, Lembaga Pelabuhan Kuantan [email protected] 26080 Kuantan 17 Persatuan Agen Penghantaran Bukit Kayu Hitam En Mohd Johari B Sukaimi D/A Utara Forwarding Agency S/B Chairman No 2 Seri Temin 04 9222155 06050 Bukit Kayu Hitam, Kedah Darul Aman [email protected] 18 Persatuan Agen Perkapalan & Penghantaran En Mat Nawi Mohd Taib, Pelabuhan Terengganu President PT 10734 Aras 1, Taman Chukai Utama, Fasa 4, 09 862 3540/ 3543/ 3544 Jalan Jubang Kurus Chukai, 24000 Terengganu 012 9760570 [email protected] 19 Persatuan Pengusaha Logistik Bumiputra Dato' Samsudin Abd Rahman Wisma SA, No.50, Jalan Anggerik Chairman Mokara 31/47, Seksyen 31 Kota Kemuning, 03-5125 0015 / 03-5125 0186 40460 Shah Alam, Selangor Darul [email protected] [email protected] 20 Sarawak Forwarding Agencies Association Mr Joseph Chung, President Lot 8704, 1st Floor Section 64 082 484778 / 019 8862323 Jalan Pending, 93450 Kuching Sarawak 21 Selangor Freight Forwarders & Logistics Mr Alvin Chua Seng Wah, Association (SFFLA) President Wisma SFFLA, No 23, Jalan Cemerlang 03 31684363 42000 Port Klang, Selangor [email protected] 22 Shipping Association Malaysia (SAM) Mr Ooi Lean Hin, Chairman C/O No 7, Jalan Jurutera U1/23 03 78832600 / 77293778 Section U1 Hicom Glenmarie Industrial Pak ooilh@evergreen- 40150 Shah Alam, Selangor marine.com.my 23 Tawau Forwarding Agent Association 013 8932002 C/O Perkhidmatan Umum Forwarding Agent Jalan Dunlop P.O Box No 2063 91045 Tawau Sabah Source: myTRADELINK; http://www.mytradelink.gov.my/trade-associations

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Table 4.7: Port Operators (as of 31 August 2014) No Company name (port) & address CEO contact Bintulu Port Sdn Bhd (Bintulu Port) Managing Director: Lot 15, Block 20, Kemena Land District 12th En Mior Ahmad Baiti Mior Lub Mile,, Tanjung Kidurong Road Ahmad P.O. Box 996, 97008 Bintulu Sarawak. (086) 251001/20 http://www.bpsb.com.my/ Johor Port Berhad (Johor Port Tanjung Executive Director: Pelepas) En.Abdul Khalid Lal Khan JOHOR PORT BHD 07-2535888 P.O. Box 151, 81707 Pasir Gudang, Johor http://www.johorport.com.my Westport (M) Sdn Bhd (West Port) Executive Chairman: P.O. Box 266, Pulau Indah, Tan Sri Datuk G. Gananalingam 42009 Port Klang, Malaysia 03-31694000 / 31694200 [email protected] http://www.westportmalaysia.com.my Kuantan Port Consortium Sdn Bhd (Kuantan Chief Operating Officer: Port) Mr. Wong Soon Fah Wisma KPC, Km 25, Tanjung Gelang, 09-5833205 P.O.Box 199, http://www.kuantanport.com.my/ 25720 Kuantan, Pahang. Langkawi Port Sdn Bhd (Dermaga Tanjung Muhd Nasir Hj Abdul Aziz Lembung) 04-9665905/9665915 Kompleks Dermaga Tanjung Lembung, Bukit [email protected] Malut, Mukim Ulu Melaka 07000 Langkawi, Kedah Lumut Maritime Terminal Sdn Bhd (Lumut CEO: Maritime Terminal) En. Amin Halim Rasip Pulau Lekir Satu, Jalan Teluk Rubiah, 605-6889166 32040 Sri Manjung, Perak [email protected]

Pelabuhan Tanjung Pelepas Sdn Bhd (Port Chief Executive Officer: of Tanjung Pelepas) En Harun Johari Bangunan Pentadbiran Pelabuhan 07-5042222 Jalan Pelabuhan Tanjung Pelepas TST 507, 81560 Gelang Patah Johor Darul Takzim Penang Port Sdn Bhd (Penang Port) Managing Director: No.1. King Edward Place, YBhg Dato' Ahmad Ibnihajar Georgetown, 10300 Penang 04-210 2211 [email protected] http://www.penangport.com.my Pengkalan Bekalan Kemaman Sdn Bhd 609-8631590, 09-8631707 (Kemaman Supply Base) Bangunan Dermaga Timur, Telok Kalong, P.O.Box 66, 24000 Kemaman, Terengganu Northport (M) Berhad (North Port) CEO / Managing Directo: P.O Box 234, Jalan Pelabuhan YBhg Dato' Basheer Hassan 42009 Port Klang, Selangor 603-31698888 www.northport.com.my Syarikat Perkhidmatan Pelabuhan Gabungan Port Manager: Sdn Bhd (Pelabuhan Tanjung Bruas) Mr.Chua Yew Ling 06-3511766

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MALACCA PORT, Pelabohan Tanjung Bruas, Tanjung Kling, 76400 Malacca @Kuching Port Authority (Kuching Port) General Manager: Jalan Pelabuhan, P.O. Box 530, Mdm Liu Mui Fong 93710 Kuching, Sarawak 082-482144 @Miri Port Authority (Miri Port) General Manager: Jalan Miri Port, Kuala Baram Industrial Mr.Shebli Bin Hairai Estate, Kuala Baram, P.O. Box 1179 085-609009 98008 Miri, Sarawak @Rajang Port Authority (Sibu/Sarikei/ General Manager: Bintangor) Mr.Chong Siew Yang Sibu 084-319009 @Sabah Port Authority (Kota Kinabalu/ General Manager: Sandakan/Tawau/ Sepangar Bay/Dahat En Ramli Amir Datu/Kunak Kudat) 088-256155 Sabah Ports Authority Building, Jalan Tun Fuad, Tanjong Lipat, 88617 Kota Kinabalu @ Note: These Authorities are also operating the ports. Source: myTRADEINK; http://www.mytradelink.gov.my/port-operators

Table 4.8: Port Authorities No. Authority (port) & address CEO & contact Bintulu Port Authorities (Bintulu Port) Managing Director: Lot 15, Block 20, Kemena Land District, En Mior Ahmad Baiti Mior Lub 12th Mile, Tanjung Kidurong Road Ahmad P.O. Box 996, 97008 Bintulu Sarawak. (086) 251001/20 http://www.bpsb.com.my Johor Port Authority (Johor Port Tanjung Pelepas) 07-2517721 No 6A, 1-8A1, Jalan Bandar Puat Perdagangan 81700 Pasir Gudang, Johor Kemaman Port Authority (Kemaman Port) Bangunan Dermaga Timur, 609-8631590, 09-8631707 Telok Kalong, P.O.Box 66, 24000 Kemaman, Terengganu. Kuantan Port Authority (Kuantan Port) Executive Vice Chairman: Wisma KPC, Km 25, Tanjung Gelang, Dato' Shamsudin Md Dubi P.O.Box 199, 09-5833205 25720 Kuantan, Pahang. http://www.kuantanport.com.my/ Kuching Port Authority (Kuching Port) General Manager: Jalan Pelabuhan, P.O. Box 530, Mdm Liu Mui Fong 93710 Kuching, Sarawak 082-482144 Marine Department (Dermaga Tanjung Lembung) 604-9666134 Pejabat Pelabuhan Tanjung Lembung [email protected] 07000 Langkawi Miri Port Authority (Miri Port) General Manager: Jalan Miri Port, Kuala Baram Industrial Mr.Shebli Bin Hairai Estate, Kuala Baram 085-609009 P.O. Box 1179 98008 Miri, Sarawak

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Penang Port Commission (Penang Port) Managing Director: PENANG PORT SDN BHD YBhg Dato' Ahmad Ibnihajar No.1. King Edward Place, 04-210 2211 Georgetown, 10300 Penang [email protected] http://www.penangport.com.my Port Klang Authority (Port Klang) Mail Bag Service 202, 03-31688211 Jalan Pelabuhan, http://www.pka.gov.my 42005 Port Klang Rajang Port Authority (Sibu/Sarikei/ General Manager: Bintangor) Mr.Chong Siew Yang Sibu 084-319009 Sabah Port Authority (Kota Kinabalu/ General Manager: Sandakan/Tawau/Sepangar Bay/Dahad En Ramli Amir Datu/Kunak Kudat) 088-256155 Sabah Ports Authority Building, Jalan Tun Fuad, Tanjong Lipat, 88617 Kota Kinabalu Source: myTRADELINK: http://www.mytradelink.gov.my/port-authorities

Table 4.9: Permit Issuing Agency (as of 31 August 2014) No. Ministries Agencies/Sections 1 Ministry Of Home Affairs  Film Censorship and Enforcement Division  Royal Malaysian Police 2 Ministry of Works  Construction Industry Development Board 3 Ministry of Health  Pharmaceutical Services Division 4 Ministry of International  Import and Export Control Section Trade and Industry  Trade Cooperation and Industry Coordination Section  Strategic Trade Secretariat 5 Ministry of Agriculture and  Paddy and Rice Industry Division Agro-based Industry  Malaysian Quarantine and Inspection Services (MAQIS)  Department of Veterinary Services  Agriculture Department (Pesticides Control Division)  Agriculture Department (Crop Protection and Plant Quarantine Division)  Federal Agricultural Marketing Authority (FAMA) 6 Ministry of Plantation  National Kenaf and Tobacco Board Industries and  Malaysian Cocoa Board Commodities 7 Ministry of Science,  Atomic Energy Licensing Board Technology and  SIRIM QAS International Sdn Bhd (Civil and Innovations Construction Section)  SIRIM QAS International Sdn Bhd (Communication and Multimedia Certification Section) 8 Ministry of Natural  Department of Environment Resources and  Department of Wildlife and National Parks Environment

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9 Ministry of Energy, Green  Energy Commission Technology and Water 10 Ministry of Information,  Malaysian Communications and Multimedia Communication and Commission (MCMC) Culture 11 Ministry of Resource  Sarawak Timber Industry Development Planning and Corporation Environment  Forest Department Sarawak 12 Ministry of Modernisation  Department of Agriculture Sarawak (Veterinary of Agriculture Division) Source: myTRADELINK: http://www.mytradelink.gov.my/permit-issuing-agency

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