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

" 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

Developing highly technical maritime skills

" 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

Digital ambitions to drive growth
Continue to read the feature’s InvestKL CEO Column here.

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