LOGISTICS AND TRADE FACILITATION

MASTERPLAN

PERFORMANCE REPORT 2016

 CONTENTS

FOREWORD ................................................................................................. ii
EXECUTIVE SUMMARY ............................................................................. iv
1.0 OVERVIEW OF THE MASTERPLAN .................................................... 1
2.0 PHASE 1: 2015 – 2016 (DEBOTTLENECKING) ................................... 3
2.1 MOT as the Champion for Logistics ................................................. 4
2.2 Creating National Logistics Task Force (NLTF) ............................... 5
2.3 Improving Last-Mile Connectivity to Port Klang ................................ 6
2.4 Addressing Padang Besar Container Terminal Bottlenecks ............ 7
2.5 Enhancing Efficiency of Import / Export Processes .......................... 7
2.6 Regulating Warehouse and Off-Dock Depots Development ............ 8
2.7 Enhancing Road Freight Transport Productivity ............................... 8
2.8 Streamlining Licensing and Air Freight Processes and Procedures 9
2.9 Establishing National Freight Data Programme ............................. 11
2.10 Increasing Quality of Goods Vehicle Drivers ................................ 11
2.11 Reviewing Malaysian Ship Registry Structure .............................. 12
3.0 PHASE 2: 2017-2019 (ENHANCING DOMESTIC GROWTH) ............ 13
3.1 Creating Integrated Hub and Spoke Model .................................... 13
3.2 Enhancing Capabilities of Logistics Service Providers ................... 15
3.3 Increasing Compliance with Trade Partner Market Regulations .... 17
4.0 PHASE 3: 2020 & BEYOND (CREATING REGIONAL FOOTPRINT) 18
4.1 Leveraging the Potential of e-Commerce Logistics ........................ 18
4.2 Providing Green Initiatives Support ................................................ 19
4.3 Promoting Efficient Urban Logistics ................................................ 21
4.4 Convergence of Global Supply Chain ............................................ 22
5.0 WAY FORWARD .................................................................................. 23

i
 FOREWORD
MINISTER OF TRANSPORT

The logistics industry is the backbone of the Malaysian

economy. It supports all sectors of the economy,
facilitates trade and reduces cost of doing business,
besides improving productivity and efficiency of the
economy.

The Ministry of Transport (MOT) through the National

Logistics Task Force (NLTF) and relevant ministries,
departments, and agencies have been focusing on
strengthening the logistics sector given its critical role in
supporting National Transformation Agenda towards a
fully developed and high-income nation by 2020.

As Chairman of the NLTF, I am heartened to note that the implementation of the

Logistics and Trade Facilitation Masterplan recorded an impressive 85%
performance in Phase 1 – Debottlenecking (2015-2016). Subsequently, the
logistics industry, as a whole, has begun to witness reduced bottlenecks which
have contributed to higher efficiency and improved delivery.

During the year, efforts have also been undertaken to improve Malaysia‟s Logistics
Performance Index (LPI) ranking in collaboration with relevant ministries, agencies,
industries as well as the Global Knowledge and Research Hub of the World Bank
Office, Kuala Lumpur.

Moving forward, our aspiration is to be the ‘Preferred Logistics Gateway to Asia’

by 2020 and beyond. Towards this end, several ground-breaking initiatives have
been initiated by the Government as well as the private sector, among which
include the proposed development of the Carey Island Port-Industrial City Project,
East Coast Rail Link (ECRL), e-commerce logistics, 24-hour customs facilitation at
the borders, and Sabah as the regional logistics hub for East ASEAN Growth Area
(BIMP-EAGA).

Last but not least, I would like to thank and record my utmost appreciation to all the
ministries, agencies, departments, industry players and individuals who have
contributed directly or indirectly towards the achievements of the Masterplan.

DATO’ SRI LIOW TIONG LAI

March 2017
ii
 FOREWORD
SECRETARY GENERAL
MINISTRY OF TRANSPORT

The Ministry of Transport (MOT) is committed to

strengthening the competitiveness and efficiency of the
nation's logistics industry.

In this regard, MOT has established the National Logistics

Task Force (NLTF) comprising inter-agency and private
sector representatives to drive and monitor the
implementation of the Masterplan.

Four Cluster Working Groups (CWGs) consisting of

institutional mechanisms and regulations, trade facilitation,
infrastructure and freight demand, and human capital development, have been
formed to deliver the 21 Action Items of the Masterplan. Through these
collaborative efforts and teamwork, we have achieved a credible performance in
2016.

I would like to thank the members of the NLTF and CWGs, and all those who have
contributed to the successful implementation of Phase 1 of the Masterplan.

I am optimistic that we can effectively deliver the remaining Action Items with the
continued support and cooperation from all parties.

DATUK SERI HJ. SARIPUDDIN BIN HJ. KASIM

March 2017

iii
 EXECUTIVE SUMMARY

This report highlights the performance of the Logistics and Trade Facilitation
Masterplan in 2016. The implementation of the Masterplan during the year
focused on Phase 1: Debottlenecking.

Overall, in 2016, the Masterplan recorded a remarkable 85% performance.

Among the achievements were repositioning MOT as the champion for
logistics; formation of the National Logistics Task Force (NLTF); compilation of
national logistics database; streamlining licensing and air freight procedures;
enhancing road freight transport productivity; and improving quality of goods
vehicle drivers.

Two initiatives – amendments to the Merchant Shipping Ordinance (MSO)

1952 and drafting of the regulations on off-dock depots are in the final stages.
These initiatives will be implemented once the relevant authorities approve
them. During the year, efforts have also been undertaken to improve
Malaysia‟s Logistics Performance Index (LPI) ranking.

Following the implementation of comprehensive debottlenecking initiatives

over the year, the logistics sector has begun to feel the impact of reduced
bottlenecks - improved efficiency and delivery across the sector.

The successful completion of Phase 1: Debottlenecking has laid a strong

foundation for the implementation of Phase 2: Enhancing Domestic Growth
(2017-2019) and Phase 3: Creating Regional Footprint (2020 & beyond).

iv
1.0 OVERVIEW OF THE MASTERPLAN

The logistics industry is crucial to stimulate trade, facilitate business efficiency

and spur economic growth. Malaysia prospers due to its strategic location,
steady economic growth, good regional linkages, and strong transport
infrastructure. It has the right endowment to position itself as the regional
logistics gateway.

In this context, the Economic Planning Unit (EPU) has formulated the Logistics
and Trade Facilitation Masterplan (2015-2020) which provides the strategic
framework and roadmap to elevate Malaysia to be the “Preferred Logistics
Gateway to Asia” by 2020 and beyond. To achieve this vision, 5 Strategic
Shifts and 21 Action Items have been laid out (Figure 1).

Figure 1: Logistics and Trade Facilitation Masterplan Framework

1
With the successful implementation of the Masterplan, the contribution of the
transport and storage sub-sector to the Gross Domestic Product (GDP) is
targeted to increase from 3.6% in 2013 to 4.3% in 2020. Cargo volume is
projected to grow 8% annually to reach 880 million tonnes by 2020. In
addition, an estimated 146,000 new jobs, mostly in the high-skilled category,
will be created by 2020.

nd
In the Logistics Performance Index (LPI) 2016, Malaysia ranked 32 out of
th
160 countries compared with 25 ranking in 2014. The decline was attributed
to the drop in six components of the LPI (Table 1).

Table 1: Malaysia’s Logistics Performance Index, 2014-2016

Component Ranking
2014 2016
Customs and border clearance efficiency 27 40
Trade and transport infrastructure quality 26 33
Competitively priced international 10 32
shipments
Logistics quality and competence 32 35
Tracking and tracing consignments 23 36
Shipments timeliness 31 47

Low LPI is due to high logistics costs and unreliable supply chains which
reduce a nation‟s competitiveness. Additionally, supply chains are complex
and their performance is dependent on hard and soft infrastructure, institutions
and conducive ecosystems such as regulations, customs clearance, import
and export procedures (World Bank Report, 2016).

Therefore, the implementation of the Masterplan is timely to transform the

logistics and trade facilitation sectors, and improve Malaysia‟s LPI ranking to
the top 20 position by 2020 and beyond.
2
2.0 PHASE 1: 2015 – 2016 (DEBOTTLENECKING)

In 2016, the implementation of the Masterplan accomplished a remarkable 85%

under Phase 1: Debottlenecking. This phase is aimed at removing the root
causes that had held back the logistics industry. Table 2 shows the
performance of Phase 1 by Action Item.

Table 2: Phase 1 (Debottlenecking) Performance by Action Item, 2016

No Action Item Status
1 MOT as the Champion for Logistics Completed
2 Creating National Logistics Task Force Completed
3 Improving last-mile connectivity to Port Klang Ongoing
4 Addressing bottlenecks in Padang Besar Container Ongoing
Terminal
5 Enhancing efficiency of import/export processes Ongoing
6 Regulating and monitoring warehouse and off-docks depots Completed
development
7 Enhancing road freight transport productivity Completed
8 Streamlining licensing and air freight processes and Completed
procedures
9 Establishing national freight data programme Completed
10 Increasing quality of goods vehicle drivers Completed
11 Reviewing Malaysian Ship Registry Structure Completed

Two initiatives – amendments to the Merchant Shipping Ordinance (MSO)

1952 and drafting of the regulations on off-dock depots are in the final stages,
and will be implemented once the relevant authorities approve them.

Three Action Items are ongoing and have been carried forward to 2017.
These initiatives are improving last-mile connectivity to Port Klang; addressing
bottlenecks in Padang Besar Terminal; and developing uCustoms to provide a
fully integrated, end-to-end customs modernisation solution that delivers a
single window for goods clearance. Due to resource constraints, these
initiatives require more time to complete.

3
2.1 MOT as the Champion for Logistics

MOT is committed to supporting the growth of the nation's logistics industry

and strengthening Malaysia's position as the preferred logistics gateway in the
region. In order to perform this role effectively, MOT has been repositioned as
the champion of the logistics sector.

With the repositioning of MOT as the lead agency and focal point for logistics,
the planning and development of the logistics sector have become more
systematic and co-ordinated. MOT has been able to drive and coordinate
various policies and initiatives, in the logistics and trade facilitation sectors
more effectively through closer inter-agency as well as public-private
collaborations.

Strengthen Malaysia
as the 'Preferred
Logistics Gateway
to Asia'

Support the growth Lead agency and

of the nation's focal point for
logistics industry logistics

Drive and monitor

government initiatives
in the logistics and
related sectors

4
2.2 Creating National Logistics Task Force (NLTF)

MOT has established the NLTF, a dedicated outfit to drive and monitor the
implementation of the Masterplan in collaboration with various strategic
partners. These partners include ministries, departments and agencies,
logistics service providers & freight forwarding associations, and the Global
Knowledge and Research Hub of the World Bank Office, Kuala Lumpur.

The NLTF acts as the mechanism for driving and monitoring the Masterplan to
ensure its implementation in a timely and effective manner. Chaired by the
Minister of Transport, the NLTF is supported by four Cluster Working Groups
(CWGs) as shown in Figure 2.

National Logistics Task Force

(NLTF)

Secretariat

Cluster Head

CWG 1: CWG 2: CWG 3: CWG 4:

Institutional Trade Infrastructure & Human
Mechanism and Facilitation Freight Demand Capital
Regulation Development

Figure 2: Masterplan Implementation Structure

The CWGs comprise representatives of different stakeholders such as

government agencies, associations, NGOs, and academicians, and conduct
regular meetings to provide progress updates and address implementation
challenges. The NLTF provides regular updates on the implementation of the
Masterplan to the Economic Council, Export Council and Special Services
Sector Committee.

5
2.3 Improving Last-Mile Connectivity to Port Klang

Two out of the six initiatives under the Port Klang Last-Mile Connectivity Action
Item were completed. The remaining four initiatives – two road improvement
projects, one rail and one traffic information system were at various stages of
implementation. The overall implementation status of this Action Item is
depicted in Figure 3 and 4.

Figure 3: Port Klang Last-Mile Connectivity Roadmap

Figure 4: Completed Projects at Bandar Sultan Sulaiman

(Northport Gate 2)

6
2.4 Addressing Padang Besar Container Terminal Bottlenecks

The contract for upgrading Padang Besar Container Terminal was awarded in
December 2016. The project is expected to be completed in 2018 (Figure 5).

Figure 5: Architectural Impression of the Proposed Elevated Building

2.5 Enhancing Efficiency of Import / Export Processes

Government policies and regulations affect the movement of goods which has
an impact on business operations. This Action Item aims to improve goods
import and export processes, and to reduce time taken and cost. It involves
streamlining and simplifying regulatory requirements, documentary and border
compliance. Table 3 depicts the status of the import and export process
improvement.

Table 3: Import / Export Process Improvement

Initiative Status
Reduced Regulatory Burden For
Specific Industries
- Export-Oriented Food Industry 85%
- Export-Oriented HS85 (Electrical 100%
Machineries & Equipment)
Authorised Economic Operator 100%
Improved Cargo Clearance 100%
Enhanced Customs SOP: Movement 100%
of Goods in FTZ

7
2.6 Regulating Warehouse and Off-Dock Depots Development

Two initiatives under this Action Item were completed. MPC has finalised the
review of the Guidelines and Application Procedures for Warehouse Building.
This document serves as a guide for warehouse development.

The third initiative involved regulating off-dock depots by the Land Public
Transport Commission (SPAD) to provide quality service. Amendments to the
Land Public Transport Act 2010 (Act 715) has been completed and are
expected to be tabled in Parliament in 2017.

2.7 Enhancing Road Freight Transport Productivity

The axle-load limit and vehicle weight for container hauliers and conventional
trucks under the Malaysian Weight Restrictions (Federal Roads) (Amendment)
Order 2003 were reviewed by the Road Transport Department (RTD) and
Ministry of Works.

It is aimed at increasing road freight transport productivity of transport

operators and hauliers through approved higher axle loads (Table 4). The
amendment to the Malaysian Weight Restrictions (Federal Roads) will be
gazetted once it is approved by the relevant authorities.

8
 Table 4: Approved Higher Axle Loads, Peninsula Malaysia, 2016
Maximum Vehicle Weight
Vehicle Type 2003 2016 Scheme
(kg) (kg)
2 Axle – Rigid Vehicle 18,000 19,000
(1 + 1)
3 Axle – Rigid Vehicle 26,000 27,000
(1 + 2)
3 Axle – Articulated 30,000 31,000
Vehicle (1 + 1 + 1)
4 Axle – Articulated 37,000 39,000
Vehicle (1 + 1 + 2)

5 Axle – Articulated 40,000 45,000

Vehicle (1 + 2 + 2)

6 Axle – Articulated 44,000 50,000

Vehicle (1 + 2 + 3)

2.8 Streamlining Licensing and Air Freight Processes and Procedures

Four initiatives under this Action Item were completed. They involved the
reviewing and shortening of procedures as well as the time taken for
processing and issuing of landing permits for charter flights.

(a) Commercial Vehicles Licence (CVL)

The need of obtaining referral letters for parking facilities from local authorities,
taking two weeks to four months for approval of CVL, was abolished. This
initiative has reduced the time taken to approve CVL licence to less than one
month from one to five months previously, and the number of procedures from
eight to five. It has resulted in cost savings of RM61 million annually based on
a study conducted by Malaysia Productivity Corporation (MPC) in 2015.

9
(b) Single Inspection

The duplication of vehicle inspection by PUSPAKOM and RTD was removed

to a single inspection by PUSPAKOM.

(c) Dangerous Goods Permit for Air Freight Service

An integrated online application and permit approval system managed by the

Atomic Energy Licensing Board (AELB) and Department of Civil Aviation
Malaysia (DCA) was introduced. Prior to this, it took an average of five to ten
working days for radioactive cargo to be transported out via KLIA. With the
implementation of this online system, it takes only two to three working days to
obtain approval.

(d) Landing Permits for Charter Flights

The processes and procedures on landing permits applications for charter

flights by DCA and Malaysian Aviation Commission (MAVCOM) were
streamlined (Figure 6). This improvement has reduced the approval process
from seven to three days for landing permits effective June 2016. In addition,
the number of documents required for landing permit applications for charter
flights has been reduced from ten to three.

Benefits
1. Accelerate growth of
charter flight sector
2. Increase flexibility of
charter flight service
provider
3. Reduce administrative
burden and lowers cost

Figure 6: Landing Permits Application for Charter Flights

10
2.9 Establishing National Freight Data Programme

This programme is aimed at facilitating the compilation of a national freight

database to provide seamless and timely access to accurate data, and
enhance logistics planning at the national level. Information on national freight
has been made available on a quarterly basis (Figure 7).

Provide seamless and timely Enhance logistics planning at

access national level

Facilitate compilation of Provide accurate data

National Freight Database

Figure 7: National Freight Database

2.10 Increasing Quality of Goods Vehicle Drivers

The Road Transport Department (RTD) in collaboration with driving institutes

and the Association of Malaysian Hauliers (AMH) launched a programme
known as the MyLesen Goods Driving Licence (GDL). This initiative is
aimed at producing 1,000 new GDL drivers in the Klang Valley.

Qualified Malaysians who meet the criteria can now undergo commercial
vehicles driving courses to obtain Class-E GDL licence through a discounted
fee costing RM1,665. This package is cheaper than the market price
ranging from RM1,800 to RM2,500.

The courses were conducted in ten selected driving institutes in the Klang
Valley. Qualified MyLesen GDL participants have been offered positions of

11
professional movers in AMH registered companies with a monthly income
ranging from RM3,000 to RM7,000.

Figure 8: MyLesen Goods Driving Licence (GDL)

2.11 Reviewing Malaysian Ship Registry Structure

There were several outstanding issues concerning the current Malaysian Ship
Registry (MSR) such as lengthy ship registration process and stringent
requirements. It was not attractive for global players who merely sought to „fly
a flag‟ (no trading purpose).

The review of the Malaysian ship registry structure is in the final stage. Its
objectives are to simplify the ship registration process and generate revenue
for the Government. The proposed MSR is expected to be completed in 2017.

12
3.0 PHASE 2: 2017-2019 (ENHANCING DOMESTIC GROWTH)

Two “low-hanging fruits” Action Items under Phase 2 were completed. The
first initiative was the enhancement of logistics service providers‟ capabilities
to raise standards and productivity.

Improving compliance levels with trading partners‟ markets regulations to

strengthen their confidence on local producers was the second Action Item
completed. The other Action Item, creating a Hub and Spoke Model, is still
ongoing.

3.1 Creating Integrated Hub and Spoke Model

(a) KLIA as an Air Cargo Hub

The KLIA Aeropolis was launched on 23 May 2016 and is anticipated to

contribute RM30 billion to GDP over a 15-year period while creating 56,000
new jobs (Figure 9 & 10). The KLIA Aeropolis development is centred around
three key clusters – air cargo and logistics, aerospace and aviation parks as
well as meetings, incentives, conferences & events (MICE) and leisure.

The KLIA Aeropolis serves as the core of airports‟ air cargo and logistics
ecosystem. It also complements services offered in other regional airports.
Malaysia anticipates achieving the target of 2.5 million to 3.0 million tonnes of
air cargo volume by 2050 from the current 726,000 tonnes.

13
 Figure 9: KLIA Aeropolis

Figure 10: Launching of KLIA Aeropolis

(b) Port Klang as the Regional Maritime Centre

Malaysia‟s maritime sector is a key growth pillar for the nation‟s economic
growth. MOT has been focusing on developing the nation‟s maritime sector to
be globally competitive. The initiatives undertaken by MOT aim to position

14
Port Klang as the national focal point for international cargo movement,
harmonise cooperation between federal ports, improve port planning and
standardise port procedures, enhance ports connectivity, foster multi-modal
connectivity between air, sea and land modes.

Port Klang and Port of Tanjung Pelepas (PTP), the leading container ports in
the country, continued to rank among the world‟s top 20 container ports.
According to the Containerisation International Report, in terms of TEUs
th th
handled in 2015, Port Klang ranked 12 while PTP ranked 17 .

Moving forward, investment in ports infrastructure is required to attract mega

vessels, support efficient cargo handling at the ports and develop good
hinterland connectivity. This will enable Port Klang to achieve 16.4 million
TEUs by 2020.

In the long-term, the proposed development of Carey Island Port-Industrial

City Project with a capacity of 30 million TEUs will enhance efforts to develop
a regional maritime centre (Figure 11).

Figure 11: Proposed Carey Island Port-Industrial City Project

3.2 Enhancing Capabilities of Logistics Service Providers

Local Public Universities (IPTA) and Private Universities (IPTS), Community

Colleges and Polytechnics offer various types of courses and programmes in
logistics from certificate to Ph.D. levels. In 2015, there were 4,592 registered
students, 9,173 enrolled students (studying) and 2,470 graduates in various
logistics courses.

15
In addition, the Human Resource Development Fund (HRDF) under the
Ministry of Human Resources (MOHR) had provided financial assistance
through various schemes to train and develop workers in the logistics sector.
In 2015, the HRDF approved 11,745 training places for the logistics sector
(Table 5).

Table 5: HRDF Training and Financial Assistance, 2014-2015

2014 2015
Training Financial Training Financial
Category Place Assistance Place Assistance
(RM Mil) (RM Mil)
Logistics 4,787 4.8 5,541 5.1
Aviation 1,861 3.0 2,674 14.0
Maritime 951 0.9 2,300 4.1
Port Management 3,838 17.3 1,230 1.1

Total 11,437 26.0 11,745 24.3

(Source: HRDF Annual Report, 2015)

The Masterplan will continue to enhance the capabilities of logistics service

providers through up-skilling and re-skilling of human resource through the
HRDF, TalentCorp and other training programmes offered by logistics
institutes and freight associations.

For instance, the Federation of Malaysian Freight Forwarders (FMFF) offers

the FIATA Diploma in Freight Forwarding while the Selangor Freight
Forwarders and Logistics Association (SFFLA) conduct the United Nations
Economic and Social Commission for Asia and the Pacific (UNESCAP)
Certification for Multimodal Transport Operator (MTO). Both courses are only
open to their respective members.

Furthermore, the Association of Malaysian Hauliers (AMH) offers various

training programmes for its members through strategic collaborations with the
Asian Institute of Logistics (ASIL). These programmes are accredited by the
International Professional Managers Association (IPMA) and Institute of
Supply Chain Management (IoSCM).

16
3.3 Increasing Compliance with Trade Partner Market Regulations

The Royal Malaysian Customs Department (RMCD) signed a Mutual

Recognition Agreement (MRA) with its Hong Kong counterpart in 2016. This is
the second MRA signed by Malaysia after the first MRA with Japan.

Under the World Customs Organisation's (WCO) SAFE Framework 2011,

customs administrations are encouraged to develop partnerships with
businesses to facilitate trade based on the Guidelines for Developing Mutual
Recognition Agreements.

Mutual Recognition (MR) is a broad concept embodied within the WCO SAFE
Framework. It stipulates that an action or decision taken or an authorisation
granted by one customs administration is recognised and accepted by its
counterpart.

Under the MR of Authorised Economic Operator (AEO), one customs

administration recognises the validation findings and AEO authorisations of
another customs administration. Where applicable, it provides reciprocal
benefits or facilitations to mutually recognised AEOs.

The MR of AEO Programmes provides benefits at Customs-to-Customs as

well as the Customs-to-Trade levels. By enhancing Customs-to-Customs co-
operation and recognising each other's AEO, MR allows the Customs to target
high-risk shipments and to expedite low-risk shipments.

17
4.0 PHASE 3: 2020 & BEYOND (CREATING REGIONAL FOOTPRINT)

In 2016, four “low-hanging fruits” Action Items under Phase 3 were

implemented, namely, leveraging the potential of e-commerce, promoting
efficient urban logistics, providing green initiative support for the logistics
industry through private sector initiatives and convergence of the global supply
chain.

4.1 Leveraging the Potential of e-Commerce Logistics

Malaysia has a huge potential in e-commerce logistics which is poised to grow

exponentially with the right impetus and stimulus. Various e-commerce
initiatives have been initiated such as the Digital Free Trade Zone, digital
entrepreneurship programme and other supporting initiatives. Currently,
Malaysia‟s contribution of e-commerce to GDP is low at 5.8%, compared with
21% in China and 35% in the USA.

Improved connectivity will strengthen the e-commerce industry and allow

consumers who make online purchases to receive their goods within a day.
One of the e-commerce initiatives completed is the Port Klang Net, a port
single window for the maritime and logistics communities connected under a
common platform. The implementation of this initiative is to improve the
competitiveness of the port and logistics industry through increased efficiency,
cost reduction and transparency in transactions across the supply chain.

Port Klang Net leverages cutting-edge technology to transform the way

information is exchanged across the logistics value chain (Figure 12). It
focuses on providing seamless connectivity, enhancing operational efficiency
and reducing cost of doing business.

It enables the operators in the logistics value chain to communicate and

collaborate with each other electronically through the sharing of real-time
information and is inter-operable among stakeholders to expedite business
processes. A similar initiative, the Johor Port Net, has been initiated by Johor
Port Authority recently.

18
  Improve competitiveness
of the port and logistics
industry
 Increase efficiency
 Reduce cost
 Seamless connectivity

Figure 12: Port Community System

4.2 Providing Green Initiatives Support

One of the key initiatives to drive the logistics industry is the introduction of
green logistics in the Masterplan. The green logistics initiative promotes the
utilisation of advanced technology and equipment. It aims to minimise
the ecological impact of logistics activities through a whole range of measures
to protect the environment and resources. The holistic approach adopted for
the green logistics initiative covers the entire supply chain in the logistics
industry.

The achievements of the Green Logistics Action Item are:

(a) Green Port Award System (GPAS)

Northport, Westports, and PTP were awarded GPAS (Green Port Award
System) in 2016. It is a programme on green evaluation of ports in the Asia-
Pacific Economic Cooperation (APEC) region, developed by APEC Port
Services Network (APSN). GPAS promotes green and sustainable
development in port and port-related industries. It provides a clear roadmap to
develop green port plans; build platforms for sharing of best practices; raise
profile of ports to promote overall competitiveness; and improve capacity for
sustainable development.

19
Port authorities or port operators with GPAS have achieved good progress to
become green ports in the last two years based on three primary indicators –
Commitment and Willingness; Action and Implementation; and Efficiency and
Effectiveness.

Figure 13: Green Port Award System Programme

(b) Sustainable Transport and Climate Change

MOT in cooperation with the D e uts c he

G es el ls c h af t f ür Internationale
Zusammenarbeit (GIZ) GmbH undertook
the project to document transport carbon
emission in Malaysia. The Malaysia
Stocktaking Report on Sustainable
Transport and Climate Change was
completed in November 2016 and served
as the baseline document for the future
development of sustainable transport
strategies.

The purpose of the report is to collect

information on existing policies, future trends, key strategies and plans,
barriers to implementation, and recommendations for future actions. The
findings of this report were disseminated to government agencies, universities
and non-government organisations on 7 November 2016.
20
4.3 Promoting Efficient Urban Logistics

With e-commerce as the fastest growing driver of urban deliveries, the last-
mile delivery of goods is important. Creative and practical solutions for
improving urban delivery of goods are the way forward.

Pos Malaysia Bhd has launched the 24/7 Pos Laju Prepaid Dropbox service,
currently available in Klang Valley. The service allows customers to drop off
their prepaid parcels at self-service automated machines. It also enables
customers to post prepaid parcels by dropping off their parcels from self-
service automated machines in a safe and convenient way. It will be
expanded nationwide by 2017.

BOXiT Holdings Sdn Bhd launched BOXiT locker service on 19 May 2016 to
enable customers to receive, collect and return their purchases for online
shoppers by installing 100 parcel lockers at selected 7-Eleven outlets
nationwide. Three hundred lockers will be installed in 2017 and 500 in 2018.
The service allows customers to collect their parcel deliveries 24 hours a day,
7 days a week at convenient and secure locations (Figure 14).

 Locker service
 24/7 Pos Laju Prepaid  Electronically managed and
Dropbox service monitored by a centralised
 Customers drop off their server via Internet
prepaid parcels  Customer receive, collect and
 Self-automated machines return purchases
 Safe and convenient  Customer collect parcels 24/7
at convenient and secure
locations

Figure 14: Urban Logistics

21
4.4 Convergence of Global Supply Chain

Malaysia and China have agreed to form a “port alliance” to fast-track trade by
reducing customs bottlenecks at both ends. This port alliance agreement
involves collaborations of 7 ports in Malaysia (Port Klang, Malacca, Penang,
PTP, Johor, Kuantan and Bintulu) and 11 ports in China (Dalian, Shanghai,
Ningbo, Qinzhou, Guangzhou, Fuzhou, Xiamen, Shenzhen, Hainan, Taicang
and Qindao). The port alliance primarily aims to accelerate the development
of shipping, logistics and related industries in both countries.

Figure 15: Signing of Port Alliance Agreement

22
5.0 WAY FORWARD

As indicated by the World Bank (2016) publication, Connect to Compete, the

logistics sector is increasingly recognised as one of the core pillars of
economic performance. Logistics is crucial to spur economic growth and
competitiveness of nations, particularly with the proliferation of mega-trade
agreements.
Digital platforms have become increasingly important to the logistics industry.
Furthermore, logistics service providers globally will be confronted with the
challenge of unprecedented change amid the advent of digitalisation, Internet
of Things (IoT), increasing customer expectations and rising competition
(PwC).
Re-shaping of the logistics industry will take place with emerging new
technologies enabling greater efficiency, more collaborative networking and
entry of new entrants including start-ups that exploit disruptive innovation
models and platforms.

With these new challenges, policy makers now realise the urgent need to
implement coherent national policies to foster seamless and sustainable
logistics and supply chain operations as engines of growth in their respective
economies (World Bank, 2016).

Going forward, for Phase 2 (Enhancing Domestic Growth) and Phase 3

(Creating Regional Footprint), the private sector initiatives are crucial for the
success in implementation of the Masterplan. As such, these initiatives will be
identified and galvanised to further advance the development of the logistics
industry in Malaysia. Public and private sectors' initiatives such as enhancing
port infrastructure, leveraging the potential of e-commerce logistics, promoting
efficient urban logistics and green logistics, accelerating supply chain
integration and innovation will expedite the transformation of the Malaysian
logistics sector.

In conclusion, it is pertinent that Malaysia continues to be competitive in the

global economy through “connect to compete” focusing on the following six
key strategies:

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Creating a well-defined and connected state-of-the-art model for transport infrastructure to
achieve greater connectivity and competitiveness

Building capacity to drive value-added outputs with enhanced logistics industry

productivity

Digitalising logistics industry and leveraging the Internet of Things (IoT) to improve
its productivity and reduce environmental impact

Accelerating convergence with global supply chains to connect Malaysian industries

with international markets

Fostering supply chain innovation to drive industry excellence, reliability and service
quality
Promoting "green logistics" to meet the increasing demand for an environment-friendly
logistics sector

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Kementerian Pengangkutan Malaysia
No. 26, Jalan Tun Hussein
Presint 4, 62100,
Wilayah Persekutuan Putrajaya
Tel: 03-8000 8000
Fax: 03-8888 0158
Website: www.mot.gov.my