Shipping Industry To See Greater Consolidation To Reduce Costs, Optimise Assets

By Harizah Hanim Mohamed KUALA LUMPUR, Nov 3 (Bernama) -- The domestic shipping industry is expected to see greater consolidation among companies amid slower economic growth, and as a step towards optimising assets as well as reducing operating costs. Chartered Institute of Logistics and Transport Council Member Abi Sofian Abdul Hamid said it was a matter of connectivity within ports and how a port can specifically serve certain markets or cater to certain areas. "It is all about being productive and lowering costs as well as creating synergy within the network. "We can reduce wastage through consolidation in the industry," he told Bernama on the sidelines of the Urban Public Transportation Summit 2016 here on Thursday. He also reiterated that the same situation applied to domestic shipping liners, which will move in tandem with the global trend. Following the slowing down of economic activities, most global shipping firms, including Japan's shipping lines, are actively talking to each other regarding merger activities. "All Japanese shippers are talking about merging their container units and sharing information to optimise their assets," Abi Sofian said, adding, companies that have extra baggage and unnecessary assets would result in them being uncompetitive. Last month, three Japanese shipping firms, Kawasaki Kisen, Mitsui O.S.K Lines and Nippon Yisen agreed to set up a joint-venture and merge their container businesses as a measure towards dealing with the struggling container shipping industry. --BERNAMA