Cabotage Partial

Liberalisation Policy
Research

cabotage
What is cabotage?
The word comes from French - caboter
which means to sail along a coast.
Generally refers to the transport of
passengers and goods.
Involving the transport between two points in
the same country and it is a trade or
navigation in coastal waters or the exclusive
right of a country to operate the air traffic
within its territory.

Cabotage Policy (Malaysia)

The policy which reserves the domestic trade to

its own flagged vessels known as Cabotage

Policy.
Cabotage policy or laws used to protect and to
promote a strong national shipping industry.
Malaysian government implemented a policy
which reserves the transportation of goods in
the domestic trades to ship flying the Malaysian
flag.

 This policy implemented on 1st January

1980 with amendment of the Merchant
Shipping Act 1952 Gov. appointed
Domestic Shipping Licensing Board (DSLB)
to regulate & control domestic shipping
between port in Malaysia.
This policy necessary because only a small
number of Malaysian registered ships were
plying the coastal routes.

Shipping route between port before partial

cabotage liberalisation

Shipping route between port after partial

cabotage liberalisation
03 June 2009
Government opened up to foreign ship owners the carriage of transhipment containers
from Port Klang & Tg.Pelepas to ports in Kuching,Bintulu and KK.
-Partial liberalisation allowed foreign vessels to carry containerised transhipment cargo directly
to Sabah & Sarawak witout need for a domestic shipping license

Recent Issues About Cabotage

The Borneo Post/Use Muara port to circumvent cabotage policy/
March 7, 2011.

United Borneo Front (UBF) co-founder,

Zainal Ajamain : Business in Sabah can avoid the extra shipping
costs caused by the cabotage policy by taking advantage of the
loophole in the system and ship their goods into the state using
Muara Port Brunei.

The Borneo Post/ Impact analysis on liberalisation from cabotage

proposed/ Oct. 26, 2011.

- Industrial Development Minister,

Datuk Raymond Tan An impact analysis on the partial
liberalisation of the cabotage policy affecting operational costs in
Sabah & Swk needs to be carried out.

We need to know ports like Kuching, Bintulu & KK were

liberalised from cabotage policy, what impact it has, how much it
affects the cost of operation within these areas before we can say
that the high cost of goods is because of cabotage

 Deputy International Trade & Ind. Ministry Datuk Jacob D. Sagan

Fed. gov. realises that what the industries in Sabah want is for
international carriers & shipping lines to be allowed to bring
imported goods direct to the state, however, he pointed out that
international carriers & shipping lines are reluctant to come to this
state because of the cost they will incur.

Daily Express / No decision yet to abolish cabotage policy / Nov.

23, 2011. Industrial Development Assistant Minister Datuk Michael
Asang There is no latest development to the proposal to abolish
the cabotage policy. Government is awaiting an assesment report
on the impact of its liberalisation by Maritime Institute of Malaysia.

My ministry has given its answer then and untill today, the
situation remains the same as there is no latest development on
the issue raised.

 Terminal Handling Charge (THC) meeting / Nov.30,2011

The meeting decided to accept the proposed reduction
on the THC to RM70 per container including the
transportation and depot handling cost. The meeting
requested Mr.Lo Shu Kiong to bring this proposed rate to
MASA for further consideration.

Conclusion
This cabotage policy is precisely made to protect

the local shipping industry in Malaysia. But, in

this globalisation era, this policy seen no longer
relevant. Shipping industry need to make a
reformation by offering a healthy competition
between local and international shipping so as to
developed other industries part in Malaysia
especially in Sabah and Sarawak. Therefore, a
comprehensive, thorough and fair study and
discussion should be done for the common
good.