Current global volatility presents a clear opportunity for the country to transition from a transit point to a critical hub in international logistics, say experts
by AUFA MARDHIAH
MALAYSIA’S ports are emerging as strong contenders for regional leadership amid unprecedented disruption to global trade flows — from geopolitical tensions and tariff uncertainties to supply chain reconfigurations and climate-related challenges.
Strategically located along the Straits of Malacca and supported by continuous infrastructure upgrades, ports like Port Klang and the Port of Tanjung Pelepas (PTP) are increasingly seen as resilient and efficient alternatives to regional peers.
Experts say the current global volatility presents a clear opportunity for Malaysia to transition from a transit point to a critical hub in international logistics.
Mobility and logistics analyst Wan Agyl Wan Hassan said Malaysia is well-positioned to benefit from regional trade shifts.
“Malaysia’s ports are located in one of the most strategic locations in the world. As global shipping lanes face growing disruptions, Malaysia becomes a natural alter- native for companies seeking stability and resilience,” he told The Malaysian Reserve (TMR).
As global shipping faces more disruptions, Malaysia is a natural choice for companies looking for stability, says Wan Agyl (Pic courtesy of Wan Agyl Wan Hassan)
Legacy Routes, Future Potential
Wan Agyl said Malaysia’s strengths go beyond its strategic location, highlighting that ports like Port Klang and PTP have evolved into highly capable transhipment hubs. Port Klang is ranked among the world’s top 10 busiest ports, while PTP is internationally recognised for its operational efficiency.
He added that Malaysia’s maritime legacy, shaped by centuries of East-West trade, offers a strong historical foundation for future growth.
“This is not new territory for us—it is in our DNA. What we are seeing now is an opportunity to shift from being a transit point to a critical node in global supply chains. In an uncertain world, Malaysia offers something rare: Reliability,” he said.
To stay competitive in the region,
Rosli says Malaysia needs to upgrade its cargo systems by fully adopting digital and AI techs
Capacity, Competitiveness
According to transport economist Dr Rosli Azad Khan, Malaysia’s ports are generally well-equipped to handle increased cargo and higher volumes.
PTP, which serves major global shipping lines including Maersk AS, Sealand, CMA CGM, MSC and Evergreen Marine Corp (Taiwan) Ltd — remains a high-capacity terminal.
Northport, by contrast, operates as a multi-user port open to a broader range of carriers, which strengthens its role as a flexible trade hub.
Sepanggar Bay terminal in Sabah is also a multi-user facility, although it currently caters to smaller vessels.
Meanwhile, Wan Agyl added that a blend of strategic investment, advanced technology and supportive policy has boosted Malaysia’s competitiveness.
“We have invested in automated cranes, artificial intelligence (AI)-based cargo management, blockchain pilots and remote container verification systems.
“This means faster turnaround, fewer delays and better accountability for shippers,” he said.
This comes as Port Klang expands its capacity to 28 million twenty-foot equivalent units (TEUs), while PTP maintains its position as one of the world’s most efficient ports, with the capability to handle 12.5 million TEUs.
He also pointed out that government plans and port strategies are well-aligned, citing the 12th Malaysia Plan (12MP) and the National Transport Policy as examples of strong policy support.
Wan Agyl believes that Malaysia now offers more than just low port fees, providing a high-value, integrated logistics ecosystem that prioritises efficiency, sustainability and future-readiness.
Attracting Global Attention
With global manufacturers seeking to diversify supply chains amid rising geopolitical risks, Malaysia is becoming more attractive as a logistics hub, signalled by Nestlé (M) Bhd’s RM250 million investment last year into a world-class, zero-carbon logistics facility in Port Klang.
Wan Agyl said the facility will serve over 60 countries and integrate solar energy, electric trucks and automation.
“It is not just logistics; it is next-gen, green and global,” he said.
Malaysia’s approved investment totalling US$70 billion (RM329.5 billion) last year, with a significant portion directed towards logistics, manufacturing and digital supply chain solutions.
Government initiatives such as the Smart Logistics Complex (SLC) and full foreign equity permissions under the International Integrated Logistics Services (IILS) scheme are also helping to attract global players.
“We have the infrastructure, the policies, and now, the sustainability edge to match,” he added.
Logistics Infrastructure Taking Shape
According to both experts, Malaysia’s key strength lies in the integration of its multimodal logistics network.
Wan Agyl said the country’s greatest strength is how everything is integrated — sea, rail, road, air and digital infrastructure – into one cohesive logistics ecosystem.
He highlighted the ongoing projects such as the East Coast Rail Link (ECRL), the Perlis Inland Port (PIP) and expansions at Kuala Lumpur International Airport’s (KLIA) cargo terminals as efforts that will bridge east-west and north-bound trade flows across the peninsula and into mainland Asia.
“Of course, we still have things to improve, but we have the important fundamentals in place,” he added.
Rosli also highlighted the rapid rise in logistics activity in Malaysia over the past few years and projected further growth.
He noted that containerised trade — which involves the shipment of goods in standardised containers — is the fastest-grow- ing segment of global trade. This trend presents significant opportunities for Malaysia’s ports to expand their role, particularly with upcoming projects like the proposed Port Dickson facility, which could strengthen the country’s position as a key logistics hub.
Northport operates as a multi-user port open to a broader range of carriers, which strengthens its role as a flexible trade hub
Cautious Optimism Amid Persistent Gaps
Despite their optimism, both experts acknowledged that there are areas that must be addressed for Malaysia to fully capitalise on the momentum.
Wan Agyl warned that while Malaysia’s major ports have seen notable infrastructure upgrades, the broader logistics ecosystem remains hindered by fragmented processes and weak intermodal integration.
“We are still relying heavily on trucks. Rail moves just 2% to 3% of port cargo. Inland depots are underused or disconnected,” he said, describing the “10km-100km stretch between the port and the final customer” as the real choke point.
In addition, he added that customs, despite undergoing reforms, still lacks full interoperability.
“Until everything — permits, clearance, freight booking — is fully digitised and connected, speed will always be hit or miss,” he said.
Wan Agyl believes that while technologies like Single Digital Import and Export System (SDSIE) and AI-based scanning have been introduced at Port Klang, Malaysia must go further by linking freight data across agencies and operators.
He also cited the need for better cybersecurity and greater digital resilience.
Rosli pointed out that persistent issues such as the limited adoption of automation in smaller and regional terminals are hindering efficiency improvements within the entire logistics network.
“We need automated cargo handling and end-to-end cargo tracking implemented widely.”
While digital cargo clearance is available at some ports, it should be expanded across the entire network, Rosli added.
To remain competitive with regional peers, he said Malaysia must modernise its cargo handling and operating systems by fully embracing digital and AI-based technologies.
The two experts agreed that while Malaysia has strong fundamentals and growing investor confidence, logistics transformation must extend beyond headline projects and major terminals.
What Needs to Happen Next
Both Wan Agyl and Rosli concurred that to sustain momentum, Malaysia must now double down on modernisation and digital integration.
Wan Agyl noted that while Malaysia has made good progress with automation at major ports, it needs to go further by connecting data across customs, freight operators, ports and warehouses.
He said real-time cargo visibility, AI-based planning and system interoperability should become the norm, not the exception.
He also stressed the importance of green transformation, noting that Malaysia has a real opportunity to lead in green logistics.
“We are not just aiming to consume green fuels — we are looking to produce them,” he added.
Furthermore, Malaysia’s green bunkering initiative, combined with private sector efforts such as Nestlé’s carbon-neutral logistics hub, demonstrates the country’s potential to lead in sustainable logistics practices.
Still, Wan Agyl cautioned that some challenges persist and must be addressed urgently.
“We also need to address gaps like skilled talent shortages and fragmented coordination among logistics players,” he added.
Rosli echoed the need for continued investment in digitalisation and technology, particularly in cargo handling and operating systems.
He urged the government to act as a catalyst by providing public funding to attract greater private investment in these areas.
Malaysia’s Time to Lead
Malaysia’s recent 15-spot jump to 26th place in the World Bank’s Logistics Performance Index 2023 affirms the country’s progress. But both experts stressed that long-term success will depend on greater coordination and sustained investment.
“The window of opportunity is wide open, but we will only seize it if we digitise deeper, decarbonise faster and integrate smarter across every layer of the logistics ecosystem,” Wan Agyl said.
“If we modernise with purpose and stay ahead on technology, there is no reason Malaysia cannot take the lead in regional logistics,” Rosli added.
- This article first appeared in The Malaysian Reserve weekly print edition
The post Malaysia’s ports stand to gain as global trade routes shift appeared first on The Malaysian Reserve.
