The transport sector is an important component of the economy impacting on development and the welfare of Malaysian populations.
A good and efficient transportation system is a prerequisite for the economic development of Malaysia, which has a very open and highly dependent economy and generates very large volume of trade – totalling more than 391 million tonnes (2009) – to be transported to global markets, as well as within different regions of the country. The Transport Ministry is even optimistic that the transport sector can contribute further towards Malaysia’s economic growth in the third quarter this year based on encouraging developments so far.
The shipping industry plays an essential role in the maritime economy because most of Malaysian exports are manufactured goods. The aspiration to become a global exporter with the advantage of economies of scale requires that Malaysia develops ports and shipping service that ensure fast turnaround for ships, minimum waiting time and higher productivity. The Malaysia-Singapore region is served by almost every major shipping line connecting pivotal is to more than 300 ports worldwide. This region therefore has the potential to share in the benefit of high trade both on an intra regional and interregional basis. Relieves other means of transport
It is maritime transport that relieves other means of transport like rail, road and air and their infrastructure of avoidable pressure and congestion that they would otherwise have been under had there not been maritime transport carrying heavy cargo at less expensive cost. This helps to ensure that those modes of transport and their infrastructure are not over stretched.
Development of related economic activities
Maritime transport has caused the springing up of new developments and growth of economic activities to service the maritime industry by way of multiplier effects.
The maritime transportation sector in Malaysia has grown due to the rapid development of the tourism and trade industries. These industries fuel the need for maritime activities such as shipping, sea freight and port operation. This has in turn created ample business opportunities for entrepreneurs and investors interested in this sector. Furthermore, maritime industry opens door for other mode of transportation to take advantage and broaden their business.
Industrial growth and development
Manufacturer prefer to build factories, industries and warehouses near seaports in order to reduce transportation costs especially in the case of those industries that depend heavily on imported raw materials and equipment in order to manufacture finished goods for the domestic and foreign markets. This reduction in transport costs also reduce the costs of their finished goods which in turn increases the sales of their products, leads to high annual turnovers and enhances their growth.
This phenomenon affects majorly other mode of transport’s industry. Demand for the service of other mode of transport slowly decrease and this is bad for the future.
Creation of employment and job opportunities
Our ports act as gateway for the economy and facilitate much of the nation’s trade, 95% of which is carried by seaborne transport. Together, ports and the shipping sector generate tremendous multiplier effects and create employment opportunities for many.
Employment is an important indicator of economic growth and social well-being. In 2000, more than thousands of people all over Malaysia were employed in for-hire transportation, vehicle manufacturing, and related industries, such as automobile sales and repair. These jobs accounted for about 7.5 percent of total civilian employment. The most recent data show that the automotive dealers and service station industry was the largest employer among transportation-related industries, followed by transportation equipment manufacturing, trucking and warehousing, air transportation, and auto repair and parking services