KUCHING: Harbour-Link Group Bhd foresees ocean freight and shipping charges in container shipping in Intra-Asia routes to weaken slightly going forward.
This is because of anticipated lower cargo volume and increase of shipping space from its competitors, according to company chairman and group managing director Datuk Yong Piaw Soon.
“While China’s reopening remains supportive of the global economy but the slower thanexpected pace of recovery in recent months will weigh on the global growth,” he said in the company’s 2023 annual report.
However, Yong said domestic shipping between Sarawak, Sabah and Peninsular Malaysia are more stable with consistent cargo volume and favourable freight rates due to foreseen growth for the domestic market which is supported by domestic demand, underpinned by favourable labour market conditions, particularly in the domestic-oriented sectors.
“There are opportunities for even better domestic-oriented growth in Malaysia, such as in the service sectors. Tourists arrival is expected to continue improving in Q2 of 2023 thus could give a boost to our economy,” he added. Harbour-Link is a significant player in the region’s shipping and marine industry, operating a fleet of 13 container vessels with a total capacity of 6,150 twenty-foot equivalent units (TEUs).
The company considers this fleet size to be an ideal match for the existing demand in its niche market, ensuring high utilisation rates. The firm’s diverse operations include ship agency services, where it handles various types of ships in multiple ports within Malaysia, Singapore, Hong Kong, China, and more.
These services encompass inward and outward ship clearance, ship handling, husbandry services, stevedore operations, and provision of food supplies and materials. Year-on-year, group’s pretax profit fell to RM195 million from RM200.3 million in FY2022.
The shipping & marine services segment saw its pre-tax profit dropped by 18 per cent to RM138.9 million (RM169 million).
Yong attributed the decreased earnings to stiff competition from major container liner operators, who have deployed additional tonnages into the region that resulted in the downward pressure on freight rates.
While Harbour-Link’s shipping and marine services segment faced challenges with a reduction in pre-tax profit due to competition from major container liner operators, the company’s other segments posted improved earnings.
The integrated logistics segment, investment holding segment, engineering works segment, and property development segment all contributed positively to the company’s performance.
To capture opportunities, Harbour-Link is actively involved in the sea transportation of timber products, primarily sawn timber and round logs, within the Asean region. They utilise four sets of tugboats and barges for these operations.
Additionally, the company provides haulage services with a fleet of container trailers, prime movers, cargo lorries, and dump trucks for the carriage of containerized cargo, minerals, and ores within Sarawak, Sabah, and Labuan.
In terms of property development, Harbour-Link retains approximately 72.85 acres of industrial land in Tanjung Kidurong, Bintulu, where it plans to construct 29 semi-detached industrial buildings.
While the company temporarily put the Kidurong Gateway development on hold due to market conditions, they are actively planning for future developments in response to demand for industrial buildings. Looking ahead, the company is adopting a concept of strategic alliances to reduce costs and overcapacity in the shipping and marine business.
They are closely monitoring global economic developments and local demand to remain flexible and innovative in their operations and marketing strategies. Additionally, HarbourLink has intentions to acquire additional vessels and equipment when favourable prices are available.
