Shipping better than using rail, say analysts

As such, they say cancelling East Coast Rail Line is unlikely to have much effect.

More shipping companies, especially those involving container lines that control more than 60% of the global market, are currently shifting towards using bigger container ships. (Bernama pic)

KUALA LUMPUR: No impact is expected on ports and last-mile delivery players if the East Coast Rail Line (ECRL) is cancelled or delayed, according to analysts.

Malaysian Industrial Development Finance Bhd (MIDF) research analyst Adam Mohamed Rahim said even though the ECRL claimed to take a shorter time to transport, rather than solely using ships passing through the Straits of Malacca, the cargo volume using a ship was way higher than by rail.

“For example, ships from China unload cargo at Kuantan Port and then may use trucks to transport to trains.

“The railway then carries the cargo to Port Klang. When unloaded, it will still need trucks to transport the cargo from rail to port.

“This process will incur higher charges for the companies than by using ships,” he told Bernama.

In short, he said, it would be better to just use direct shipping rather than going through the trouble of unloading and loading cargo onto trucks and trains.

Recently, the new government said the decision to defer or terminate the RM55 billion ECRL project would be announced after reviewing the project.

Prime Minister Dr Mahathir Mohamad said the government would study the project and negotiate to ensure not much money would be spent on the ECRL “because we cannot afford it”.

The 688km rail link, if built, will connect Port Klang in Selangor and Pengkalan Kubor in Kelantan and will be constructed in two phases.

Based on the previous government’s (Barisan Nasional) estimation, the ratio of passengers to freight is expected to be 30:70.

By 2030, it is projected that 53 million tonnes of cargo was expected to use the ECRL service annually as the primary transport between the east and west coast of Peninsular Malaysia, and vice-versa.

However, the freight cargo projection of the rail network is in contrast with the total cargo volume running through the entire Malaysian railways, as in 2015, only 6.21 million tonnes of cargo were carried by rail.

Another analyst, who wished to remain anonymous, said more shipping companies, especially those involving container lines that control more than 60% of the global market, are currently shifting towards using bigger container ships.

Consequently, rail lines do not seem to be a convenient mode of transport to carry such larger cargo due to space constraints, he said.

He said the big container lines were also moving towards using the biggest ships with capacities of 18,000 TEUs (twenty-foot equivalent units) against the current 10,000 TEUs.

“Using such bigger ships allow the companies to move more cargo in a single journey compared with using rail or other transportation.”

The ECRL is the only mega project that has not been cancelled and will be further studied by the government.

Previously, two major transport mega projects, namely the Kuala Lumpur-Singapore High-Speed Rail and Mass Rapid Transit Line 3 projects were officially scrapped by the government to control national spending and debts, at least for now. -FMT