Port costs are rising—but Malaysia’s trade strategy can’t stop at the docks

When the Port Klang Authority confirmed on June 13 that terminal handling charges (THC) would climb nearly 30% in phases starting July 15, the announcement landed with a familiar justification: infrastructure upkeep. The Ministry of Transport supports the move, citing the need to preserve service quality. But behind the formal rationale lies a tougher question—who bears the cost, and what kind of trade ecosystem are we shaping for the long run?

Logistics veteran Chandra Mohan Sinnandavar doesn’t just see a pricing revision. He sees a misalignment. Ports may be profitable and vital, but the arteries of Malaysia’s trade system run far beyond container terminals. Unless policy begins to reflect that wider network, the country could end up reinforcing the wrong parts of its logistics economy—while quietly weakening others.

Financial stress is not the story here. Westports clocked in a robust RM898 million in net profit last year, boasting a 38% margin. Meanwhile, MMC Ports is preparing for a splashy IPO, one pegged at RM25 billion. These aren’t signs of a sector under strain—they’re markers of confidence and expansion. So what’s the urgency behind the THC hike?

Some context may lie overseas. With the US sharpening its scrutiny of Southeast Asian transshipment hubs—especially routes suspected of camouflaging Chinese exports—regional ports are feeling the heat. A potential dip in transshipment volumes could put revenue at risk. Faced with that uncertainty, it’s possible ports are looking to rebalance earnings by tapping local users instead.

But here’s the catch: THC charges don’t just stay at the port gate. They're typically passed down the line—from shipping lines to importers, from freight agents to factory floors. As Chandra bluntly points out, “solving a transshipment issue by increasing costs for local businesses is not the right approach.” And he’s right. It’s one thing to weather global headwinds. It’s another to deflect them onto domestic firms already battling thin margins and rising overheads.

It’s easy to talk about ports in isolation. Harder is acknowledging the full web of players who keep Malaysia’s trade machine running. Truckers, hauliers, depot managers, SME manufacturers, customs brokers—their role is less visible, but no less critical. When policies focus solely on terminals, these silent actors often absorb the fallout.

Consider the off-peak incentives rolled out for hauliers to ease traffic at Port Klang. Sounds efficient, right? Yet in practice, it’s created logistical headaches—drivers must now reshuffle hours, navigate inconsistent scheduling, and take on added fatigue. Not to mention, many haulage firms already operate at razor-thin profitability. What appears as optimization from one vantage point can easily feel like displacement from another.

Zoom out far enough, and the flaw in a port-centric approach becomes unavoidable. Malaysia’s container supply chain isn’t a straight line—it’s a system of interdependencies. Improve one node without adjusting the rest, and you don’t reduce friction. You just move it.

Yes, the THC increase had been telegraphed months in advance. But early signals are no substitute for real dialogue. The Federation of Malaysian Manufacturers (FMM) voiced concern over what it described as a lack of genuine industry engagement. If discussions took place, they weren’t widely felt. That’s not just a matter of optics—it’s a governance issue.

In policymaking, trust functions as a form of soft infrastructure. Leave stakeholders out of the loop, and you risk eroding that trust, even if the policy itself is defensible. Worse, you lose access to the insights those stakeholders can provide: warnings about practical knock-on effects, feedback on rollout mechanics, or suggestions that could turn friction into alignment. A consultative approach wouldn’t necessarily have blocked the THC hike. But it could have reshaped it—maybe with tiered timelines for SMEs, or a review mechanism tied to performance benchmarks. Instead, the process now carries the scent of top-down fiat.

If Malaysia wants to solidify its standing as a resilient trade hub, it must do more than patch holes or protect margins. It needs a full recalibration of how port policy is conceived and executed. That means shifting from a gatekeeper mindset to a system steward role. Here’s what that looks like:

Tie cost to value.
If THC is going up, users deserve something in return—better digital tracking, shorter clearance times, smoother yard coordination. Port authorities should treat this like any customer-facing upgrade: justify the cost with tangible service gains.

Give SMEs breathing room.
Not every player has the buffer to absorb sudden hikes. Small firms might benefit from a rollout grace period, temporary rebates, or targeted subsidies. These aren’t handouts—they’re stability measures.

Show where the funds go.
Transparency breeds trust. Outline how much of the new revenue will feed into tech upgrades, green infrastructure, or workforce skilling. Make it visible. Make it credible.

Think beyond the ministry.
Port policy isn’t just the Transport Ministry’s domain. MITI, Customs, SME Corp—all have a role in ensuring that trade facilitation policy aligns with actual business conditions. Coordination isn’t optional anymore.

Pilot before scaling.
Why not test the hike on a defined route or limited cargo class? Let the feedback loop sharpen the approach before going national. It signals responsiveness—and confidence.

For decades, ports have been seen as national trophies—symbols of global reach and trade ambition. And while that’s not untrue, the logistics reality has evolved. In a world ruled by just-in-time delivery, integrated warehousing, and regional fulfillment, the true value-add lies in seamless connectivity. A container may spend days waiting at a congested depot or stalled at customs—even if it cleared the quay in minutes. The weak link, not the strongest one, defines the system’s overall resilience.

Which brings us to the bigger point: modern logistics doesn’t revolve around the port anymore. It radiates from it. And unless policy reflects that radiating complexity, Malaysia will find itself competing not just with other ports—but with countries that have already moved to a full-chain model.

The transport ministry’s green light for a THC hike might balance the books in the near term, but it risks misjudging where the pressure is building. Ports no longer stand apart from the supply chain—they sit within it, tightly bound to every truck, depot, and invoice that follows. This should have been a moment to revisit strategy, not just raise fees. If Malaysia wants to be seen as a smart logistics player in the region, the policies must reflect systemic awareness, not siloed fixes.

It’s time to move from gatekeeping to ecosystem-building—and that means crafting rules that reward efficiency across the entire chain, not just at the entry point. Otherwise, what looks like progress from the tower might feel like strain on the ground.