LOGISTICS DEVELOPMENT STUDY OF THE INDONESIAMALAYSIA-THAILAND GROWTH TRIANGLE (IMT-GT

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Draft

Ruth Banomyong Centre for Logistics Research Faculty of Commerce & Accountancy Thammasat University

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EXECUTIVE SUMMARY Background 1. The development of logistics services and communication technologies has revolutionised production and distribution processes, and has created the “global” market. It is within this competitive environment that shippers and consignees require efficient logistics services that can move their goods at the right place, at the right time, in the right condition, and at the right price. 2. It is therefore of great importance that regional linkages among neighbouring countries are strengthened in the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) in order to facilitate trade, enhance regional economic integration and develop logistics for better access into the “global” market. Logistics is a relatively new development policy in the IMT-GT. It is acknowledged that having an efficient logistics system in the IMT-GT subregion can help support the existing corridors’ economic integration. 3. The IMT-GT Road Map identified five economic corridors as key to strengthening regional infrastructure to support increased intra- and extra-regional trade, investment and tourism. These are the (i) Extended Songkhla-Penang-Medan Economic Corridor; (ii) the Straits of Melaka Economic Corridor; (iii) the Banda Aceh-Medan-Pekanbaru-Palembang Economic Corridor; (iv) the Melaka-Dumai Economic Corridor; (v) and, the Ranong-Phuket-Bandah Aceh Economic Corridor. The economic corridor approach has been identified as a core strategy for accelerated development of the IMT-GT, and development of these economic corridors was declared a Flagship Project of IMT-GT at the 13th Ministerial Meeting of IMT-GT in Selangor in September 2006.1 4. A number of major infrastructure investments are already being undertaken by IMT-GT countries and more are planned. The physical connectivity between neighbouring countries will be significantly improved upon the completion of these infrastructural investments. The improving infrastructure, coupled with expanded cross-border cooperation among the IMT-GT countries, will accelerate the process of integrating the sub-region’s economic corridors into the rest of the world and the “global” market. 5. The main purpose of this executive summary is to provide possible logistics development policy for the IMT-GT based on empirical data gathered and analysed in the field and to propose possible policy recommendations. The paper is separated into 3 sections. Section 1 is a summary of the existing trade patterns in the IMT; Section 2 is a short discussion on the utilised methodology and findings while the last section proposes possible logistics development policy based on the logistics analysis of the 5 IMT-GT economic corridors.

1 “For IMT-GT, the corridor approach will (i) provide focus and serve as a catalyst to the development and growth
of ancillary activities and areas within and around the economic corridors, (ii) generate investment opportunities in terms of commercial activities and infrastructure support services, (iii) achieve synergy through clustering of projects within and around the economic corridors” (IMT-GT Roadmap of Development, 2007)

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Section 1: IMT-GT Trade Patterns 6. Within the IMT-GT countries, Malaysia has substantial trade with both Thailand and Sumatra. There is quite an important flow of goods between Thailand and Malaysia. This trade is bilateral, cross border and transit as well with a number of goods from southern Thailand utilising Penang Port as port of loading to other markets. There is also strong level trade between Malaysia and Sumatra with Port Klang playing an important role. However, trade between Thailand and Sumatra is not very developed as Thailand only plays a marginal role in Sumatra’s export and import trade. Trade linkage between southern Thailand and Sumatra must be further encouraged. 7. Malaysia’s plays a central role for trade flows in the IMT-GT. Thai exporters from the south of the country use Malaysia as a transit platform while Sumatra also sees Malaysia as a very important trading partner. However, Singapore is shown to compete up to a certain extent with Malaysia with regards to transit goods. 8. IMT-GT economic hubs can be determined based on their local economic activity as well as based on export/import trade value and volume. These preliminary criteria can help in the identification of potential IMT-GT economic hubs. In Thailand, potential economic hubs for the five IMT-GT corridors, based on these criteria, are: Hat Yai/Songkhla, Trang, and Phuket. In Malaysia, the potential economic hubs are: Penang, Port Klang and Malacca while in Sumatra the potential economic hubs are: Bandah Aceh, Medan, Dumai, and Palembang. Section 2: Methodology and Findings 9. The Methodology utilised for this study is similar to the one used for the NSEC logistics development study in 2007 and the EWEC logistics benchmarking study in 2008 by ADB. The methodology first assesses the IMT-GT macro logistics system capability based on four dimensions: (1) Infrastructure; (2) Institutional Framework; (3) Service Providers; and (4) Shippers/Consignees. Then a corridor “snapshot” methodology is used to analyse IMT-GT economic corridor logistics activities in terms of time and cost. The “snapshot” is then used as the basis for the corridor development level assessment. 10. In order to put IMT-GT economic corridors performance in perspective, the results are compared with the NSEC and EWEC economic corridors performance. These comparisons are only indicative as each corridor is subject to different characteristics in terms of time, cost and distance. 11. From the benchmark tables hereunder, preliminary investigation indicates that direct transport cost ratio in the IMT-GT are somewhat higher than the NSEC and the EWEC. The case of the Aceh-Palembang corridor is somewhat of an outlier as it is the only domestic corridor that is within the scope of the study. Comparatively speaking this means that formalities and other fees are less than in the other non IMT-GT corridors.

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12. it is important for all member countries to gain benefits from logistics integration and facilitation and not the other way around. Trade and transport facilitation can play a role in supporting economic growth within the sub-region. The overall impression from empirical evidence is that there are 2 distinct level of logistics integration in the 4 . Penang and Port Klang can play a crucial role in becoming the logistics platform for the IMT-GT region with its strong connection with southern Thailand and Sumatra. However. 14. especially between Thailand and Malaysia as there are already numerous projects in place. In terms of direct transport time. Infrastructure rehabilitation within Sumatra is still an important component of improved logistics in Sumatra. administrative and customs formalities. It is therefore important for the IMT-GT to have increased and enhanced cooperation. Table 1: NSEC/EWEC/IMT-GT Cost Comparison Route Physical Transportation 42% NSEC: R3W 40% NSEC: R3E Road 32% River 15% NSEC: Mekong River 56% EWEC: Danang-Tak 67% IMT-GT: Hat Yai-Medan 74% IMT-GT: Trang-Malacca 57% IMT-GT: Malacca-Dumai 100% IMT-GT: Aceh-Palembang 82% IMT-GT: Ranong-Aceh Source: The Author Table 2: NSEC/EWEC/IMT-GT Time Comparison Route Physical Transportation 80% NSEC: R3W 85% NSEC: R3E Road 32% River 54% NSEC: Mekong River 57% EWEC: Danang-Tak 25% IMT-GT: Hat Yai-Medan 51% IMT-GT: Trang-Malacca 8% IMT-GT: Malacca-Dumai 100% IMT-GT: Aceh-Palembang 35% IMT-GT: Ranong-Aceh Source: The Author Non transport activity 58% 60% 53% 44% 33% 26% 43% 0% 18% Non transport activity 20% 15% 14% 43% 75% 49% 92% 0% 65% 13. This is particularly true at border crossings where delays are the norms. The linkages between Sumatra and the other IMT-GT areas also need to be accelerated in order to gain the benefits from such as growth triangle. It must not be forgotten that one of the main characteristics of the IMT-GT corridors are that short sea shipping is also involved and thus require specialised equipment and facilities. the IMT-GT corridors do not seem to be as efficient as the others. 15. Physical infrastructure is not considered as a major issue. A lot more time is taken during loading/unloading.

Provincial governors should not solely focus on provincial issues but must be able to have the vision of linking their provinces within the IMT-GT Sub-region. Transport rules and regulations should be relaxed in order to promote efficient cross-border logistics and transportation. regional and international trade. This enhanced integration and cooperation is important for trade between Sumatra and Malaysia but even more for trade between Sumatra and Southern Thailand. there should be more institutional support for the enhanced integration of Sumatra into the IMT-GT. The specificity of “barter trade” in Penang for trade with Myanmar or Sumatra is a good illustration. Direct linkage between southern Thailand and Sumatra are non-existent or has to be done via Penang or Port Klang in Malaysia.IMT-GT. From a logistics development perspective the challenge will be on how to increase the logistics integration of Sumatra within the existing integrated logistics linkages between Thailand and Malaysia. They need more support in order to better understand how to implement the various IMT-GT agreements. 2 Meaning more than one mode of transport 5 . Coordination and support among provincial and central agencies in the IMT-GT is critical as there are still “gaps” in the understanding and the implementation of related IMT-GT agreements. It is important not to forget that logistics is a derived demand that supports local. particularly on perishable goods. 17. This can only be done if intra IMT-GT trade is supported and facilitated. Activities within the IMT-GT should foster on closer public and private collaboration as well as advancing the role of provincial and state governments. through mutual recognition of road vehicle registration. From the corridor analysis. vehicle inspection certificates as well as vehicle insurance across the border. Maybe it is also a question of capacity building from governmental officials’ perspective. The linkages between Southern Thailand and North Malaysia is quite well developed and the various corridors that links both countries can be considered as a logistics corridor. in particular those issues that are related to the current existing institutional framework. However there are still some important issues that need to be resolved. On the other hand the corridors linking Malaysia and Sumatra are more on the traditional 2 or “archaic” side as there seems to be only a multimodal transport corridor linking these 2 areas. 20. There is great potential for trade and investment between the two countries but the flows are currently still minimal and need to transit via Malaysia. and eliminating required upload and download practices at the cross-border areas. 16. 19. border. This can be carried out by abolishing transportation quota between Thailand and Malaysia. almost ready to be a full fledged economic corridor with the various industrial development projects that are currently being put into place. 18. This does not mean that there is no logistics linkage it only means that the type of logistics services available is a reflection of the type of trade between Malaysia and Sumatra. transport operating license.

Even if all these policies are implemented. 6 . Table 3: Proposed support policies relationship with IMT-GT logistics development issues IMT-GT logistics Proposed Projects issues Trade & Transport • Pilot implementation of trade and transport facilitation measures Facilitation between Hat Yai and Medan • Expansion of bilateral exchange of traffic rights arrangements between Thailand and Malaysia • Promotion of inter-provincial & district cooperation and coordination mechanisms (logistics facilitation) • Establishment of mechanisms to improve coordination between and among central.Section 3: Proposed IMT-GT Logistics Development Policy 21. provincial and border area officials Infrastructure • Improving road connections within Sumatra Development Infrastructure • Provision of maintenance funds roads in Sumatra Maintenance Capacity Building • Developing logistics capacity in the IMT-GT for public and private sector Further • Study on the establishment of IMT-GT logistics platforms/centres Development within the IMT-GT Studies • Study on the establishment of IMT-GT logistics standard information system 22. Table 3 shows the relationship between the proposed support policies and the key IMT-GT logistics issues discovered during the study. Each proposed policy measure is based on specific findings and issues discovered in the IMT-GT logistics development study. the challenge remains on how to transform these IMT-GT corridors into fully fledged economic corridors that can attract investment and generate economic activities in remote area of the corridor such as border crossings and certain remote areas located far from the sub-regional economic hubs.

.......3 Malacca-Dumai corridor........2. 19  4........................ 8  1..... Findings..................................................................................4 Aceh-Medan-Dumai-Jambi-Palembang corridor......... 38  Annex A: Logistics Infrastructure characteristics of the IMT-GT ..4 Section Summary ..........................3 Logistics Service Providers. 13  3..3 Thailand-Indonesia (Sumatra) ............................................... Research Framework........... INTRODUCTION......... 12  2................... Conclusions and Recommendations..5 Ranong-Phuket-Aceh corridor .........2..1 The Macro Logistics Scorecard ......................1 Songkhla-Penang-Medan corridor .....2 Institutional Framework & Shippers/Consignees ....3 Corridor Development Level Assessment Framework ........... 30  4.... 14  3.............. 63  7 ...................................1 Background .................................................... 8  1....................................2.....................................................1 Thailand-Malaysia .... 19  4..............................3 Some Definitions ......2..............................2 Malaysia-Indonesia (Sumatra)................................................................................................. 15  3...............................1 Macro logistics framework assessment..... 14  3.........................4 Section Summary ................. 27  4.......... 10  2..2 Trang-Satun-Perlis-Penang-Port Klang-Malacca corridor ..........1........................................1............1......1......................... 17  3................................. 19  4........................ 32  4......................... 19  4..............................2 Logistics Corridor Analysis ....................3 Section Summary: Comparing Trade Logistics Cost & Time ..........1 Infrastructure.............. 13  2....................... IMT-GT Trade Statistics ................. 34  4..................................... 36  5... 42  Annex B: Trade Statistics in the IMT-GT.............................2 The Logistics Corridor “Snapshot” Methodology ..................................................................................................... 21  4........2 Purpose of the study...2..................... 22  4..................................................................................... 12  2..... 10  1.... 12  2................ 17  4............... 21  4...........................

Figure 1. and has created the “global” market. 2007) 8 . the corridor approach will (i) provide focus and serve as a catalyst to the development and growth of ancillary activities and areas within and around the economic corridors.1 provides a graphic illustration of the IMT-GT and its economic corridors. (v) and.and extra-regional trade. There has been a shift in the spatial structure of the global economy. the Ranong-Phuket-Bandah Aceh Economic Corridor. (ii) generate investment opportunities in terms of commercial activities and infrastructure support services. The dynamic of uneven development is an area that needs to be taken into account. as developing countries have different level of growth and economic development. (iii) the Banda Aceh-Medan-Pekanbaru-Palembang Economic Corridor. industrial organisation. and at the right price.1 Background 1. (ii) the Straits of Melaka Economic Corridor. 4. The development of logistics services and communication technologies has revolutionised production and distribution processes.3 3 “For IMT-GT. The economic corridor approach has been identified as a core strategy for accelerated development of the IMT-GT. (iv) the Melaka-Dumai Economic Corridor. It is within this competitive environment that shippers and consignees require efficient logistics services that can move their goods at the right place. The IMT-GT Road Map identified five economic corridors as key to strengthening regional infrastructure to support increased intra. in the right condition. from the West to the Pacific Rim.1. and development of these economic corridors was declared a Flagship Project of IMT-GT at the 13th Ministerial Meeting of IMT-GT in Selangor in September 2006. at the right time. INTRODUCTION 1. investment and tourism. It is therefore necessary to search for a development policy on how to sustain growth and maintain competitiveness. 3. enhance regional economic integration and develop logistics for better access into the “global” market. 2. (iii) achieve synergy through clustering of projects within and around the economic corridors” (IMT-GT Roadmap of Development. 5. These are the (i) Extended Songkhla-Penang-Medan Economic Corridor. restructuring and relationships with institutional and social regulatory forms. The global world economy is integrated in a particular international division of labour. Sustainability and competitiveness can be achieved through the understanding of the dynamics of new spaces of productions. It is therefore of great importance that regional linkages among neighbouring countries are strengthened in the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) in order to facilitate trade.

Figure 1.1: The IMT-GT Source: Adapted from ADB 9 .

6. coordination among participants. The logistics analysis of each corridor within the IMT-GT. To reap the substantial potential benefits of integrated economic corridors. trans-shipment. A number of major infrastructure investments are already being undertaken by IMT-GT countries and more are planned. and financing of transactions4. IMT-GT countries need to have a clearer understanding of the opportunities and challenges that will arise from this economic integration process. The improving infrastructure.g. and controls the efficient. procurement. transport. services and related information between the point of origin and the point of consumption in order to meet customers’ requirements” Council of Supply Chain Management Professionals (2004) 10 . Logistics covers not only the physical movement of goods (e. The methodology used for logistics analysis. 1. Adequate transport and communications facilities are considered major determinants of trade performance and of the costs and profitability of trading internationally. which is the integration of key business processes from end user through original suppliers that provides products. implements. The paper will cover 4 issues related to the logistics analysis of the IMT-GT: • • • • Trade statistics. 4 “Logistics Management is that part of Supply Chain Management that plans. will accelerate the process of integrating the sub-region’s economic corridors into the rest of the world and the “global” market. coupled with expanded cross-border cooperation among the IMT-GT countries. consolidation.2 Purpose of the study 8. services. The physical connectivity between neighbouring countries will be significantly improved upon the completion of these infrastructural investments.3 Some Definitions 9. 7. storage. monitoring of activities. The main purpose of this paper is to provide a logistics analysis of the IMT-GT based on empirical data gathered in the field and to propose possible policy recommendations. and. Closely linked to this concept of logistics is the concept of supply chain management. Efficient logistics corridors can play an important role in increasing the subregion’s trade competitiveness. and packaging) but also the facilitation of this movement through the processing of documents. effective forward and the reverse flows and storage of goods. Possible development policy recommendations. 1.. 2001). and information that add value for customers and other stakeholders (Stock & Lambert.

Second. precaution must be taken when trying to formulate logistics related policies. There is also a heavy reliance on specialized service providers such as freight forwarders or customs brokers that can facilitate the flows of goods across borders. people and information within and between logistics systems. logistics is one of the major expenditures for businesses. for the purpose of enhancing traders’ competitiveness in order to increase national and/or regional competitive advantage. In most countries there is still a lack of understanding of the concept of logistics and how a logistics policy can be developed. However. 11. The biggest difference between domestic and international logistics is the environment in which the logistics system operates. The proposed working definition is: “Logistics development policy is the process of planning. In an international logistics system. Logistics is not just confined to within national borders or markets as within each country or region as there are export and import firms that face specific logistics attributes that may be different from those experienced in the domestic market. In order to formulate an adequate logistics development policy it is necessary to develop a working definition for logistics development policy for the purpose of the study. 13. In this sense logistics is a derived demand of trade. and institutional framework is needed to develop national or regional logistics development policy. effective flow and storage of freight. many state agencies and in particular Customs play a very important role in facilitating the efficiency of the logistics system.10. logistics supports the movement of multitude of economic transactions. The most common mistake seems to be where a logistics development policy is nothing more than a transport investment infrastructure plan. it is an important aspect of facilitating the sale of all goods and services. facilitating. 12. Logistics is a firm level concept but is considered as an important factor in sustaining a country’s or a region’s competitive advantage at the same time. implementing. It is important to recognise that logistics adds value to businesses by placing goods and services where they are needed to make the business successful in meeting customer needs. infrastructure capacity. Logistics plays a key role in national and regional economies in two significant ways. integrating and controlling the efficient. First. Logistics from a policy perspective is much more than just transport infrastructure development and a holistic approach that addresses the requirements of traders’ needs. service providers’ expertise.” 11 . thereby affecting and being affected by other economic activities.

2. Malaysian exports to Thailand are quite small in terms of value with most of goods being heavy industrial equipment that are utilised locally in Southern Thailand. Nonetheless. The following section provides a brief description of trade statistics and patterns in the IMT-GT. 2. Malaysia plays an important role as a transit country for Thai export goods from the South of Thailand. Lao PDR or Cambodia. Sumatra was relatively less problematic as official statistics also provided import and export volume. 16. Barter trade between both countries is important but barter trade data is not easily available. IMT-GT Trade Statistics 14. Malaysia mostly exports general goods. The biggest problem with the available trade statistics is that they mostly provide trade value and not trade volume.1 Thailand-Malaysia 15. Another issue is the lack of specific IMT-GT trade data. agricultural products to timber . Among ASEAN countries.2. Thailand exports more than it imports via Malaysia with rubber products being the main commodity. it was discovered that trade volumes could be somewhat estimated based on “in the field” knowledge of local authorities but these estimations are still somewhat arbitrary. 12 . However. Malaysia is an important trading partner for Sumatra Island.2 Malaysia-Indonesia (Sumatra) 17. some agricultural products and used goods while exports from Sumatra ranges 5 from seafood. it seemed that it was impossible to find actual trade statistics specifically for trade within the subregion. the available data does provide some indication of trade patterns within the sub-region itself (please see Annex B for more details). In comparison to Thai exports. 5 Asia Survey & Services (2004) “A Study to Identify Barter Trade Opportunities in the IMT Development Cooperation”. Malaysia is the top ASEAN exporter into Sumatra but not the top destination for Sumatra’s export. The rubber products that are exported from Songkhla are loaded onto seagoing vessels in Penang for their final destination. This is particularly true for the import of consumer products and industrial goods to Sumatra. with regards to IMT-GT trade statistics. Thailand mostly exports agricultural products while Malaysia exports industrial goods to Thailand. Main direction of trades can be found with relevant IMT-GT countries being included but none that could identify specific IMT-GT origin and destination. Unpublished report. During subsequent discussion with relevant stakeholders. Malaysia is the 2nd biggest trading partner for Thailand behind Singapore and has the highest ratio of border trade in terms of value compared to other neighbouring countries such as Myanmar.

Exports from Sumatra are mostly destined to the Far East and North America. This trade is bilateral. Port Klang and Malacca while in Sumatra the potential economic hubs are: Bandah Aceh. Sumatra’s exports are mostly composed of mineral fuel. oil products. It is interesting to note that Malaysia’s role in the IMT-GT is very central in the flow of trade within the sub-region. Singapore is shown to compete up to a certain extent with Malaysia with regards to transit goods. Medan. trade between Thailand and Sumatra is not very developed as Thailand only plays a marginal role in the Island export and import trade. 23. this lack of data and of volume may represent an opportunity for trade as there is demand for Thai products in Sumatra and southern Thailand does need Sumatra’s traditional export commodities such as mineral fuel and fertilisers. the potential economic hubs are: Penang. Dumai. 13 . 2. cross border and transit as well with a number of goods from southern Thailand utilising Penang Port as port of loading to other markets. and fertilisers. There is also strong level trade between Malaysia and Sumatra with Port Klang playing an important role. based on these criteria. Direct trade between Southern Thailand and Sumatra is almost non existent. potential economic hubs for the 5 IMT-GT corridors. However. Import from Thailand to Sumatra is again minimal. Thai exporters from the south of the country use Malaysia as a transit platform while Sumatra also sees Malaysia as a very important trading partner.4 Section Summary 20. In Malaysia. This trade linkage between southern Thailand and Sumatra must be further encouraged. 2. However. In the IMT-GT countries Malaysia has substantial trade with both Thailand and Sumatra.3 Thailand-Indonesia (Sumatra) 19. There are trade flows between Thailand and Sumatra with fertilisers being one of the main exports from Sumatra but the data does not show the precise destination location. and Palembang. In Thailand. are: Hat Yai/Songkhla. Singapore does play a role as a transhipment platform for goods originating or destined for Sumatra. Sumatra’s export trade with other IMT-GT countries is minimal compared to its total export volume. 21. These preliminary criteria can help in the identification of potential IMT-GT economic hubs.18. 22. and Phuket. chemicals. However. Trang. IMT-GT economic hubs can be determined based on their local economic activity as well as based on export/import trade value and volume. There is quite an important flow of goods between Thailand and Malaysia.

1 The Macro Logistics Scorecard 25. a specific methodology is needed. A national or regional logistics system scorecard is based on the 4 dimensions of a logistics system. institutional framework. Figure 3. A number of key performance indicators have been identified to compare and contrast the logistics capability of IMT-GT member countries. 14 . The four components of a macro logistics system are: infrastructure. The assessment provides an overall picture of IMT-GT member countries logistics capability based on these 4 distinct dimensions.3. The macro assessment is based on empirical and secondary data for the 4 dimensions in the IMT-GT. The purpose of the methodology is first to describe the current logistics situation also known as the “AS IS” situation within the IMT-GT and then explore possible development policies that may lead to the best “TO BE” situation. In order to formulate adequate and relevant IMT-GT logistics development policies. These 4 dimensions can be utilised as a starting point in terms of framework that is needed for macro evaluation purposes. 3.1: Macro Logistics Assessment Framework Source: The Author 26. service providers and traders as represented in the figure hereunder. Research Framework 24.

However. At ports and inland terminals. 31. Average Time Range Of Time Average Cost Range Of Cost Actors Documents/ Operations Distance (cumulative) 15 . 1 2 3 Source: The Author 30. rail. road transport should normally be the most expensive (at least over a certain distance). railfreight terminals. 29. inland waterway. The cost and time model.1). and waterway and rail costs should be intermediate. A corridor “snapshot” methodology need be utilised in conjunction with the overall macro assessment in order to provide an indication of specific logistics system performance. This is particularly true when assessing the performance of a logistics corridor. for volume movements. When the data is collected for a particular product along a particular corridor. Table 3. This table is similar to a simplified process activity map. This is the rationale behind the development of the corridor “snapshot” methodology. inland clearance depots) as cost components (See Figure 3. a vertical “step” in the cost curve therefore represents the costs incurred there. The following table is a template for the data that is needed to draw the logistics cost and time model.1: Template for simplified process activity map Activity No. there is also a need to be able to analyse the logistics capability of the 5 identified economic corridors as the macro assessment cannot provide corridor level details. This “snapshot” methodology can be done through the use of a detailed logistical activity map of specific products moving within a given logistics corridor. the data can then be graphically illustrated in a logistics corridor cost and time model. which is presented here. sea) and intermodal transfer (ports.27. 3. includes both transport (road. sea transport should be the cheapest per tonne-km. This model will help describe the cost and time components of movement from origin to destination by each available route and mode as well as to illustrate the delays at borders or other inspection points up to the point of destination within a given logistics corridor. a freight handling charge is levied without any material progress being made along the supply chain. with the steepness of the cost curves reflecting the fact that. The model assumptions are based on the premise that unit costs of transport vary between modes.2 The Logistics Corridor “Snapshot” Methodology 28.

where applicable). as well as indicate the approximate proportion of non-transport costs in relation to transport costs. A unit of analysis must be agreed upon in order to better illustrate the situation in the corridor. This data are not usually publicly available but they are of critical importance when assessing logistics corridor efficiency. In the case of costs or quotes. The minimal amount of information needed to build the graphical model includes: • • • • • • The origin and destination of the cargo. Further information. Mode of transport for each leg. traders and governmental officials. The data utilised when creating this graphical model can be based on cost/quotes or transit time components that are obtained during interviews with transit and transport service providers. for example. cost and time will be different. road to rail Sea Rail Road Origin ICD Sea Port Sea Port Port handling charge Inland Waterway Transhipment to barge River Terminal Destination Distance Source: The Author 32. Distances involved for each leg.Figure 3. 34. Depending on the corridor chosen. The height of the step is proportionate to the level of the charge or the time taken. Transit time for each leg (in hours or days). the combination of modes. The full routeing from origin to destination. a breakdown of costs at 16 . with and indication of the places where the cargo is essentially stationary (such as border crossings and points of intermodal transfer). The cost and time data gathered is then plotted against the distance for each leg of the journey.1: Cost-model for multimodal transport Unloading Costs Transhipment to truck Road Intermodal transfer. Data on transit times offered for each transit route and the variation in delays at critical nodal links must also be obtained from the same group of respondents. the figure will graphically show the relative cost of each leg (or mode. 33. and Cost or quotes for each leg.

border crossings or ports. This development level framework will be used in the assessment of the 5 main corridors in the IMT-GT. people and related information. 3. can highlight areas for action by policy makers. Stage Level 1 Level 2 Corridor Transport Corridor Multimodal Transport Corridor Definition Corridor that physically links an area or region Corridor that physically links an area or region through the integration of various modes of transport. the higher the vertical step the more likely that the border crossing or the nodal link is a bottleneck in the logistics corridor. This “AS IS” situation can be measured based on a macro logistics scorecards that is based on the 17 . The objective is to reach level 4 which is a full fledged economic corridor. As a rule of thumb. the relative speed of transit transport for each leg (or mode) can be compared. it is then necessary to clarify the corridor’s developmental level. This clarification enables policy makers to better understand the corridor they are dealing with and what should be priorities in terms of development. Level3 Logistics Corridor Level 4 Economic Corridor Source: The author 36. The different level of corridor development will provide the basis for classification of these corridors. The purpose of this section was to propose an overall methodology to support the formulation of logistics development policies.4 Section Summary 37. Similarly. Corridor that is able to attract investment and generate economic activities along the less developed area or region. 3. Physical linkages and logistics facilitation must be in place in the corridor as a prerequisite. The methodology is based on an in-depth understanding of the “AS IS” situation of the logistics system of a country or a region. After the chosen corridor has been assessed based on the cost and time dimension.3 Corridor Development Level Assessment Framework 35. Corridor that not only physically links an area or a region but also harmonise the corridor institutional framework to facilitate the efficient movement and storage of freight. and the bottlenecks at transhipment points can be identified. The assessment is based on the outcome of the corridor “snapshot” methodology. by plotting time against distance.

A level assignment framework to represent corridor development level is also provided. 18 . The assignment is based on the corridor “snapshot” methodology output. However. (2) Logistics Service Providers. the region or the corridor. 38. and (4) Infrastructure.performance of four logistics components: (1) Shippers & Consignees. (3) Institutional Framework. the data for this logistics scorecard may not fully describe particular logistics corridors. This would help in the formulation of logistics development policy that is suited to the logistics system of the country. The proposed methodology can clearly illustrate where the strong and weak points within any logistics corridor. It was therefore proposed to utilise a corridor “snapshot” methodology to graphically illustrate logistics corridors based on logistics corridor activity mapping.

2 Institutional Framework & Shippers/Consignees 42.4.1. It is expected that trade rules and procedures to and from the 3 countries should in theory not be so different. this does not mask the reality that infrastructure in certain segment of the IMT-GT is still lacking. Infrastructure will need to be harmonised to facilitate the movement of goods and people along the corridor (Please see Annex A for a more detailed description). 4. The described export and import cost does not include the cost of freight. The 3 IMT-GT countries are part of ASEAN and the ASEAN Free Trade Agreement. The purpose of this section is twofold. 19 . Table 4. Findings 39. Table 4. 4.1 Macro logistics framework assessment 40. However. there are still some dimensions that overlaps such as the institutional framework and the cost as well as the time related to export and import procedures. However. The macro logistics system can be assessed based on four dimensions. Logistics service providers are the operators that operates based on the existing infrastructure (hardware) and institutional framework (software).1.1 presents an overall assessment of the infrastructure in the IMT-GT based on existing infrastructure characteristics. The first objective is to provide an overview of the macro-logistics framework while the second objective relates to the in-depth analysis of the 5 IMT-GT corridors. This is clearly not the case as illustrated in these comparative tables of export and import cost of the 3 IMT-GT countries.1 IMT-GT logistics infrastructure characteristics Road Port IWT Good Fair/Good Fair Malaysia Good/Fair Fair Fair Thailand Fair Fair Fair Indonesia Source: Compiled from industry data Airport Good/Fair Good/Fair Fair Railway Good Fair/Poor Fair/Poor 4.1 Infrastructure 41. The logistics infrastructure in the IMT-GT is considered adequate for the present volume of freight and vehicle moving along the main economic corridor with some reservation for the Sumatra domestic corridor.

the more expensive it becomes for the shipper/consignee.43.2: IMT-GT export cost and time comparison per TEU Country Nature of export procedure Document Preparation Indonesia Customs clearance & technical control Port & terminal handling Indonesia Export Total Document Preparation Malaysia Customs clearance & technical control Port & terminal handling Malaysia Export Total Document Preparation Thailand Customs clearance & technical control Port & terminal handling Thailand Export Total Source: Adapted from www.org Days 14 2 2 18 10 2 3 15 9 1 4 14 Cost (US$) 210 169 165 544 120 40 107 267 270 50 75 359 45. Loading and unloading will usually take longer than crossing a land border per se. Table 4. Countries in the IMT-GT subregion facilitate export more than import and that is reflected in their import procedures. This directly affects their competitiveness. Import into Indonesia is characterised by long lead time.3: IMT-GT import cost comparison per TEU Country Nature of import procedure Document Preparation Indonesia Customs clearance & technical control Port & terminal handling Indonesia Import Total Document Preparation Malaysia Customs clearance & technical control Port & terminal handling Malaysia Import Total Document Preparation Thailand Customs clearance & technical control Days 15 4 6 25 9 1 2 12 8 2 Cost (US$) 210 125 165 500 72 41 107 220 300 66 20 . not only in connecting to regional IMT-GT market or ASEAN but also to the global market. exports are somewhat shorter and should reduce the strong imbalance between actual transport time and non transport activity if the study explored the traffic of the various IMT-GT corridors from an Indonesian export perspective. The cost and time represented in the tables hereunder are also a reflection of complicated and cumbersome procedures as well as in certain places weak infrastructure. In fact the Thai-Malay land border crossing performance should be taken as an example of best practice in terms of efficiency and cost even though improvement is possible. The amount of time taken and cost involved are clearly important burden for the shippers/consignees.doingbusiness. Document preparation is the most time consuming activity as well as the most expensive. Table 4. This in turn affects the competitiveness of countries in the IMT-GT as well that of the region. The longer it takes. 44.

These discrepancies in trading and customs procedures between IMT-GT countries are one of the major obstacles to the integration of the sub-region.4: Logistics services provided in IMT-GT countries Logistics Services Indonesia Malaysia Provision of Domestic Containers Yes Yes Track & Trace capability No Partial Distribution centers Partial Partial Cross docking facilities Yes Partial National booking centers Partial No Standard Service Contract Partial Partial House B/L Yes Yes Multimodal Transport Document Yes Yes Forwarding Industry concentration Partial No Concentration of foreign LSP Yes Partial Trucking industry concentration Yes Partial Truck leasing Yes Partial Source: Adapted from ASEAN logistics sector integration study (2006) Thailand Yes Yes Partial Partial Partial Partial Partial Partial No Partial No No 48. Currently there are still gaps in logistical services provided within the IMT-GT. This perception is also confirmed in the analysis on the specific IMT-GT corridors were the Malaysian context is the most facilitating for trade and logistics followed by Southern Thailand and Sumatra.3 Logistics Service Providers 47. These local providers are under much competition from major courier companies as well as from local manufacturers who prefer to in-house their own logistics. Local logistics service providers in the IMT-GT are SMEs with limited capital and knowhow. The strong trait of the local service provider industry is its flexibility capability on a localized scale 4.1. Harmonisation and simplification is needed to enhance the integration of the subregion. The cost and time is based on quotes. It is interesting to note that if all the infrastructures as well as the regulatory framework is in place then there will be more entry opportunities for foreign global service providers as local firms do not have the capital nor the network to compete with these global companies. The following section is a description of the 5 IMT-GT corridors based on a logistics perspective. Table 4. 4. Malaysia seems to be the most open economy followed by Thailand and Indonesia.2 Logistics Corridor Analysis 49.Port & terminal handling Thailand Import Total Source: Adapted from www.org 2 12 200 566 46.doingbusiness. estimate provided by local service providers 21 .

move them to the south of Thailand for stuffing and re-export via Penang port. There is a terminal.2. The demand from southern Thailand is so strong that there is a strong imbalance with many empty containers being carried from Penang port into Thailand for stuffing and re-export. it was confirmed that traditionally. Not only are Thai logistics companies providing services up to Penang port but they are also acting as shipping agents for certain shipping lines based in Penang. Many of their local shippers/consignees are traders located in Hat Yai that export rubber and para wood via Penang in Malaysia. Customs facilities may need to be expanded as during peak hours congestion is becoming an issue as delays become inevitable. The IMT-GT is not currently considered as a major driver of growth for local Thai businesses as the focus is solely on the Hat Yai to Penang linkage with third countries. These numbers and figures are solely for illustrative purpose to support intellectual discussions on IMT-GT issues and to pinpoint where the bottlenecks are. The Thai excise department also forbids Thai trucks to refuel in Malaysia. Exporters and manufacturers are well served by numerous local logistics service providers. 51. then come up with grand statements and the implementation is left to permanent government officials and business leaders from the IMT-GT countries. 54. The local entrepreneurs are feeling that they are being left to their own device. 22 . This is particularly true for those exporters who are exporting rubber related products as well as those in the agro-industry. It takes around 1 to 1 ½ hour to go from Hat Yai to Dan Nok. 53.and shippers/consignees plying their trade within the IMT-GT. This is particularly true when national leaders meet. This enables them to get access to empty containers in Penang. their current biggest worry is competition from port Klang in attracting the said Thai cargo. In Penang. called the Prai terminal that is specifically dedicated for “barter trade” with cargo to and from Sumatra and Myanmar.1 Songkhla-Penang-Medan corridor 50. the export of Thai rubber and para wood from the south of Thailand is done via Penang Port. Both borders are used for the transit of freight but the most favoured route is currently the one via Dan Nok & Changloon while the more traditional border crossing is the one at Padang Besar. There are still some minor operational problems for border crossings but many issues have been resolved. 52. The Songkhla to Penang is a very important corridor for Thai exporters located in the South of the kingdom. most Thai trucks arrive at the border in the morning in order to be cleared into Malaysia in the afternoon. Wan Hai Line is currently one of the biggest movers of containers for Thai southern exporters. especially in logistics related services. 4. especially compared to Malaysian prices as well as the lack of opportunities for Thai to invest and operate in Malaysia. According to local sources. However. Their biggest complaint is currently the high price of fuel.

Most of the commodities being moved are cabbages/coffee and animal feed from Belawan to Penang and from Penang to Belawan. In Belawan port one of the biggest concerns is the access road to and from the port as the infrastructure is in a poor state and cannot cope with the number of trucks. However. There used to be a ro-ro operator between Belawan and Penang but now has moved to Aceh due to insufficient demand. it takes 1 day to stuff or un-stuff a container at the container freight station (CFS). The container terminal in Belawan caters both for domestic and international freight. On average. The cost to actually transport a container between Belawan and Medan is less than the actual cost of processing the entry of the imported goods. The trucking cost between Belawan and Medan has been quoted at USD 100 per TEU with an average transit time of 1 hour. 58. There is only one weekly feeder service between Belawan and Penang. The cost between Penang and Belawan is even 23 . Table 4. Strangely enough the cost of transport by sea is higher than the cost of the transport by road. The most important non transport related cost is the Customs license. most of the direct traffic is done via small wooden boats that use the bulk (Prai) terminal. 59. Export and import procedures from Belawan port are still expensive and complicated with missing documents creating delay in the process itself. However. These small boats have a natural advantage as pilotage is not compulsory for them.5 provides a description of the cost and time increases within the Hat Yai to Medan corridor. The estimate is that around 12% of Penang cargo throughput originates from or is destined for the Penang area but Penang port is still congested and not well managed from the perspective of some users. it is not unusual that the trucking time is often more than 2 hours between Belawan and Medan because of transportation problems such as traffic jams and the truck’s own bad conditions. 60. at Belawan. There is only one weekly service. Cargo flows within the IMT-GT region are mostly concentrated between southern Thailand and North Malaysia while minimal with Sumatra.55. 56. Speed money or “tips” do not seem so high compared to all the other related costs. This is probably due to the limited number of sailing between Belawan and Penang port. There use to be many wooden vessels providing such service but now the fleet has been greatly reduced only. Most of the international freight is transport via Singapore while Port Klang only represents 2 to 5%. It is interesting to note that the port operator in Belawan was unable to identify the feeder link with Penang. 57. mostly consumer products while there are some shallots from northern Thailand (seasonal products). It is not uncommon to find up to 12 overlapping agencies with jurisdiction over a particular commodity. The export process usually takes 2-3 days until the commodities can leave Belawan port and can be as expensive as US$ 170 per container (or US$ 250 if fumigation is needed). If the goods need to be quarantined then non transport related cost can be a high as twice the transport cost. Another issue that is worrying is the number of overlapping agencies with jurisdiction over export and import cargo (which also depends on the type of commodity). Import cost is usually much more expensive than export cost at an average of US$ 250 to 300. The ratio is currently estimated at 50% for each.

24 . This does pose a dilemma as it seems that it would be preferable to utilise the Port Klang-Belawan link instead.higher by over 100 US$/TEU than the cost between Port Klang and Belawan.

45 Penang-Prai terminal 0.5: Cost and time data on the Hat Yai-Medan corridor Location/Activity Transport Cost Mode ($/ton) Hat Yai to Sadao Road 2.85 Source: compiled from industry Time (hrs) 1. Figure 4.83 • Transloading Bukit Hitam to Penang port 2. Border crossing time at the Thai-Malay border is seen as more seamless. Figure 4.63 • Import processing fee Belawan port to Medan Road 5.5 Distance (km) 60 N/A N/A 0.83 • Export processing fee Bukit Hitam 2.00 Belawan port 2.2 is a description of the total door to door transit time.16 • Wharfage handling charge 0.Table 4.25 Sadao 1.22 • Import processing fee 1.55 TOTAL 45.5 0.15 • Surcharge for loose cargo Penang to Belawan Sea 20.42 • Unloading/Loading 4. The longest delay is at the port of Belawan dues to relatively long import procedures.46 • General charge 1.1: Hat Yai to Medan Cost Model Source: The Author 25 .5 3. It is interesting to note that the cost of border crossing represent almost 23% of the door to door cost while physical transport is at around 67%. Figure 4.5 N/A 6 150 N/A N/A 15 8 48 1 85 260 11 481 61.90 Local Malay toll fee 0.1 is a graphical illustration of the door to door cost on this particular corridor.

6 assesses the development level of the Hat Yai to Medan corridor and provides a description of the corridor level. The direct linkage between southern Thailand and Sumatra are almost non-existent or has to be done via Penang or Port Klang.2: Hat Yai to Medan Time Model Source: The Author 62. The linkages between Songkhla and Penang are quite well developed while on the other hand the links between Penang and Medan are more on a traditional basis or “archaic”.Figure 4. even though within each respective IMT-GT countries there are domestic corridors that are at a logistics and almost economic corridor development level. The overall impression from following the Songkhla-Penang-Medan corridor is that there are 2 distinct level of logistics integration.6: Hat Yai to Medan Corridor Development Level From To Hat Yai Sadao Sadao Bukit Hitam Bukit Hitam Penang Penang Belawan Belawan Medan Overall level Level 3 2/3 3/4 2 3 2 26 . This table is quite interesting as the overall assessment is only equivalent to a level 2 corridor which is a multimodal transport corridor. The weakest point in this corridor is the weak physical linkages between Penang and Belawan port. Table 4. This seriously hinders the integration of this IMT-GT corridor. This does not mean that there is no logistics linkage it only means that the type of logistics services available is a reflection of the type of trade between Penang and Sumatra. Table 4.

40 26. There has also been much progress in enhancing sea transport linkages between southern Thailand and northern Malaysia.5 24 Distance (km) 18 N/A 225 N/A 6 0. Plans for new port construction and expansion will help boost regional economic growth in the southern part of Thailand. supporting infrastructures such as CIQs along Thailand and Malaysia border have also been upgraded to facilitate more movement of goods and passengers.00 • Wharfage Import processing fee N/A 2. 66. This has offered a modal alternative for shippers based in Trang for access to mainline vessels in Penang. Table 4.25 Kantang port unloading/loading N/A 1.5 8 64 N/A 420 663 27 . freer labour mobility and nearly zero fees to enhance the investment climate in its three southernmost provinces.22 Penang to Malacca Road 5. The Kantang express provides vessels of up to 160 TEU between Kantang and Penang on a twice weekly service basis. 65.Source: Compiled from industry sources 4. Table 4.00 Penang port loading/unloading N/A . and in particular Penang port.7: Cost and Time Data between Trang and Malacca Location/Activity Transport Cost Mode ($/ton) Trang to Kantang port Road 2.2. The efforts along this particular corridor have been multi-modal with land as well as coastal linkages. 64.2 Trang-Satun-Perlis-Penang-Port Klang-Malacca corridor 63.50 Thai export processing fee N/A 1.20 • General transshipment charge 1.7 describes in details the cost and time component of this particular corridor.40 TOTAL Source: Compiled from Industry Time (hrs) 1 24 0. Furthermore. Cross-border trade and investment flow between Southern Thailand and Malaysia has been traditionally strong particularly in agriculture where joint ventures for commercial production have been set up to tap economic complementarities. Thailand has established an ad hoc special development zone enjoying tax holidays.83 Kantang to Penang Sea 12. Kantang port has played a key role is bridging the connection between Trang province and Penang. Traffic growth between Kantang Port in Trang Province of Thailand and Penang Port of Malaysia averaged 37 percent per year since Trang Province became a member of IMT-GT in 2004. The building of physical connectivity has been the central means for promoting closer economic and social linkages in the IMT-GT. The development of road and bridge networks between Thailand and Malaysia has facilitated better movement of goods and people across the border.

Figure 6. Figure 4. It is true that there are more and more containers moving between both ports but there is no critical mass yet. The longest delay occurs at Kantang port in Thailand. The reasons behind the delays come from the fact that the port is not a fully containerized port with all the necessary equipments for the efficient loading/unloading of containers. Transportation cost has a ratio of 74% of the total cost with sea transport between Kantang to Penang taking up to 45% of the total transport cost.4 describes the door to door transit time.3: Trang to Malacca Cost Model Source: The Author 68. sea transport cost is quite expensive but this is also a reflection of the limited traffic that exists between Kantang and Penang. Figure 4. Figure 4. In terms of distances.3 is a description of the door to door cost on this corridor.4: Trang to Malacca Time Model Source: The Author 28 .67.

funding. It is interesting to note that Malaysian truckers consider that the Thai government supports the Thai trucking industry while the Thai truckers believe that the Malaysian 29 .05 US$ per metric ton-km or 1.05 US$ per metric ton-km or 1.04 US$ per metric ton-km or 1. by combining both physical infrastructure. the rates to be charged for the carriage of goods for hire and reward are fixed by the government as per the Fifth Schedule Fees.48 kg 0. For consignment of less than 60. strengthening the utilities infrastructure to support economic growth.02 US$ per metric ton-km laden Forty footer (FEU) container rate is twice the TEU container rate Other Haulage Rate For consignment exceeding 60. The table 4. and establishing a dedicated organisation to drive and coordinate the implementation. fuel is based on the market prices.02 US$ per metric ton-km laden Long Haul (exceeding 96 km from the • For the first 60 km or part thereof-0. whichever is greater For exclusive use of the vehicles 0. The focus shall be on improving national and regional connectivity. such as irrigation. Fares and Rates.48 kg 0.05 US$ per for one TEU) metric ton-km laden • For every km up to 32 km or part thereof-0.6 US$ per metric ton-hour. competitive incentives that would encourage businesses to invest in the promoted areas. Container haulage fees in Malaysia is higher than in Thailand but the operating cost may be different as fuel price is subsidised in Malaysia while in Thailand.6 US$ per metric ton-hour. incentives and an improved public service delivery system.6 US$ per metric ton-hour based on full rate capacity regardless of actual load Source: Compiled from Industry 71.04 US$ per metric ton-km laden • For every km or part thereof-0.06 US$ per port zone for one TEU) metric ton-km laden • For every km up to 60 km or part thereof-0. as well as soft infrastructure such as human capital.04 US$ per metric ton-km laden • For every km or part thereof thereafter-0. whichever is greater. The Malaysian Government will provide an environment conducive to economic development. The Malaysian part of this corridor mirrors the Malaysian Northern Corridor Economic Region (NCER) development project.8: Malaysian Container Haulage Fee Container Haulage Rate Short haul (96 km from the port zone • For the first 23 km or part thereof-0. In Malaysia.69. Trucking rates are based either on distance or on metric tons per hour whichever is the greater. utilities and transportation. providing targeted.8 hereunder provides the fees guideline for haulage in Malaysia as published by the Malaysian government. 70. Table 4.

Table 4.10: Cost and Time Data between Malacca and Dumai Location/Activity Transport Cost Mode ($/ton) Malacca port N/A 0.63 • Import processing fee TOTAL 20. There is high corridor development level in Southern Thailand and Northern Malaysia.16 • Wharfage handling charge 0. there is sufficient level of service but there is not yet enough integration to move to a higher corridor development level. There are no regular cargo vessels plying their trade on this particular route.3 Malacca-Dumai corridor 74. 72. Table 4.10 provides cost and time information between Malacca and Dumai. 4. Table 4. This does not mean that the Kantang to Penang is a “bad” or “weak” link.42 • Unloading/Loading 4. It only means that based on the existing freight volume between both ports. This corridor is the shortest corridor within the IMT-GT. there are some small wooden boat operators that provide some freight services. the weakest link in this corridor is the Kantang to Penang sea link which could be improved in terms of frequency and efficiency.9: Trang to Malacca Corridor Development Level From To Trang Kantang Kantang Penang Penang Malacca Overall level Level 3 1 3/4 1 73. however.9 is an analysis of the corridor development level on the Trang to Malacca corridor. a constant flow of passenger traffic between both locations with at least daily ferries. Table 4. Goods from Dumai are mostly vegetables or fishes while goods from Malacca are mostly sugar.15 • Surcharge for loose cargo Malacca to Dumai port Sea 12 Lhokseumawe port N/A 2.46 • General charge 1.2. From a logistics perspective the integration is very limited for freight activities as there are no real major commodity flows between both locations. However. There is a clear lack of information and understanding on both side of the border. There is however. flour and other consumer products.government is constantly helping the Malaysian trucking industry.82 Time (hrs) 6 Distance (km) N/A 6 8 48 68 106 N/A 106 30 .

Figure 4. Figure 4. The cost and time are theoretical as there is no real cargo movement between both ports.6 illustrate both port to port cost and time.5: Malacca to Dumai Cost Model Source: The Author Figure 4.5 and Figure 4. 76.75. Ferries operate from the following Port Klang.6: Malacca to Dumai Time Model Source: The Author 31 . Port Dickson and Malacca in Malaysia. The major activity along this corridor is really the movement of people between Dumai and Malacca.

8 represents the cost and time increase from Aceh to Palembang. Medan to Aceh. Currently there is just a physical sea linkage between both ports. 32 .4 Aceh-Medan-Dumai-Jambi-Palembang corridor 78. This corridor is characterised by the poor conditions of the roads in certain areas and is in need of rehabilitation and upgrading.7 and Figure 4.2.11: Malacca to Dumai Corridor Development Level From To Malacca Dumai Overall level Level 1 1 4. They stated that traffic moved on shorter distances.977 80. There are no vertical steps in the graphical models as it is assumed that the trucks have 2 drivers for the journey. Figure 4. Table 4. The points in the graphs are there to illustrate the location of the main cities in the Aceh to Palembang corridor.77. this does not mean that there is actually freight moving between Bandah Aceh and Palembang.12: Cost and Time Data between Aceh and Palembang From To Mode Cost Time (hrs) (US$)/ton Aceh Medan Road 53 12 Medan Dumai Road 56 11 Dumai Jambi Road 41 9 Jambi Palembang Road 30 8 TOTAL 180 40 Source: Compiled from Industry Distance (km) 627 595 438 317 1. Most of the imported goods from foreign countries transit via the port of Belawan as ports in Aceh have limited capability for containerised freight. Medan is the main trading hub for the north Sumatra region. There is no scheduled shipping line and the port of Malacca is not adequately equipped to handle with containers. There is a plan to build a new highway between Aceh and Medan in 2009. Dumai to Pekan Baru which is the provincial capital of Riau province. 81. Table 4. In reality it may take longer than the 40 hour transit time between both locations. 79. Freight flows are concentrated between Bandah Aceh and Medan. These service providers were also the first to explain that there are no traffic flow between Aceh and Palembang. However. A journey of 2 days (48 hours) would be within the capability of one driver.11 is an analysis of the corridor development level between Malacca and Dumai. The cost and time obtained were based on quotes provided by local freight forwarders. These forwarders acknowledged that cost and time may vary depending on the commodity carried as well as the volume. Table 4. The Bandah Aceh to Palembang corridor is the only domestic corridor in the IMT-GT.

13 is an analysis of the corridor development level between Bandah Aceh and Palembang. The development 33 . There is no railway connection and the road infrastructure in certain sections is lacking.7: Aceh to Palembang Cost Model Source: The Author Figure 4. there is no issue related to import and export regulations. Currently there is just a road link within this corridor.8: Aceh to Palembang Time Model Source: The Author 82.Figure 4. However. since this is a domestic corridor. Table 4.

However. The maritime links are not yet settled as Sabang port north of Aceh is positioning itself as a key transhipment hub with the support of Dublin port. it is preferable to consider the port of Lhokseumawe instead.5 26 8 48 4 96. It means that there is physical linkage within the corridor as well as a common institutional framework that regulates the movement of freight.14: Cost and Time Data between Ranong and Aceh Location/Activity Transport Cost Mode ($/ton) Ranong to Phuket (via Takaopa-KaolakRoad 16 Tublom-Kokegloy) Phuket Port Charges N/A 2 Phuket export customs N/A 1.14 hereunder. The figures are based on estimates provided by the industry.35 Total 58. Theoretically it is possible for vessels to provide services between Phuket and Sabang port but since Sabang port is currently being earmarked as a deep sea port with investment coming in from Dublin port. The port of Lhokseumawe is more geared towards regional freight. Currently there are no cargo movement linking Ranong province in Thailand to Aceh in Sumatra via Phuket.23 Source: compiled from industry Time (hrs) 4 6 0. there is interest from the private sector to provide some maritime connections between Phuket and Aceh based on barges/lighters.5 Distance (km) 280 N/A N/A 315 205 800 34 .13: Aceh to Palembang Corridor Development Level From To Banda Aceh Medan Medan Dumai Dumai Jambi Jambi Palembang Overall level Level 3 3 3 3 3 4. The current logistics cost and time details from Ranong to Phuket have been estimated in the table 4.83 Phuket to Aceh Province (Lhokseumawe) Sea 14 Lhokseumawe port 2. Trucking operators providing services between Ranong and Phuket are scarce as commodity flows between both provinces are limited. 84. Table 4.5 Ranong-Phuket-Aceh corridor 83.level of the corridor is therefore higher than that of the other international corridors but this does not mean that this is the most advanced or developed corridor.2. Table 4. This corridor is the latest economic corridor identified within the IMT-GT.42 • Unloading/Loading 4.63 • Import processing fee Lhokseumawe port to Banda Aceh Road 17.

85. Figure 4.9: Ranong to Bandah Aceh Cost Model Source: The Author Figure 4. Figure 4.10: Ranong to Bandah Aceh Time Model Source: The Author 35 .10 are graphical illustrations of the door to door cost and transit time between Ranong and Bandah Aceh.9 and 4.

36 .86. there is no traffic between both ports. the following benchmarking exercise is only preliminary. If there’s sufficient traffic then there might be operators. Table 4. 87. It must be noted that the NSEC logistics study was conducted when the route was physically only 80% complete. It is shown in the figures hereover that border crossing is still one of the main bottlenecks to the integration of the Ranong to Bandah Aceh corridor. This corridor is only as strong as its weakest link and its weakest link is the maritime leg. Even if there is a physical sea link between Phuket and Lhokseumawe. The snapshot model as well as the corridor development level assessment was also applied and thus can be used for comparison with the various IMT-GT corridors in terms of physical transportation activities versus the non direct transport activity (loading/unloading.15: Ranong to Bandah Aceh Corridor Development Level From To Ranong Phuket Phuket Lhokseumawe Lhokseumawe Bandah Aceh Overall level Level 3 1 3 1 88. 90. Table 4. This is not the case at the present moment. 4. A common feature of all the international corridors is that export is easier and less time consuming than import. These comparisons are only indicative as each corridor is subject to different characteristics in terms of time. border crossing and customs clearance) as presented hereunder. The missing link is the maritime link between Phuket and Bandah Aceh. Therefore. Currently there is no traffic between both locations but it is hoped that in the future there will be a link.3 Section Summary: Comparing Trade Logistics Cost & Time 89.15 is an analysis of the corridor development level between Ranong and Bandah Aceh. The transit time for the NSEC is more than 70 hrs for the 1. The North South Economic Corridor logistics development study in 2007 and the EWEC logistics benchmarking study in 2008 by ADB used a similar methodology to investigate corridor logistics activities in terms of time and cost. cost and distance.800 km long journey.

It is important for the IMT-GT to have increased and enhanced cooperation. This is particularly true at border crossings when delays are the norms.16: NSEC/EWEC/IMT-GT Cost Comparison Route Physical Transportation 42% NSEC: R3W 40% NSEC: R3E Road 32% River 15% NSEC: Mekong River 56% EWEC: Danang-Tak 67% IMT-GT: Hat Yai-Medan 74% IMT-GT: Trang-Malacca 57% IMT-GT: Malacca-Dumai 100% IMT-GT: Aceh-Palembang 82% IMT-GT: Ranong-Aceh Source: The Author Table 4. Comparatively speaking this means that formalities and other fees are less than in the other non IMT-GT corridors. From the benchmark tables. administrative and customs formalities. 37 . 92. The case of the AcehPalembang corridor is somewhat of an outlier as it is the only domestic corridor that is within the scope of the study. 93.Table 4. In terms of direct transport time. Trade and transport facilitation can play a role in supporting economic growth within the sub-region. it is important for all member countries to gain benefits from logistics integration and facilitation and not the other way around. It must not be forgotten that one of the main characteristics of the IMT-GT corridors are that short sea shipping is also involved. A lot more time is taken during loading/unloading. the IMT-GT corridors do not seem to be as efficient. However. preliminary investigation indicates that direct transport cost ratio in the IMT-GT are somewhat higher than the NSEC and the EWEC.17: NSEC/EWEC/IMT-GT Time Comparison Route Physical Transportation 80% NSEC: R3W 85% NSEC: R3E Road 32% River 54% NSEC: Mekong River 57% EWEC: Danang-Tak 25% IMT-GT: Hat Yai-Medan 51% IMT-GT: Trang-Malacca 8% IMT-GT: Malacca-Dumai 100% IMT-GT: Aceh-Palembang 35% IMT-GT: Ranong-Aceh Source: The Author Non transport activity 58% 60% 53% 44% 33% 26% 43% 0% 18% Non transport activity 20% 15% 14% 43% 75% 49% 92% 0% 65% 91.

border. transport operating license. 99. regional and international trade. Direct linkage between southern Thailand and Sumatra are non-existent or has to be done via Penang or Port Klang in Malaysia. The linkages between Southern Thailand and North Malaysia is quite well developed and the various corridors that links both countries can be considered as a level 3 corridor. 97. This can be carried out by abolishing transportation quota between Thailand and Malaysia. From a logistics development perspective the challenge will be on how to increase the logistics integration of Sumatra within the existing integrated logistics linkages between Thailand and Malaysia. almost ready to be a level 4 corridor with the various industrial development projects that are currently being put into place. and eliminating required upload and download practices at the cross-border areas. 95. The linkages between Sumatra and the other IMT-GT areas also need to be accelerated in order to gain the benefits from such as growth triangle. It is acknowledged that having an efficient logistics system in the IMT-GT subregion can help support the existing corridors’ economic integration. 96. particularly on perishable goods. in particular those issues related to the current existing institutional framework. The specificity of “barter trade” in Penang for trade with Myanmar or Sumatra is a good illustration. 38 . This does not mean that there is no logistics linkage it only means that the type of logistics services available is a reflection of the type of trade between Malaysia and Sumatra. vehicle inspection certificates as well as vehicle insurance across the border. Penang and Port Klang can play a crucial role in becoming the logistics platform for the IMT-GT region with its strong connection with southern Thailand and North Sumatra. Logistics is a relatively new development policy in the IMT-GT. 98. Transport Rules and Regulations should be relaxed in order to promote efficient cross-border logistics and transportation. On the other hand the corridors linking Malaysia and Sumatra are more on the traditional or “archaic” side as there seems to be only a level 2 corridor linking these 2 areas. However there are still some specific issues that need to be resolved. through mutual recognition of road vehicle registration. The overall impression from empirical evidence is that there are 2 distinct level of logistics integration in the IMT-GT. It is important not to forget that logistics is a derived demand that supports local. especially between Thailand and Malaysia as there are already numerous projects in place. Infrastructure rehabilitation within Sumatra is still an important component of improved logistics in Sumatra. Infrastructure is not considered as a major issue. Conclusions and Recommendations 94. This can only be done if intra IMT-GT trade is supported and facilitated.5.

Table 5. Activities within the IMT-GT should foster on closer public and private collaboration as well as advancing the role of provincial and state governments. This is because of the different level of integration between IMT-GT countries. They should have more opportunities to jointly look into the possibility of translating project ideas into real business projects. This enhanced integration and cooperation is important for trade between Sumatra and Malaysia but even more for trade between Sumatra and Southern Thailand. In fact. Maybe it is also a question of capacity building from governmental officials’ perspective. Special measures to facilitate border trade such as bilateral payment arrangement scheme should be intensively promoted as many local traders are relying upon less formalised means of payment. The IMT-GT Joint Business Council (JBC) must increasingly play the important role of business creator in the IMT-GT areas. From the corridor analysis. More intra-regional investment should also be emphasized especially at the SME level. most local SMEs have limited funding to attend all the related IMT-GT events and this reduces their trading opportunities with other IMT-GT partners. there is a feeling that Thailand and Malaysia gains much more than Sumatra from the IMT-GT. Provincial governors should not solely focus on provincial issues but must be able to have the vision of linking their provinces within the IMT-GT Sub-region. 103. The meeting mechanism between the public sector and the JBC should be revised to some extent in order to bring them together in the same forum. especially the various border areas should be explored. There is great potential for trade and investment but the flows are minimal and need to transit via Malaysia. 102. They need more support in order to better understand how to implement the various IMT-GT agreements. 105. Coordination and support among provincial and central agencies in the IMT-GT is critical as there are still “gaps” in the understanding and the implementation of related IMT-GT agreements.1 shows the relationship between the proposed support policies and the key IMT-GT logistics issues discovered during the study. The provision of reinforcing border trade as a mean to accelerate logistics integration in the IMT-GT. More business dialogues must be more held and business matching should be given high priority at all levels of meetings. However. The six working groups should welcome more participation of the private sector in their meetings.100. Each proposed policy measure is based on specific findings and issues discovered in the IMT-GT logistics development study. there should be more institutional support for the enhanced integration of Sumatra into the IMT-GT. 39 . 101. 104.

transit and transport services to create an effective and efficient integrated logistics system within the IMTGT itself. The purpose of any logistics system is to be able to satisfy customers while controlling or even lowering all the costs involved. especially between Sumatra and the rest of the subregion is currently hindering the development of the IMT-GT logistic system. The lack of standardised and harmonised border and transit trade procedures in the IMTGT as well as weak infrastructure linkages. Most of the problems involved in the development of logistics system for cross-border and transit trade are mostly related to the import/export processes of countries in the IMT-GT. 108. 40 . 109.Table 5. This is not the case yet for the IMT-GT 107.1: Proposed support policies relationship with IMT-GT logistics development issues IMT-GT logistics Proposed Projects issues Trade & Transport • Pilot implementation of trade and transport facilitation measures Facilitation between Hat Yai and Medan • Expansion of bilateral exchange of traffic rights arrangements between Thailand and Malaysia • Promotion of inter-provincial & district cooperation and coordination mechanisms (logistics facilitation) • Establishment of mechanisms to improve coordination between and among central. An integrated approach is needed in order to solve these problems. Infrastructure linkages are the backbone of logistics development in the IMT-GT but this upgrade in infrastructure must be done in conjunction with the facilitation of trade. especially in Sumatra but the impact may seem less important due to the relatively low volumes involved as well as a commitment by member countries to physically and institutionally link the corridor within the year 2015. provincial and border area officials Infrastructure • Improving road connections within Sumatra Development Infrastructure • Provision of maintenance funds roads in Sumatra Maintenance Capacity Building • Developing logistics capacity in the IMT-GT for public and private sector Further • Study on the establishment of IMT-GT logistics platforms/centres Development within the IMT-GT Studies • Study on the establishment of IMT-GT logistics standard information system 106. This integrated approach should combine solutions to the ‘hardware’ infrastructure aspect with the solutions to the ‘software’ rules and regulation aspect. Infrastructure is considered a constraint. This reality may be true for now but in the near future with the full implementation of the ASEAN Economic Community the situation may change and the emergence and implementation of logistics and economic corridors should be in place soon.

41 . Infrastructure is as critical in the facilitation of the movement of goods and people across borders as the harmonisation of border trade rules.110. 111. However the challenge remains on how to transform these future logistics corridors into fully fledged economic corridors that can attract investment and generate economic activities in remote area of the corridor such as border crossings and certain remote areas located far from the sub-regional economic hubs. There is a very strong potential for expansion trade after this sub-regional economic integration efforts are in place and this will probably reduce the need for contraband or informal trade as tariffs and non-tariffs barriers will be eliminated in the IMT-GT.

e. i. 42 . The high density of truck traffic is another factor contributing to the low average speed as there is very little opportunity to pass trucks in some sections. 8 ADB Road Rehabilitation-II Project. The current level of increase in traffic in Sumatra is running at approximately 5% . Malaysia. 2007). Parking alongside the road is common practice resulting in traffic jams and a general barrier to traffic flow.7% per annum. 2007) 7 AADT is measured on a yearly basis by the Directorate of Spatial Planning. The volume of traffic also varies along the road. The other factor is that most of the traffic has to pass through the town centres.1.534-9.033-1.000 8.000-9. As there is no enforcement of axle load limits the problem of overloaded trucks will persist and even if the road is improved. The damage to the road in several sections has been as a result of considerably overloaded trucks that are exceeding the legal axle load limits. The annual average daily traffic (AADT)7 of various points of the highway is summarised in table 4. there is no bypass. August 2005. Riau Province Medan Outskirts-towards Binjai Langsa to Banda Aceh Source: ADB (2007) 6 Annual Average Daily Traffic (2006) 1. Riau Province Pekanbaru and Dumai. The average speed has been estimated at around 50 km/h (ADB. Table 1: Indonesia Road Statistics Road Section Jambi and Murlung-South of Sumatra Rengat. however. that traffic volumes gradually increase as one travels from the south of Sumatra to the north of Sumatra.791 7.901 21. It is apparent from the traffic volumes provided by the Directorate of Spatial Planning.796 5.Annex A: Logistics Infrastructure characteristics of the IMTGT6 INDONESIA Roads Road infrastructure is the dominant mode of transport on the Island of Sumatra. many roads on the island are in a poor state has they have been damaged by freight trucks. Thailand Growth Triangle Economic Connectivity Corridors (ADB. This causes considerable congestion in town centres. especially with truck traffic. damage to it will continue.000 Adapted from: Expanding Horizons-A Study on the Development of the Indonesia.8 With this increasing growth the existing roads will come under more pressure in terms of capacity and damage from the volume of trucks.

no general cargo. Roads are basically not wide enough to accommodate the increasing demand on them. 2000 m2 of secure open storage. Thus budgetary planning for road maintenance is not sufficient for the actual maintenance needs when the roads deteriorate. the length of road in South Sumatra Province was 2. Basically the main transport problem for products of Sumatra is transport from the point of production to the ports of Belawan. The condition of roads is generally poor. namely Medan. Boom Baru (Palembang). The higher freight rates are also probably caused by the poor condition of many of the roads.htm 43 . which caused heavy damage to roads and exacerbates the already poor road conditions. and Banda Aceh. Available facilities include two fork lift trucks. This port is not able to provide 24 hour service and is classified as a third class seaport.5 USD per TEU/km on average.bizhosting. Ports The ports located in Sumatra along the economic corridor from Banda Aceh to Palembang are located near Lhokseumawe (Aceh). However. Dumai. The system loading rate is 400 MT/hour AAF Berth B is used for the loading and unloading of general cargo. which raises costs of transport both for inputs and for output.68 percent under state responsibility and 58. Lhokseumawe port (Aceh) Lhokseumawe is currently one of the two most important ports in Aceh province9. An improvement in road transport will enable larger volumes to be moved to the ports in Sumatra. Part of the reason for the poor condition of roads is overweight freight vehicles. 10 Adapted from http://indonesian. Pilotage is compulsory with the request for pilot needed at least 6 hours for arrival and 3 hours for departure. and Banda Aceh. although economically they should be lower as trip distances are longer. dedicated to the loading of urea fertilizer in bulk through the use of one conveyor belt.997.Unit freight rates are relatively high in Sumatra at around 2.32 percent under government provincial responsibility.87 kilometres where 41. The port has 4 main wharves10: Asean Aceh Fertilizer (AAF) Berth A. Road transport also takes twice as long because of difficulties encountered in overtaking trucks on several sections of road due to their slow progress with excessive loads.com/Lhokseu. the port cannot handle containers. The loading rate is 35 MT/Gang 9 Blang Lancang is the 2nd major port but only handles gas and fertilizers. Water depth is between 9 to 10 metres. Belawan (Medan). There are also other factors which must be considered in terms of the road network in Sumatra: (i) maintenance of existing infrastructure and (ii) enforcement of traffic regulations. Dumai. for export to the rest of the subregion. Dumai (Riau). In 2006.

The depth of the channel to the port at low water restricts mother vessels from entering the port and causes ships to be delayed until high tide. Malaysia Belawan Singapore Belawan Surabaya. Taiwan Belawan KwanYang. East Java Source: Indonesia Shipping Gazette (2007) Frequency weekly weekly Twice a week Weekly Weekly Twice a week weekly weekly 4 times a week daily Transit time (days) 17 11 3 10 15 7/9 1 1 2/3 4 11 Adapted from www.org/sumatra/BPS2005StatisticalReview-English.Pupuk Iskandar Muda (PIM) Wharf dedicated to Urea fertilizer in bulk. namely. Philippines Belawan Penang. The container port is a newly acquired area.2% and 1. These would considerably increase the speed and efficiency of the container port. Table 2: Belawan port shipping links From To Belawan Busan. South Korea Belawan Jakarta. and a passenger terminal. Table 4. At the end of 200511. The wharf for berthing ships in the conventional port area varies in depth at various points along the wharf. This is the main general port in Sumatra.humanitarianinfo. a container handling area. including 4 gantry cranes is becoming outdated and is slow compared to modern equipment. Similar to AAF Berth A Public Harbour that is used to load and unload general cargo with similar capability as AAF Berth B. South Korea Belawan Manila. South Korea Belawan Incheon.2 present a summary of destinations served from Belawan port. Malaysia Belawan Port Klang. after Tanjung Priok Port of Jakarta. Straddle carriers for handling containers are not available. Another effect that the rapid increase in the number of TEUs that are being handled is that there is now insufficient time to maintain some of the equipment since more time is being devoted to offloading and on-loading TEUs. the conventional port. Belawan Port (Medan) Belawan is the main port in North Sumatra. Also. The equipment of the container port. and the second largest general port in Indonesia. Goods destined for both IMT-GT countries were fertilizers and inorganic chemicals. the container yard needs to be expanded by about 2 hectares to cope with the rapid increase in the volume of twenty foot equivalent units (TEU) being handled. The port is divided into several areas. Thailand and Malaysia only represented 1. Containers in the yard have to be stacked 5 containers high due to overcapacity of the container facilities. the main destination for export from the port of Lhokseumawe is Japan at 62% and Korea at 33%. there are two container freight stations which need to be demolished to expand the size of the area for storing containers. near Medan. According to port officials.6% respectively. Indonesia Belawan Keelung.pdf 44 .

672 ton unloaded. 45 . The role of inland waterways transport is relatively minor and is limited to certain areas of Eastern Sumatra and Kalimantan. and the average freight haul is presently around 200 km.614 to 2.476 tons loaded and 2. North Sumatra Railway The north Sumatra railway stretches 1.424 units. Table 3: Palembang port shipping links From To Palembang Jakarta Palembang Singapore Source: Indonesia Shipping Gazette (2007) Frequency Thrice weekly weekly Transit time (days) 2 2 Railways The Sumatra railway systems are located in north. Sumatra system to serve the post-independence plantation areas.147. the river port of Palembang. It is the main exporting point for petroleum and crude palm oil produced from the central Sumatra hinterland. the volume of good loaded at the port was 2.052 km. is the load centre for both domestic and international cargo and passenger only for domestic in South Sumatra.114. The north Sumatra system was built by the Dutch to provide transport for plantations and connects those areas with the harbour in Belawan. with a spur to the Belawan Port. The south Sumatra system now also connects to the port of Bandar Lampung. The average length of passenger journey in N. There are reported to be plans to extend the N. and south Sumatra. through Binjai and Tebing Tinggi in the centre. west. A circle route connects from Binjai through Medan to Tebing Tinggi.911.266 in 2006 while domestic ship calling decreased from 2. The number of ships calling at Boom Baru in 2005 for international was 990 vessels and the numbers of calls increased to 1. In 2006. Boom Baru (Palembang) Boom Baru. Port Dickson and Malacca as well as other Indonesian cities like Bengkalis and Batam. from Besifang. near the Aceh border in the north. For domestic shipping it was 3.216 tons and unloaded was 426. Sumatra was 140 km.Dumai (Riau) Dumai is the main port city in Riau province on the Indonesian island of Sumatra. It is a major ferry port with connections to the Malaysian cities of Port Klang. terminating at Rantau Prapat. The west Sumatra and south Sumatra systems were also built by the Dutch to link coal mines with ocean ports.298 tons for international shipping. There is also a spur from Binjai to Pangkalan Susu (which is currently out of service) and other from Tebing Tinggi to Siantar in the interior.

One of the high priority routes from the plan is the stretch from Banda Aceh to Rantau Prapat. This is very similar to the Sumatra Spatial Plan. Overall the Banda Aceh – Medan – Dumai – Pekanbaru – Murao rail sections would also form part of the full trans-Sumatra railway. A rail line from Rantau Prapat to Duri line will extend the N Sumatra system to Murao and on to Dumai and would carry crude palm oil (CPO) into the port of Dumai. 46 . Due to lack of implementation and the changed circumstances.ADB undertook a Sumatra Railway Master plan in 2000. there is need for a study to update the previous plan.

Northport is not totally dependent on transhipment for growth and Northport’s transhipment is also Asia centric where 63% of its total container throughput represents both local import and export cargoes. the US crisis is not likely to affect much the activities of major ports in Malaysia. surpassing its target of 2.31 million TEUs achieved last year. it is possible that the weakening US economy may decrease transhipment traffic on a selected basis or trade routes. Malaysian major ports have successfully surpassed their volume targets. which were 18% higher than 2006 volume. Another major port in Port Klang. including the prospects at south point. The total distance from Bukit Kayu Hitam to Johor Baru. and (ii) the North-South Expressway (NSE) which is a controlled access. dual-carriageway highway from Bukit Kayu Hitam to Singapore. Given the fact that the bulk of businesses of local ports are regional-based and well supported by promising prospects from other countries. According to Basheer.8 million TEUs.31 million TEUs. The port have identified new growth drivers. 64% was from transhipment containers. Westport (M) Sdn Bhd. Ports: Trends for Malaysian ports12 Major container ports in Malaysia are projecting healthy and sustainable growth for the year 2008 despite a weakening US economy. Of the 4. Last year.04 million TEUs (twenty-foot equivalent units). on the border with Singapore.MALAYSIA Roads The road network in the Malaysian portion of the IMT-GT subregion is well developed. Managing director and chief executive officer Datuk Basheer Hassan Abdul Kader told the Star Maritime newspaper that the port was eyeing a moderate growth in the volume of containers handled this year. There are two major north-south links. a major conventional cargo hub in the country and services offered at Northport distripark. 2008 47 . registering a total of 14. Fortunately. The road from Penang to the Thailand border at Sadao is also a dual-carriageway highway in very good condition with a speed limit of 110 km/h. Executive chairman Tan 12 Adapted from The Star Maritime February 12. Datuk Basheer Hassan Abdul Kader Northport (M) Bhd in Port Klang recorded 2. He believed that the growth will be driven by the port’s matured cargo base and the prognosis of a stable economic growth. Basheer expects the non-containerised trades at the port to continue registering positive growth. which is mainly a single carriageway highway. is expecting to hit five million TEUs by year-end against 4.81 million TEUs last year. namely (i) Federal Route 1. is 890 km. He expects the company's overall growth and the performance of other types of cargo to remain strong.

48 . places Penang Port within easy reach of all major economic regions in the country. The drive will come from main line customers that use Westport as their transhipment hub. It serves one of the busiest trade routes in the region and links Malaysia to more than 200 ports worldwide. the North Channel and the South Channel. it is a choice port of call for traders within the IMT-GT and the Asia-Pacific region. To expand the port further. aims to handle over one million TEUs this year against 925. Of the total traffic in Penang port. 15 to 20% is from Thailand.Sri G. The North-South Highway. Westport also hoped to grow the import and export volumes of its local boxes to 1. spanning the west coast of Peninsular Malaysia from the MalaysiaThailand border to the Malaysia-Singapore border. Penang Port Sdn Bhd. Penang Port is accessible via two channels. meanwhile. Gnanalingam described that container business would continue to be the key revenue driver in 2008.5 million TEUs this year. land reclamation of around 25 hectares is presently being undertaken. Last year's volume was 9% more than throughput achieved in 2006. Penang Port is also linked directly with the east coast of Peninsular Malaysia via the East-West Highway There are plans to expand the Penang port over the next 5 years (under the Ninth Development Plan) by acquiring more equipment. This was achievable through increased operational effectiveness from extra equipment and infrastructures as well as a strategic focus for growth in the Intra-Asia and regional market. North Butterworth container terminal strategic business unit general manager Obaid Mansor said growth this year would depend on the expansion in existing markets and the conversion of noncontainerised cargo to containerised cargo.991 TEUs last year. and increasing the number of berths (estimated expenditure of MYR1 billion). The growth of conventional cargo is assumed to be stable. dredging. Westport is confident of meeting its volume target this year despite the weakening economy. Being a deepwater port and overlooking major shipping lanes in the Straits of Malacca. Penang Port Penang Port is strategically located along the Northwest coast of Peninsula Malaysia. especially with dry bulk and liquid bulk cargo.

Table 3: Penang Port Facilities Storage Facilities Penang Port North Channel South Channel Butterworth Wharves There are 3 transit sheds with a total area of 9,615 sq m and 1 godown with an area of 1,672 sq m. Vegetable Oil Tanker 98 private tanks with total Pier (VOTP) capacity of 122,200 tons 10 godowns (55,000 sq.m.) 2 buffer godowns (11, 148 sq m) 5 private godowns (33 996 sq m) Stockpile area (4.7 hectares) North Butterworth Berth Capacity (660 TEUs Container Terminal per annum) Container Yard (4,400 TEU ground slots) Butterworth Wharf Container Yard (1,500 TEU Container Terminal ground slots 2 Container Freight Stations (11892 sq m) Container Freight Station (11,892 sq m) Source: Port authorities and http//:www.penangport.my Prai Bulk Cargo Terminal (PBCT)

Dimensions for Berthing 10.7 m deep 5.8 m or less Comprises 4 berths Approach Channel Depth (ACD) depth of 9 m Overall wharf length=715 m 1 dolphin berth ACD depth of 9 m 2nd VOTP (W2) has ACD of 10 m 3 berths totalling with 11 m ACD depth 1 inner berth is 7.5 m deep 1 dolphin berth for dangerous cargo vessels with 11 m depth

3 berths ACD of 12 meters

2 berths ACD of 9 m

Container traffic is handled at the Butterworth Container Terminal (BWCT) and North Butterworth Container Terminal (NBCT). At present, a portion of Penang Port’s containerised cargo handling activities is conducted at BWCT, which has two berths at the Butterworth Wharves. Future plans for BWCT involve the consolidation of all container handling activities at the NBCT. The consolidation is expected to improve container handling activities and provide more berths for conventional cargo handling. NBCT is to be expanded with an estimated cost of MYR300 million. By completion of the NBCT Phase 2B Project the port will be able to handle 1 million TEUs. Penang Port Limited Company (PPSB) will continue to complete various components of the NBCT Phase 2B Project within the next two years. This also involves the reclamation of 25 hectares of land for the container yard and purchasing handling equipment which will cost about RM150 million. Reclamation works at the port commenced in February 2006. The wharves will be expanded by another 600 meters to accommodate 7 vessels at any one time. The depth at the port will also be increased by dredging to 13 m from the current depth of 12 m. PPSB is also planning a new back stacking area for export containers only and new

49

equipment including cranes. With these new enhancements, port productivity will be increased and it is estimated that approximately 35 TEUs will be able to be moved per hour. The conventional cargo handled in Penang Port comprises of break-bulk, dry bulk and liquid bulk. Installations dedicated to this activity are Butterworth Wharves, Vegetable Oil Tanker Pier (VOTP), and Prai Bulk Cargo Terminal (PBCT). PBCT has been designated as the main terminal for “barter trade” with Myanmar and Sumatra. Currently there is a twice weekly service between Penang and Belawan. This service is operated by Medan based entrepreneurs with wooden boats of less than 500 GRT. Conventional cargo handling efficiency has been improved with the application of a computerized cargo and marine system catering for berth planning, equipment scheduling, godown management, and billing functions. The Butterworth Wharves, at present, comprise four berths for handling a variety of break-bulk cargo such as palm oil in drums, refined sugar, bag rice, iron and steel products, and manufactured goods. Once container handling activities are consolidated at the NBCT, Penang Port will have an additional two berths at the Butterworth Wharves to cater for break-bulk cargo. Located south of the Butterworth Wharves is the Vegetable Oil Tanker Pier (VOTP). The VOTP is dedicated to meet the specialized requirements of vegetable oil handling. The VOTP is linked via overhead pipelines to facilitate direct loading and discharging of edible oils to privately-owned storage tank farms. Prai Bulk Cargo Terminal (PBCT) provides dedicated facilities for handling dry bulk, non-edible liquid bulk and dangerous liquid bulk cargo. The variety of cargo handled at PBCT includes grains, soybeans and raw sugar. Liquid bulk, such as Liquefied Petroleum Gas (LPG) and Vinyl Chloride Monomer (VCM), are conveyed via pipelines to private onshore installations beyond the terminals boundaries. Due to the nature of the cargo handled at PBCT, Penang Port ensures that international safety standards are applied strictly. In addition, state-of-the-art fire fighting/rescue/safety equipment is provided in adequate quantity. Westport, Port Klang 13 The Container Terminal - The main focus of operations at this port is container traffic. Container traffic at Westport increased by 600,000 TEUs from 3.7 millions TEUs in 2006 to 4.3 million TEUS in 2007.14 Projections for 2008 indicate that the magical mark of 5 million TEUs will be achieved.15 Port capacity is 6 million TEUs per annum. It has four container terminals. CT1 is spread over an area of 40 acres whilst CT2, 3 and 4 are 60 acres each. The port has 9 berths, totalling 2,600 metres. Standard equipment at this port include 26 Super Post Panamax Quay Cranes (6 of which are Twin Lift), 2 Mobile Harbour Cranes, 8 Reach Stackers, 11 Empty Stackers, 69 Rubber Tyre Gantry Cranes (RTGs), 208 Prime Movers, 237 Trailers and 12 Forklifts. Special features at this port include a 15 metres berth depth, thus enabling the port to
13 14
The source of information for Westport is the port’s website which can be accessed at the following: <http://www.Westportmalaysia.com/about_us/abtus_fact_figure.html> (Accessed on 20 January 2008). See the remarks of Tan Sri Dato’ G. Gnanalingam, the Executive Chairman of Westport, Klang at <http://www.Westportmalaysia.com/about_us/abtus_chairman_remark.html>, Website of Westport, Klang (Accessed on 20 January 2008). Ibid.

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accommodate 6th generation container vessels. Operational features are up to ‘Fastport’ standards with the port being able to achieve 35 moves per hour (mph) per crane, 100 mph on a main line vessel and 50 mph on feeder vessels.16 ‘Fastport’ standards are achievable because of the use of the ‘Container System’ from COSMOS, Belgium; an information technology system not only allows for real-time processing but also ensures automated tracking and assignment of equipment and manpower.17 The system compromises a container yard management system,18 vessel planning system,19 transporter flow control system,20 berth allocation system,21 container control terminal system,22 electronic data interchange23 and container freight station system (CFS).24 Conventional Port operations - Westport is also equipped to handle conventional port operations. It has a Liquid bulk Terminal, Dry Bulk Terminals and a Break Bulk Terminal. Westport is the first port in Malaysia to have a fully computerized and automated conventional terminal, its New Generation Conventional Cargo System (NGCCS).25 NGCCS is completely developed in-house and covers the full automation of all non-containerised cargo, right from wharf operations to billing. The system ensures speedier and more efficient control of vessel, cargo and warehouse
16

As a comparison, ‘Fastport’ standards for are follows for other types of cargo: break bulk (300 tons), liquid bulk (600 tons) and dry bulk (800 tons), see Tan Sri Dato’ G. Gnanalingam, the Executive Chairman of Westport, Klang at the following website: <http://www.hrdnet.com.my/conference07/speaker_notes/dato_g_gnanalingam.pdf> (Accessed on 20 January 2008). All the information on this system was obtained from the website of Westport, Klang, ‘Technology’ : <http://www.Westportmalaysia.com/technology.html> (Accessed on 20 January 2008). The system optimises the use of container yard space. ‘Automatic planning’ calculates a free location according to container characteristics and the corresponding planning parameters. ‘Yard definition’ is a graphic user interface assists the definition of the yard. This is a fully automatic planning system for container vessel, coasters and barges which minimizes the number of shifting moves in the yard. ‘Bayplan overview’ is a graphical user interface that facilitates defining the structure of the vessel. There is also ‘automatic planning’ which provides appropriate planning algorithms are available to support different cranes move, double cycling, etc. ‘Work scenario’ Determines how the terminal operator will discharge and load the container vessel. By using a graphical representation of the bay, ‘prestow information’ can be assigned to a specific slot or several range of slots. Fully automatic transporter flow control module for RTG, front loader, and tug chassis combinations. Allows planners to make effective berth allocation and gantry crane assignment so that freight congestion can be restrained. Consist of vessel management, order management, gate control, container logistics and reporting. Automatic system-to-system exchange of information. Also supports messages that are UN/EDIFACT complaint. Facilitates the packing and unpacking of containers goods. It has 200,000 square feet of covered area, 30,000 square feet of open yard and a 100,000 square feet staging area. It is equipped with 3 Reach Stackers, 10 Prime Movers/ Trailers (40 ft) and operates, 24/7, 365 days a year. The area is adjacent to rail siding and is well lit. Within 24 hours of request, there can be container positioning. ‘On Dock Depot Empty Positioning’ is available at no additional cost. Reefer stuffing / unstuffing facilities are also available. For dangerous cargo, there are specially designated areas. All the information on this system was obtained from the website of Westport, Klang, ‘Technology’ : <http://www.Westportmalaysia.com/technology.html> (Accessed on 20 January 2008).

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It generally covers the entire range of commercial charges according to the tariff. Bunker fuel meets the international standard of ISO 8217. The port is equipped with 2 grab unloaders. The system was built with expert system capabilities whereby. It provides accurate on-the-spot information of vehicle's status to customer. The Break Bulk Terminal – This consists of 5 berths. The Liquid Bulk Terminal .30 bunkering facilities. The information technology system consists of conventional wharf operation. enabling the port to handle steel and general cargo. forklift and tractor for loading / discharging. Miscellaneous infrastructure – Includes a vehicle transit centre. 26 ‘Direct and Indirect Gate pass’ authorises the consignee to take cargo out from the port. ‘Daily Vessel Schedule’ gives a detailed picture of all current and future vessel activities. Tug Charges. The ‘confirmation / postponement / cancellation of vessels’ system caters for unconfirmed ETA details.000 tonnes by the third year of operations.000 and 1. with the capacity for 100. ‘Equipment And Gang Booking’ lists requirement of various resource like gang. fertilizer and cement. slag. In line with providing our customers with accurate and fast billing information. It has the ability to handle 90 different types of liquid bulk cargo. ‘Ship service voucher’ provides automatic calculation of charges for all services rendered. the conventional Billing System is directly linked with the Financial Management System. The ‘berth allocation system’ schedules ships into berths in such a way as to reduce average waiting time and increase berth utilisation. Ship Service Voucher and other relevant Conventional Charges. To facilitate bunkering. Malaysia’s most advanced.The port also has two dry bulk terminals. it can select the appropriate tariffs without human intervention. which is the latest in computerisation technology to process cars. there are two barges with a capacity of 3. totalling 1000 metres.26 conveyor belt system. Klang’s website on available bunkering 27 28 29 30 31 52 . The Dry Bulk Terminals . with a berth length totalling 1365 metres.27 cargo storage system. 1 Continuous Ship Unloader.management for the benefit of its customers. grains. Details are extracted in order to raise charges for Wharfage. Shift performance of loading/discharging activities based on ship outrun. 1 grab discharger (affectionately known as ‘T-Rex’) and 10 000 meters of conveyer belt. The barges supply three types of bunker products namely 380cst fuel oil.It has 4 main jetties and 1 bunkering jetty. Stevedoring. smart car terminal. Monitors movement of cargo on belt and automatically weighs it. with 4 berths that are 935 metres long and 1 cement jetty. ‘Tally sheet’ capture tally sheet details for all direct and indirect deliveries. ‘Storage requirements’ measures the daily available and occupied storage capacity based on automatic calculation for current occupied storage capacity. Mooring. This equipment enables Westport to handle dry such as sugar.000 tonnes each. The ‘conventional billing system’ is the first fully automated system in country.28 Westport control centre29 and weighbridge system. 180cst fuel oil and marine gas oil to customers around the region and we hope to sell 500. ‘Spillage / trimming / excavation’ enables calculation of trimming and excavation charges.000 vehicles. postponement or confirmation of vessels. ‘Inter store transfer note’ monitors movement of cargo from the warehouse / yard / transit shed to the wharf for loading operations. ‘Vessel performance per shift’ effectively shifts performance of loading/discharging activities based on ship outrun. see Westport. with rule based decision support system that enables cancellation. Equipped with ‘Vehicle Logistics System’.31 pilotage services and tug-boats for towage. Berthing/Unberthing.

Gnanalingam.5m high). setting up of a Distripark within the Free Commercial Zone (FCZ)32 and getting connected with a second link highway (Shah Alam Expressway link).Westportmalaysia. 920 sq ft (7 acres).36 E-Submit. which enables for corrections of any discrepancies instantly. E-Submit have a robust data-mapping engine that can be used to map any formats. (Accessed on 20 January 2008). faster turnaround and higher productivity. instead of standardizing and for shipping lines' convenience. Klang has adopted UN/EDIFACT (United Nations Directories for Electronic Data Interchange for Administration.pdf> (Accessed on 20 January 2008).html>. the Executive Chairman of Westport.34 The port's ‘ETerminal’ now consists of Electronic Data Interchange (EDI). and hence a more stream-lined business process. shipping lines can pre-plan their berth allocation with Westport.html> (Accessed on 20 January 2008). Simplifies and eliminates the submission of loading list by automatically creating the loading list with the consensus of shipping lines.41 E-Billing. between organizations.Include housing the Head Office of Selangor’s Royal Malaysian Customs Department. Klang. being the ‘Halal Hub’ for Selangor. Since the beginning.my/conference07/speaker_notes/dato_g_gnanalingam. Commerce and Transport) as the standard for EDI. Enables shipping lines to view the real time and planned vessel-berthing status.com/technology. Klang at the following website: <http://www.33 In addition Westport has an ‘E-Terminal’ system that is comprised of ten systems and services that provide optimum efficiency. 3 units of Omin lifts and 1 cargo lift. All information on the E-Terminal system in this paragraph is obtained from the website of Westport. Due to the disparate formats. far fewer errors.35 E-Berthing. directly from a computer application in one organization to an application in another.000 pallet locations (13.westportsmalaysia. Enables the on-line issuance by shipping lines thus replacing the traditional paper Delivery Order (DO) and information is updated directly into the terminal's back-end system.com/our_services/ourservc_bunkering_descp. Allows for the submission of discharge and loading list electronically via the Internet. the setting up of a Port Klang Free Zone (PKFZ) consisting of distribution hub of 1000 acres. Seamlessly integrated to Custom's Gate Control System (GCS). 000 sq ft and open yard area of 283.40 E-Gate Pass. extensive verifications and validations are done upfront and automatically. thus leading to better efficiency and productive resource allocation. The exchange of documents in standardized electronic form. shrink wrap machines. E-TDR. Westport.42 E-Procure43 and E- services at the following Internet address: <http://www. the 33 34 35 36 37 38 39 40 53 . EDI's saves unnecessary re-capture of data. See Tan Sri Dato’ G. 32 There are two major distribution parks within the FCZ. With the elimination of the submission process. 15 units of LPG / Battery Operated Forklift / Clamps. upon release and clearance from custom and other government agencies. less time wasted on exception-handling. with a total covered area of 470. There are 2.38 E-Loading. playing host to Malaysian International Shipping Corporation’s (MISC) Logistics Centre. vessel planning and yard planning can commence planning well in advance.New developments at Westport . Provides shipping lines with the tool to manage changes to submitted information on-line therefore maintaining integrity and traceability of the changes as well as reducing the time taken for paper based SSR submission. 2 units of sweeper and scrubber machines.37 ESSR. Upon submission. With the transparency of enquiry of berthing. This leads to faster transfer of data.com.39 E-Deliver Order. see <http://www. in an automated manner. and 48 dock levellers.hrdnet.

The entire process from bids to acceptance is conducted over the Internet. comprises container vessel operation data and tabulation of productivity.917 21 106 805 800 36 37.Bidding. West port also plays an important in the linking Sumatra ports with mainline shipping connections. Table 4 provides the container volumes linking West port with Sumatra and Southern Thailand. Electronic enablement of purchasing process. This system conducts bidding over the Internet in accordance with the government procurement procedures. Northport logistics further add value to Northport’s business.040 TOTAL 35. this streamlined and seamless process requires no paper DO. 41 Available for shipping lines to view and download upon vessel departure.my 42 43 44 45 54 .44 These systems and services are mostly developed in-house to offer customers a solution that is based on time efficient.626 16. prepared from timesheets. cost reduction. nor the presence of the forwarding agent at Westport. It has also given the port an electronic business-to-business platform for a speedier and reliable transaction. Port Klang45 Northport is situated at Port Klang in Malaysia. Enables customers to access their invoices.389 2.com. Transit Out 15. it is centralised repository for the computerised collection. and retrieval of TDRs. whereby every step of the process from identification of requirement to payment can be done electronically. organisation. It is designed and innovated in house to cater for the port's customers with the purpose to streamlining and improving the billing services. Besides the quick dissemination of E-TDR. Source: www. in Northport: Southpoint for conventional cargo handling and in Northport itself where state for the art container handling facilities is located. This report.685 terminal release document (E-Gate Pass) will be distributed to the consignee and subsequently to the haulage company for container pickup from the terminal. credit notes. Westport' E-Procure proves to be a solution for improved administration efficiency. payments and statement of accounts anywhere and anytime. Besides saving time. and hassle free-environment.862 Medan 21 Padang 106 Palembang 805 Thailand Hat Yai 10 790 Songkhla 36 TOTAL Source: West Port (2007) North Port. Northport comprises dedicated and modern multipurpose port facilities located at two locations. reduction in costs and greater transparency. Table 4: Container volumes via Westport within the IMT-GT (TEUs) Country Port Name Import Export Transit In Indonesia Belawan 1.northport.

1 Import FCL 6.3 Export FCL 6.1 Import FCL 5.northport.5 1.my 20’ 21 15 33 40/45’ 41 28 63 90 Reefer 58 20’ 17 40/45’ 26 Reefer 26 7 13 13 20’ 0.5 to 15 metres.2 Import Empty 6.6 8 40/45’ 40 40/45’ 110 110 110 110 190 190 40/45’ 68 68 68 68 68 Reefer 1.3 Container sweeping 3.Northport has 3 dedicated container terminals.1 Stuffing of cargo into containers or un-stuffing of cargo into warehouse 5 Full Container Load (FCL)/Empty (US$) 5.2 Import Empty 5.1 Empty storage per day or part thereof 3.6 4.7 2.2 2.7 Export Transhipment 6 Land bridge Containers (US$) 6.1 from Northport to CY and return empty back to Northport or vice versa 1. The landside and container handling operations are or will be supported by 52 rubber-tyre gantry cranes by 2008.6 8 Reefer 42 Reefer Reefer 55 .com. The three terminals offer a combined quay length close to 3 km and a depth alongside of 11. Container Haulage charge (US$) 1.000.4 Export Empty 5. an annual capacity of 5.3 Laden from Northport to CY and empty transfer to outside depot within Northport Outside FCZ area or vice versa 2 Lift-On/Lift-Off (US$) 2.000 TEUs by 2009 and 30 super-post Panamax cranes by 2010.1 LO-LO LADEN Lift off from chassis to container yard or lift on from container yard to chassis 2. 15 container berth by 2009.4 Export Empty 6.2 Laden from North to CY and transfer empty to CY or vice versa 1.5 Transhipment container Source: adapted from http://www.8 1.3 Export FCL 5. Table 5 describes the fees charged at Northport for container handling services.2 LO-LO EMPTY Lift off from chassis to container yard or lift on from container yard to chassis 3 Container Yard Storage (US$) 3.3 4 20’ 21 20’ 75 75 75 75 110 110 20’ 45 45 45 45 45 40/45’ 1 3.2 Laden storage per day or part thereof 3. Table 5: North Port Container Service Fees 1.6 Import Transhipment 5.4 Container washing 4 Stuffing/Un-stuffing (US$) 4.

Southpoint has eight berths (from Berth 1 to Berth 7A). banks. There are in total 14 conventional berths. trailers and container trailers. Other facilities include eight warehouses and a recently completed container and multipurpose yard with a total space of 35. Dumai. and other government agencies such as the Customs.Bangkok by sea (4-5 days) 56 . Buatan and Perawan. towing tractors. Pekan Baru.Non-containerised cargo are handled at 2 facilities in Northport. Connections to Inland Clearance Depots Prai ICD* Ipoh ICT (2 services a day)* Nilai (2 services a day) Pasir Gudang Bangkok ICD (Bangsue & Lat Krabang) * Recognised by Lines as an ICD Connections to Segamat Inland Port Prai ICD Ipoh ICT (2 services a day) Nilai (2 services a day) Pasir Gudang Bangkok ICD (Bangsue & Lat Krabang) Rail To/From Bangkok Faster transit time . liquid and dry bulk cargo. Northport is directly linked to the national Malaysian rail grid. mobile cranes (10 to 15 tons).000 displacement tons whilst Berths 5 to 7A with depths of about 6m can accommodate coastal ships of up to 6.(60 hours) Port Klang .000 sq. Services provided are based on the “block-train” concept. The first four have a depth between 9 m and 10. Cross border direct connections are available up north to Bangkok and down south to Singapore. Immigration Department.Bangkok Rail (60 hours) Port Klang – Singapore . Located in the centre of Port Klang town. are all located nearby.metres apart from other port equipment's including forklifts (ranging from 3 to 10 tons). a dedicated conventional cargo terminal known as Southpoint (formerly Southport. Harbour Masters.5 m to cater for ocean-going vessels up to 40. It is the only port where trains have direct access in the port to enable straddle carriers to directly load and unload containers.000 displacement tons. Southpoint also acts as a niche port to handle transhipment activity for the Indonesian barge traffic due to its proximity to the Sumatran ports of Tanjong Balai. the oldest section of Northport) and the conventional cargo terminals for break bulk. Southpoint which is aptly termed "portin-town” has its advantages whereby hundreds of freight forwarders and shipping agencies. Currently.

Direct service to Eastern side of Bangkok Lat Krabang via Klong Toey Port/Laem Chabang Frequency Port Klang/Bangkok .5 services a week 57 .vice versa .

For example track realignment and improvement works from Taiping to Padang Rengas are being undertaken.Rail Link Schedule Import TS Tranrail Sdn Bhd Bangkok .Bangsue /Lat Krabang i) Tuesday ii) Friday iii) Saturday Export TS Tranrail Sdn Bhd Northport /KN ICD /Ipoh ICD / Prai ICD i)Wednesday ii) Thursday iii) Sunday Note: Closing Time @12.00hours RCL LANDBRIDGE RCL LANDBRIDGE Bangkok/Prai/ Ipoh/ Port Klang Port Klang /Ipoh ICD /Prai ICD/ Bangsue Wednesday Sunday Friday Monday Saturday Tuesday Source: adapted from http://www. Similarly for railways the Ninth Plan has made provisions for rail improvements.00hours ASEAN Rail Express (ARX) ASEAN Rail Express (ARX) Bangkok .northport. 58 .Bangsue /Lat Krabang Northport /KN ICD /Ipoh ICD / Prai ICD i) Friday i) Tuesday ii) Sunday ii) Friday iii) Tuesday iii) Saturday -Pasir Gudang (1 service per week) TS Allied Trans Sdn Bhd TS Allied Trans Sdn Bhd Hat Yai Port Klang Tuesday Wednesday Thursday Sunday Saturday Wednesday Note: Closing Time at 19.com.asp Airports and Railways There are international airports at Penang and Langkawi in the Malaysian subregion. Rail infrastructure upgrading and improvements include other double tracking at selected priority stretches.my/container_rail. and major domestic airports are located at Kepala Batas and Ipoh. The Ninth Malaysian Development Plan has made provisions for expansion of all airports to cater for the increase in demand. The completion of the double tracking of the rail line from Ipoh to Rawang is now scheduled to be completed by late 2007. rehabilitation of tracks and stations as well as the refurbishment and procurement of rolling stock.

It crosses to Malaysia at Sadao.THAILAND Southern Thailand is connected with Bangkok. There are also several regional airports which are located in the larger towns. In Malaysia side. Two Asian highways run through southern Thailand. Hat Yai is also a key logistics platform linking transportation network with Malaysia by both land (highway and railway) and maritime corridor. and continues on the western part of the peninsula. 2 runs mostly parallel to the railroad all the way from Bangkok. The main transportation hub for southern Thailand is Hat Yai. and runs from Bangkok along the Kra Isthmus and then to the western coast of the peninsula. or from Ban Wangprajan to Ka-nga in Perlis state for 36 km and then to Penang for 130 km. the MD will continue with the detailed design and environmental study for the port. by railway as well as highway. Roads Phetkasem highway is the longest road in Thailand. the economic centre of Thailand. highway No 4184 (or Sadao-Ban Wangprajan) is the highway that links Thailand and Malaysia. serious road accidents occur to both pedestrians and vehicles. The road from the border of Thailand and Malaysia at Sadao going towards Hat Yai is in fair condition and heavily congested. crossing to Malaysia at Sungai Kolok. which has developed from a small village to its current size within a few decades. It is expected that land acquisition will commence in late 2007. From Trang province the highway crosses over to the eastern coast to Hat Yai. Ports Kantang Port and Si Kao Port In Trang Province the Kantang Port is presently undergoing improvements and the MD has received a budget of THB60 million for the port improvement/expansion. It has been proposed that an expressway be instituted between Sadao and Hat Yai parallel to the existing road to avoid these large volumes of traffic flowing through rural villages. Asian highway no. Trang Provincial Administration (TPA) is planning land acquisition for port construction which will be undertaken by the MD. it starts from the border at Ban Wangprajan to Padang Besar and then to Penang for 61 km. If the project appears feasible. Asian highway no. The TPA is also interested in investing in the port at Si Kao in order to promote ro–ro ferry 59 . and then ends at the Malaysian border. The road passes through several small villages and due to the large volume of traffic. 18 begins in Hat Yai and runs south along the eastern coast. starting at Sato junction to the border at Ban Wangprajan for 22 km. Rural roads are however poor. There is a proposed new port at Nakleua and a feasibility study on this is now almost complete. Provincial roads in the Thailand part of the subregion are in good condition. Moreover. Rural roads are poorly maintained and there is poor access to it.

service to Langkawi. The port is equipped with modern equipment and staffed with personnel who are fully conversant with inter-modal container traffic systems. The advantage of Pak Bara over Phuket and Phang Nga deep sea port is that Pak Bara could accept larger ships (50.Pak Bara (100 km)46 (2) Hat Yai .Satun - Advantage: this is the shortest route. linking with Thung Song Junction. Currently the TPA has obtained permission for port construction from MD. Pak Bara is 13 m deep which could be easily upgraded to 25 m deep. however. Songkhla Deep Sea Port The Songkhla Deep-Sea Port can simultaneously accommodate 3 ships of 173 m in overall length.000 sq m. though he can only speak Thai. Pilot will board at the anchorage and takes the vessel up to Kantang. the Tammalung Port does not have much development potential for IMT-GT trade. This will cut transportation costs by THB269 million a year. 46 60 . and Pak Bara is only 150 miles away from international routes inside the Straits of Melaka. Tammalung and Customs Port In Satun Province. Pilotage is not compulsory. However. suitable for the working of large ocean-going cargo vessels. Pilot can do the berthing. Thailand exports para-rubber and rice by going through Port Klang and Tanjung Pelapas in Malaysia as well as Singapore which adds transportation cost since both Malaysia and Singapore put a surcharge on Thai exports. Due to this Satun Province has allocated a budget of THB43 million for port improvement and expansion.La Ngoo . A feasibility study which is expected to be completed by September 2007 has been conducted on a second port. the Tammalung Port and Customs Port were constructed to serve cargo vessels up to 400 deadweight tonnage (DWT). Access to the port is via an asphaltpaved concrete causeway from either Highway 408 from Nakhon Si Thammarat Province or Highway 407 from Hat Yai crossing over the Tinasulanonda Bridge. after the feasibility study’s completion. designated as Songkhla Port (Phase II). but it is recommended that the Master does this himself. due to the shallow waters and the absence of charts it is recommended to take the services of the local pilot. is now stacked up to 5 containers high due to limited space. The port total area is 115. which is not suitable for accommodating ro–ro ferry vessels. Disadvantage: no link with the deep south and Hat Yai. Pilotage distance is about 15 miles up the river. the new deep sea port at Pak Bara (Lagoo district of Satun) would cost approximately THB5.6 billion.000 ton DWT). There is a 300 m turning circle at the western end of the quay. The Customs Port nearby has more potential to serve IMT-GT sub-regional trade. Due to limitations on channel depth of less than 4 m and the existing quay length. Access of vessels is by way of a 120 m wide channel dredged to a depth of 9 m and with a length of 4 km. good for those who live in the Northern part of Southern region. Penang and Aceh. The container yard. The Pak Bara deep sea port requires a good rail connection and there are 3 choices for the route: (1) Trang . A detailed design and environmental study will be conducted. To cut transport costs.

Pak Bara (130 km)47 (3) Kuan Nian . and Kuala Lumpur.Pak Bara (110 km). Table 5: Thailand Port Facilities Storage Facilities Songkhla Port The container yard has a stacking capacity of 5.23 m at 3 berths with a total length of 510 m and a 30 m wide apron and can simultaneously accommodate 3 ships of 173 m in overall length 8-10 m deep 4 m deep The southern railway connects Bangkok to Hat Yai. Freight transport of import/export goods by the rail is more convenient than by road because goods can directly pass through between Thailand and Malaysia without changing trains. Ipoh. rail. Disadvantage : the longest route. Two linked railways between Thailand and Malaysia are Sungai Kolok Station and Padang Besar station to the east and west side of Malaysia. Services provided include goods transportation by road.400 TEUs Port at Si Kao Tammalung Port in Satun Province Railway Transport Dimensions for Berthing 8. there are transit goods from Padang Besar station directly to Singapore. Middle East etc. Moreover. and two smaller branches of the railway run from Thung Song to Trang and Nakhon Si Thammarat. since it is located near larger Malaysian cities. 48 Advantage: a compromise since Kuan Nian is the station on the main route between Hat Yai and Thung Song Disadvantage: investment required to upgrade Kuan Nian station into the same standard as Thung Song and Hat Yai. such as Butterworth (Penang). and continues from there to Sungai Kolok. 47 61 . Logistics service providers Songkhla Province: There are 77 local companies that have been registered in Songkhla. Satun and three Deep South provinces . Rail transport provides both passenger and freight services but priority is for passenger.).La Ngoo . and from Hat Yai Junction to Malaysia and Singapore. There is a branch from Ban Thung Phoe Junction to Kirirat Nikhom. all customs procedures can be done with the support of government officers of the railway and Customs House of both Thailand and Malaysia. Padang Besar station has more service provided than Sungai Kolok Station has. creating a land bridge. as well as passengers or Advantage: connecting with Hat Yai. It will also force the Port Authority to upgrade Songkhla Deep Sea Port to have a rail link. respectively. At Padang Besar station. Europe. and sea.good political movement since it will support the Halal Food Industry in Pattani.48 The proposal for a land bridge to run between Songkhla – Pak Bara (a distance of around 130 km) by a dedicated rail or road link would enable transhipment of containers from Songkhla to Pak Bara for further movement (to Indonesia to Medan or Banda Aceh.

Service providers in this area also provide the transportation of petroleum products.000 to 20.000.000–30. However.000. customs brokerage or packaging services. Yala Province: There are 25 local companies with their paid up capital ranging from 200.000. The majority of these service providers only provide specific logistics activities such as transportation.000 baht respectively. Table 4. Logistics service includes the provision of multimodal transport services. Road and rail are the main transportation mode in this province. Most of the local logistics service providers in Southern Thailand are mostly small and medium enterprises and family owned.000 baht for the logistics business. Summary The logistics infrastructure in the IMT-GT is considered adequate for the present volume of freight and vehicle moving along the main economic corridor with some reservation for the Sumatra domestic corridor. Satun Province: There are 6 local companies with their paid up capital ranging from 1.000. Table 6: IMT-GT logistics infrastructure characteristics Road Port IWT Good Fair/Good Fair Malaysia Good/Fair Fair Fair Thailand Fair Fair Fair Indonesia Source: Compiled from industry data Airport Good/Fair Good/Fair Fair Railway Good Fair/Poor Fair/Poor 62 . Infrastructure will need to be harmonised to facilitate the movement of goods and people along the corridor.tourists.000.5 presents an overall assessment of the infrastructure in the IMT-GT based on existing infrastructure characteristics. this does not mask the reality that infrastructure in certain segment of the IMT-GT is still lacking.000 to 5. Interestingly enough there are no local association of service providers.000 baht. Nakhon Si Thammarat Province: There are 16 local companies involved in the logistics business with the paid-up capital between 1. The services related to the packaging of commodity and goods as well as truck rental are also included in this business sector. There are no real local 3rd party logistics providers in southern Thailand. Pattani Province: There are 16 local companies providing logistics services.

Table 1 and Table 2 are a description of the top five commodities crossing the borders between Thailand (Songkhla) and Malaysia (Perlis and Kedah). it seemed that it was impossible to find actual trade statistics specifically for trade within the sub-region. in the IMT-GT. is generally undertaken in two forms: formal and informal. Nonetheless. it was discovered that trade volumes could be somewhat estimated based on “in the field” knowledge of local authorities but these estimations are still somewhat arbitrary. This type of informal border trade is relatively significant in this sub-region. However. This does provide some indication of the volume of regional trans-border movement by land. The rubber products that are exported from Songkhla are loaded onto seagoing vessels in Penang for their 63 . it must be stressed that this trade data is not geographically limited to 1 Thai province and 2 Malaysian states as many of the goods that are crossing the border comes from third countries. Main direction of trades can be found with IMT-GT countries being included but none that could identify IMT-GT origin and destination. However some Customs departments in this region do tabulate trans-border flows at individual crossing points in terms of both value and volume. However. Therefore. with regards to IMT-GT trade statistics. Customs tariffs are collected. The first two tables illustrate the border trade to and from Songkhla province in Thailand with Malaysia’s neighbouring states. regulations and agreements of the Governments involved. consistent regional trade statistics in terms of weight and volume remain an unachievable goal.Annex B: Trade Statistics in the IMT-GT The following annex provides a brief description of trade statistics in the IMT-GT as well as a list of cross border trade numbers. Informal cross border trade involves transactions that bypass or evade appropriate customs procedures. trade data is preserved only in value terms. the available data does provide some indication of trade patterns within the sub-region. Formal border trade refers to trade transactions conducted through appropriate Customs procedures at the border in accordance with rules. However. Where applicable. the biggest problem with the available trade statistics is that they mostly provide trade value and not trade volume. During subsequent discussion with relevant stakeholders. Harmonised trade statistics providing not only value but also volume of goods flowing within the IMT-GT are necessary in order to provide policy makers with the necessary trade information to develop adequate policies that will enhance trade. As in some parts of the world. It is noticed that Thailand mostly exports agricultural products while Malaysia export industrial goods in to Thailand. Border trade between Thailand and Malaysia Border trade. especially between Thailand and Malaysia. Sumatra was less problematic as official statistics also provided import and export volume. This section hereunder will try to provide some indications existing trade flows between IMT-GT areas in their respective countries. Thailand exports more than it imports via Malaysia with rubber products being the main commodity.

These 4 provinces are: 49 50 Based on statistics available from 2006. See <http://www. Sadao.64 China. Japan.96 Argentina. From statistics made available in 2006. Malaysia 3 Rubber gloves 17. Malaysia has a trade deficit of US$ 1.49 More importantly.05 China. Belgium 4 Fishery and frozen seafood 16.82 China.309. China.661 million are not sufficient to off-set imports totalling US$ 5.763. 64 . Canada 5 Fishery and frozen seafood 8. This is a balance of trade of RM 34.188 million.531 million with Thailand. exports to Singapore amounted to RM 90. Japan Source: Songkhla. with exports of US$ 9. India 2 Machinery and spare parts 29. USA.751 million and imports totalled RM 56.91 China. Malaysia has a trade surplus of around US$ 1.final destination. Sumatra Trade Statistics The island of Sumatra in Indonesia can be divided into many provinces.jpm.62 China. compiled by provincial commerce authority Within ASEAN.015 with Indonesia exports amounting to US$ 4.211 million. Japan. Malaysia plays an important role as a transit country for Thai export goods from the South of Thailand. Table 1: Top 5 export commodity from Songkhla (2006) Unit: million of baht Rank Commodity Value Destination 1 Rubber sheets 118.07 Argentina.my/New%20Folder/Figures2007/chapt10. Malaysia’s second and third largest trading partners are Thailand and Indonesia respectively. Malaysia 2 Construction equipment 15. Germany.271. There will be a short description of trade statistics in Sumatra’s 4 major IMT-GT provinces.038. Lao PDR or Cambodia. Padang Besar Customs. USA Source: Songkhla.48 USA. Singapore is Malaysia’s largest trading partner. Sadao.98 Indonesia.64 China.697.127. compiled by provincial commerce authority Table 2: Top import commodity for Songkhla (2006) Unit: million of baht Rank Commodity Value Origin 1 Machinery & Spare parts 18. In comparison to Thai exports.563 in favour of Malaysia.134. Among ASEAN countries.742 million and imports of US$ 8.011.pdf>.50 By contrast. Belgium 5 Canned food 13.072.292. Japan Malaysia 4 IC board 11. Malaysia is the 2nd biggest trading partner for Thailand behind Singapore and has the highest ratio of border trade in terms of value compared to other neighbouring countries such as Myanmar. Padang Besar Customs. Japan 3 Recording devices 13.676 million.epu. Malaysian exports to Thailand are quite small in terms of value with most of goods being heavy industrial equipment that are utilised locally in Southern Thailand. EPU (Accessed on 20 January 2008).

667 7 Germany 133.677 8 Germany 134.223 102. Table 3 and Table 4 describe the top 10 major countries for export to and from North Sumatra. 10 and Malaysia is the third most important country for north Sumatra imports.450 105. This 65 .323 2 China 346.394.084 Source: Provincial Industry and Trade Office or North Sumatera.85% from US$ 4.917 6 Singapore 187.563.324 86.603 203.702 508.873 425.000 in 2005 to US$ 5. Overall.524 Provincial Industry and Trade Office or North Sumatera. South Sumatra. It is noticed that Thailand is not ranked in terms of export destination country while Malaysia is only ranked at no.387 FOB value (000US$) 260.828 5 Netherland 306. 8 while for import Thailand is ranked no.051 9 South Korea 67.226 8 Malaysia 106. North Sumatra The export of goods from North Sumatra province has increased in value by 10.410 3 USA 401.533 210. Sumatra is an island that is very rich in natural resources and is trading actively on the global market.09% compared to 2005.126 294.734 It is interesting to note that IMT-GT member countries such as Thailand and Malaysia are not the most important trade partners of North Sumatra (except for Malaysia in terms of import).784 3 Malaysia 937. there is a strong trade surplus for North Sumatra.950 44.928 105. 2007 FOB value (000US$) 832.058. 2007 Table 4: North Sumatra import by 10 major origin countries Rank Destination Net Weight (Ton) 1 China 650.658 7 Japan 64.532 171.581 10 Thailand 75.606 2 Australia 466.025 4 Singapore 177.North Sumatra.000 in 2006 (Provincial Industry and Trade Office or North Sumatera.769 48.075. Riau and Nanggroe Aceh Darussalam.609 6 India 380.557 35. Table 3: North Sumatra export by 10 major destination countries Rank Destination Net Weight (Ton) 1 Japan 533.541 10 South Africa 84.949 178.028 4 India 306.555 9 Pakistan 175.496 364.169 5 USA 167.858 40. 2007) Import value also increased by 12.104 83.699 121.

098. Boom Baru also has achieved the highest value for import US $216.898 or 24.970. PT is a limited company where its share owned by limited owners while CV is owned personally and PD means trading company.706 23.436.621 Source: Adapted from BPS-Statistics of Sumatera Selatan Province (2007) Number of established company in Palembang was 2. The balance of payment in 2006 was 1.379 2 Singapore 14.705.992 2 Malaysia 536.996.572. Singapore plays a relatively important role as a transhipment hub for North Sumatra. However. Table 5: South Sumatra export to neighbouring ASEAN countries (2006) Rank Destination Net Weight (Ton) Value (US$) 1 Singapore 1. Singapore acts as a transhipment hub to third countries.966.677 followed by Singapore at US$ 451.810 or 51.252.63 percent of the total export of South Sumatra from other main ports. Informal and/or barter trade plays an important “unofficial” role between both countries. 903 CVs and 1.258 3 Thailand 240.028.238.shows that North Sumatra’s trade is more with third countries.980 in 2006 or 49. South Sumatra The flow of export from South Sumatra is mostly destined for Singapore but Singapore in itself is not the real destination.498 Source: Adapted from BPS-Statistics of Sumatera Selatan Province (2007) Table 6: South Sumatra import from neighbouring ASEAN countries (2006) Rank Destination Net Weight (Ton) Value (US$) 1 Malaysia 29.055.991.277.80 percent of total export where crude oils was US$ 703.186.814.500 in 2006 which is distributed into 326 PTs. Export to China had the highest rank in value at US$ 475.18 percent of total import in South Sumatra.44 percent.703 17. Malaysia plays an important role for the flow of trade to and from South Sumatra.847.143 3 Thailand 26.805 or 76.208 PDs.60 US Dollar increase compared to 922.323.377. especially with Malaysia do not reflect the full extent of trade with south Sumatra as the numbers are only based on official trade statistics.661.942. 66 . 62 corporations.992 and to the United States of America at US$ 450.377.170 72. The main river port in South Sumatra is Boom Baru which contributed to the highest export value of up to US$ 1.447. Rubber and articles export values was US$ 1.742 5.835.659 18.325.681 451. Import commodities are dominated by chemical material for industries and capital goods such as machineries and vehicles.616.7 US Dollar in 2005.240. it is believed that these numbers.

225.915 7. the most import port in Riau province is Dumai port with a share of 72% of the total provincial export freight volume and 75% of the provincial export value. In terms of provincial import.439 tons and data indicated that mineral fuel and fertilizer decreased by 24. around half comes from Asia with Singapore playing a leading role in terms of value. However.405.429.435 Singapore 699.379 and Singapore US $ 18. India US$ 50. Korea.651. The Asian market is the most important market with a total value of more than 7 billion US$.996. In ASEAN.770.891. a decrease by 12.977.016.774.523. Jambi Province in the South and West Sumatra in the West. industry materials and mineral fuels. Table 8: Main Country of destination Country Volume (kg) Malaysia 1.06 percent compared to 2005.72 661. 67 .129. Singapore and Thailand but the volume and value are still relatively limited compared the total Asian value as described in Table 8. the top 3 importing countries are Malaysia.392.706. Inter-island goods loaded from Boom Baru in 2006 were estimated at 3.151 333.408 39. Pekanbaru is the provincial capital and Dumai is its main port.685.350.558 tons.46 2005 7.37 Import (CIF-US$) 245.532. China and India are the major customers with more than half of the total export value to Asian countries.285 Value (FOB-US$) 352.256. This is reflected in the relatively high trade surplus gained by the province as illustrated in table 7 hereunder Table 7: Trade Value of Riau province (2004-2006) Year Export (FOB-US$) 2004 5.143. Riau province Riau province lies between North Sumatra province in the North.774. The unloaded goods were mostly food products. Thailand is not a major exporter to the province. The province is self sustainable from an agricultural point of view with some minor excess for export purposes but the oil and mining industry are currently the most important sector. The number of goods unloaded from Boom Baru in 2006 was 2. China US$ 44.680. Malaysia US 23.024.466 Thailand 162.835. the total export value was estimated at over 8 billion US$.705 Total for Asia 18.473.696. In 2006.470 In terms of export.661.11 644. Thailand only contributes up to 3% of total import value from the Asia region. Japan.793.816.694.92 percent compared to 2005.686. Malaysia is the highest on a volume basis.24 There has been a gradual increase in both export and import but import growth seems to have stagnated to less than 10% of the export value.Origin and value of import at Boom Baru was the United States at US$ 62.09 2006 8.143 respectively. Oil and mining plays a key role in the economy of Riau.

Table 9: Main country of origin (import) Country Volume (kg) Malaysia 154.772.060 Singapore 142.483.442. The Asian trade represents around half of the total import volume and value of the province. Chinese goods now represent up to 23% of the total volume of imported goods from Asia but they only represent 18% of the total Asian import value.797 303.750 Dumai port is again the most prominent provincial port with a 66% share of the total import volume and a 46% share of the total import value of the province.644 Thailand 32.098 103.690 Value (CIF-US$) 67.998.913. 68 .826.514.China is now playing an increasing role with more Chinese goods being imported into Riau.069.926 10.293 Total for Asia 560.

Boats & Floating structures 5 Fish. This value is almost insignificant compared to the Korean import value 1.123.727 97.702 9.753.700 5 Thailand 5. Malaysia and Thailand play a minor role in importing products from the province with Thailand importing around 1.850 5.800 151.000 6 Value (US$) 1.428.027. 6 Edible fruit & nuts 7 Wood.452 1.000 440.358. The direction of trade is exclusively Asian with South Korea and Japan the biggest importer of mineral fuels and mineral oil products from the province.032.000 135.11 provides an indication of the export destination from the province.908 Value (US$) 2.494.405 2.000 670. This commodity represents up to 99% of the total provincial export value and volume as illustrated in table 10.110.600 6.927.074.092 120.388.174 2 Singapore 195.170 69 . Its provincial capital is Banda Aceh.438 5.547 In the province there are 2 major ports.928 349. The port of Blang Lancang is the major gas and fertilizer port with a total share of around 60% of the export volume and value of the province. Mineral fuel and mineral oil products are its most important export commodity both in terms of value and volume.000 4.210. Lumber & Cork 8 Straw Basket ware 9 TOTAL Source: BPS-Statistik of Nanggroe Aceh Darussalam (2006) Volume (kg) 4.830.021.419.790.323 302.500 12. mineral oil products 1 Inorganic chemicals 2 Cocoa & cocoa preparation 3 Fertilisers 4 Ships.634 1 Japan 841.3 million US$ worth of goods.450.6 billion US$ in 2006.782. Table 11: Export volume & value by country of destination (2006) Rank Country of Destination Volume (kg) South Korea 3. the port of Lhokseumawe and the port of Blang Lancang. The second port is the port of Lhokseumawe which has a share of 39% of the provincial export volume and value.470.199.601.224. Table 3.000 3 Taiwan 38.631.762.092 98.240 30.090 60. This port is managed by Pelindo and also caters for general cargo while Blang Lacang port has been designed exclusively for gas and fertilizers.624. Singapore is ranked 3rd but there role is more as a transit facilitator.444 18. Molluses.000 4 Malaysia 15. Crust. Table 11 provides more information on the destination of provincial export.274 4. Table 10: Export volume by main commodities (2006) Rank Commodity Mineral fuels.249.284 20.211 8. etc.Nanggroe Aceh Darussalam The province of Nanggroe Aceh Darussalam is located at the northernmost tip of Sumatra Island.

069 36.032. There is quite an important flow of goods between Thailand and Malaysia.834. There is also strong level trade between Malaysia and Sumatra with Port Klang playing an important role.782 6 TOTAL 291.217.900 7.212.786.819 3 Ships.075 1.806 4.074.815. IMT-GT Trade Statistics Summary In the IMT-GT countries Malaysia has substantial trade with Thailand and Sumatra.212.800.118 Malaysia is the biggest exporter to the province with a share of around 84% of the import volume and 40% of the import value.400 8.Vietnam 2.118 Value (US$) 14. cross border and transit as well with a number of goods from southern Thailand utilising Penang Port as port of loading to other markets.786.180 TOTAL 4.040.547 Source: BPS-Statistik of Nanggroe Aceh Darussalam (2006) 7 8 Provincial import volume and value are again very low compared to export volume and value.052. However. trade between Thailand and Sumatra is not very developed as Thailand only plays a marginal role in the Island export and 70 .447.950.200 Philippines 828.908 2.501.224.000 2 Mineral fuels.715.091.000 2 Singapore 12. Table 12 and Table 13 hereover provide further details.269 5.400 263. It is interesting to note that cereals are the 2nd most imported commodity in the province with a value that is very close to the most important imported commodity. Table 12: Import volume by main commodities (2006) Rank Commodity Volume (kg) Salt. The main import port is Lhokseumawe with a share of 85% of the provincial import volume & 46% of provincial import value.000 837.909 36.040. mineral oil products 12.790.084 8.358 Source: BPS-Statistik of Nanggroe Aceh Darussalam (2006) Value (US$) 9.577 6 TOTAL 291.431 5 Others 429.567 1 Vietnam 29.950.900 7.477 3 Indonesia (domestic coastal) 2. This trade is bilateral.227 5.292 5 Others 946. sulphur. earth & stone 246.868 159.460.358 Source: Adapted from BPS-Statistik of Nanggroe Aceh Darussalam (2006) Table 13: Import volume & value by country of destination (2006) Rank Country of Destination Volume (kg) Malaysia 244.101 4 USA 491.832.180.619.013.520 4 Articles of iron & steel 388.150 1 Cereals 29.729 421. boats floating structure 421.

This trade linkage between southern Thailand and Sumatra must be further It is interesting to note that Malaysia’s role in the IMT-GT is very central in the flow of trade within the sub-region.import trade. However. Singapore is shown to compete up to a certain extent with Malaysia with regards to transit goods. encouraged. 71 . Thai exporters from the south of the country use Malaysia as a transit platform while Sumatra also sees Malaysia as a very important trading partner.

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