Port Klang to increase charges by 30% starting July 2025; FMM warns the hike could lead to cargo diversion and put jobs at risk.

KUCHING, June 15 — The Federation of Malaysian Manufacturers (FMM) has voiced strong opposition to the upcoming port tariff hike at Port Klang, which was approved by the Ministry of Transport and officially gazetted on June 13, citing its untimely implementation and potentially damaging economic effects.

FMM president Tan Sri Dato’ Soh Thian Lai said in a statement yesterday that the new tariff structure includes a 30 per cent increase in container handling charges, to be rolled out in three phases starting July 1, 2025.

In addition to the handling fee hike, container storage charges are also set to soar by between 197 and 243 per cent — a move Soh described as a heavy blow to manufacturers already burdened by mounting costs due to both global and local challenges.

“This increase is taking place while industries are still dealing with ongoing external uncertainties, including the threat of US tariffs on Malaysian exports, the expansion of the Sales and Service Tax (SST), and a planned restructuring of electricity tariffs,” he said.

Soh warned that the accumulation of these cost pressures would significantly affect manufacturers and exporters at a time when Malaysia is striving to strengthen its economic recovery, further undermining the country’s export competitiveness.

He noted that the sharp rise in port-related costs could severely disrupt the financial planning of exporters and importers during this crucial recovery period.

Under the newly gazetted rates by the Port Klang Authority, handling charges for a 20-foot container will rise from RM300 to RM390 in stages.

Given that Port Klang handles around 12.5 million TEUs (twenty-foot equivalent units) annually, Soh estimated this could lead to an additional RM1.125 billion in annual industry costs once the full increase is implemented.

“Malaysian ports have long maintained a competitive edge due to affordable cost structures,” he said. “But with the revised rates, container handling fees will climb to US$120–130 per TEU, aligning with Singapore and Hong Kong, and surpassing those in regional competitors like Vietnam, Indonesia, and Thailand.”

Soh warned that this could diminish Malaysia’s attractiveness as a logistics hub and prompt cargo to be rerouted to more cost-effective ports in the region.

He also cited Malaysia’s fall to 34th in the IMD World Competitiveness Ranking and its 26th position in the World Bank’s Logistics Performance Index as indicators of growing concern.

The tariff hike, Soh said, could send a discouraging signal to investors and disrupt business planning and trade flows — particularly worrying as manufacturers already face squeezed margins and a volatile global economic landscape.

He urged the government to conduct a comprehensive review of all cost-related policy changes, calling for greater coordination between ministries when making decisions that affect business and consumer expenses.

“Port charges, SST expansion, electricity tariff hikes, and global trade challenges must be considered together — no ministry should act in isolation without understanding the cumulative burden on industry,” he stressed.

Soh called for an immediate suspension of the port tariff increase, electricity base tariff adjustments, and the broadened SST scope, while urging the government to re-engage with industry players to reassess the overall economic and operational implications.

“These cost hikes will ultimately result in higher prices for consumers, reduced manufacturing investments, and slower job creation,” he said.

"FMM is committed to working with the government to realign policy timelines, improve transparency in cost justifications, and formulate a coordinated national strategy to support industrial growth and safeguard consumer welfare.” — The Borneo Post