Malaysia’s Logistics Sector Poised for Resilience Amid Global Trade Challenges
PETALING JAYA: The logistics sector in Malaysia is projected to exhibit relative robustness, despite anticipated global trade constraints stemming from increasingly stringent carbon-emission regulations.
The burgeoning eCommerce landscape and evolving trade dynamics arising from US-China tensions further position the country as a potential benefactor.
According to a comprehensive report by Kenanga Research, the United States has ascended to become Malaysia’s third-largest export market, trailing only Singapore and China, as heightened tariffs imposed by the U.S. come into effect.
The report elucidates that Malaysia stands to gain from the shifts in global trade as nations recalibrate their trade routes in response to elevated U.S. tariff barriers.
“Notably, throughout the 12-month span of the trade conflict commencing in February 2018, the share prices of local listed port operators remained largely stagnant, with the exception of Bintulu Port Holdings Bhd, which saw a significant decline due to its substantial exposure to China, its principal liquefied natural gas (LNG) export market,” it indicated.
During the high-tariff period, China, which ranked as Malaysia’s foremost export destination from 2019 to 2022 (with Singapore claiming the top spot in 2022), endured a dual setback from tariff escalations and port shutdowns induced by pandemic-related lockdowns, according to the findings from Kenanga Research.
Despite these challenges, the research house anticipates Malaysian ports to experience modest growth in container volume, forecasting an increase of approximately 4% by 2026.
This projection hinges on the substantial investments in intra-Asia trade routes, which remain less susceptible to the ramifications of U.S. tariffs.
As for the long-term outlook, Bintulu Port is poised to emerge as a considerable beneficiary, owing to its significant dealings with China, touted as its largest LNG export market. Kenanga Research has assigned a “market perform” rating for Bintulu Port, with a targeted share price of RM5.30.
In contrast, the overall sector is under a “neutral” stance according to the research house. They cited a revised projection from the World Trade Organisation in October 2025, which slashed its forecast for global merchandise trade volume growth for 2026 to a mere 0.5%, down from an earlier estimate of 1.8%.
This adjustment is largely attributed to the soaring trade tariffs and potential escalations in Middle Eastern conflicts.
“Recent communications have highlighted that while elevated tariff levels are still paramount, adjustments to tariff rates and conditions are being undertaken through ongoing trade negotiations and reciprocal trade arrangements,” the report added.
This strategy aims to bolster the U.S. industrial landscape and recalibrate trade balances, although it has induced uncertainties and elicited varied responses internationally.
Furthermore, the research emphasises that global trade must navigate the intricacies of stricter carbon emission regulations, which may further hinder trade growth.
They reported that the diversion of maritime passage from the Suez Canal to the Cape of Good Hope has led to prolonged voyages for the Asia-Europe route, accounting for 30% of global container traffic.
This shift has subsequently diminished the frequency of calls that shipping lines can make at Westports Holdings Bhd’s ports, as well as at other regional ports.
Source link: Thestar.com.my.
