Association sees 5% cargo growth for Penang airport

GEORGE TOWN: The Penang Freight Forwarders Association (PFFA) projects a 5% growth this year for the volume of export cargo handled at Penang International Airport, revising its earlier forecast of contraction. Earlier PFFA forecast that the volume of cargo would decline by 1% to 2% from 69,855 tonnes recorded last year. PFFA honorary secretary-general Ali Ahmad told StarBiz that the freight forwarding business had experienced a pick-up since August.

"We can see more cargo being shipped out by air from the electronics, plastic and textile industries in the third quarter. "There were a lot of last-minute orders from customers who wanted to stock up for the year-end festive holidays. Higher volume: Cargo being discharged from a plane at the Penang International Airport.Higher volume: Cargo being discharged from a plane at the Penang International Airport.

"Garment suppliers from the northern region, for example, sent their products by air to meet their customers' deadlines. "Usually these garment products are shipped by sea. "Finished electronic goods make up about 70% of the export cargo shipped out by air.

"The trend should continue into the fourth quarter. "Because of the pick-up, we are revising the projection, " he said. The first half of this year saw the volume of export handled at Penang International Airport dropped by 0.8% to 33,208 tonnes compared with 33,476 tonnes achieved in the same period in 2018.

Penang International Airport handled 64.4% of Malaysia's overall air trade in 2018. Meanwhile, competition from Middle Eastern airlines, which offer competitive freight rates operating from KL International Airport, had impacted negatively on the volume of cargo shipped out from Penang International Airport. "The export figures from Penang would have been higher, if not for this competition, " Ali added.

As for imported cargo, Ali pointed out that the volume handled between January to June this year has dipped by 16.5% to 23,472 tonnes from 28,103 tonnes in the same period last year. "Lesser cargo was imported because of the weak ringgit, which made the buying of overseas goods more expensive, " he noted. Meanwhile, PFFA air-freight vice-chairman P.

Kalimuthu said Penang needed a better transportation system to enhance the long-term profitability of the logistics industry. "Although the logistic sector only accounts for 5% of the total vehicles on the road, its energy consumption accounts for 25% of the transport sector. "Currently, logistics does not have many other options and has to compete with other road users who can be diverted to use public transportation.

"As a result, the worsening traffic congestion on Penang's road has increased the cost of logistics companies, " he said. Kalimuthu also said the port and airport authorities could introduce initiatives to further improve collaboration between stakeholders, which includes also the customs department and provide better facilities to speed up the processing time. "In short, the state government should create a sectoral plan to facilitate the sector's growth and to assess future trends, including any possible disruption from an economic downturn or the building of a competing airport in Kulim.

"A more efficient logistics sector will reduce pressure on Penang's transport network, " he added.

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