Strategy to build a transshipment port as a catalyst to achieving critical mass for Sabah's economic growth

Abstract

The purpose of the paper is to strategize to build transshipment port in Sabah, as a catalyst to achieving critical mass towards Sabah's economic growth. Digital transformation has led to a new era of port development at an unprecedented pace. China represents a large percentage of total global trades, navigating the maritime silk road to various global and regional ports. In Malaysia, the lack of concrete justifications for the issue of transshipment port strategy leads to a debatable framework. Hence, the aim of the paper is to critically discuss the strategy to build a transshipment port as a catalyst to achieving critical mass for economic growth in Sabah. The study draws heavily on existing literature on the theoretical evidence and the possible factors that shape strategy to build transshipment port in Sabah. Based on reviewed literature, various resultant strategies are discussed. Sabah's main container port, Sapangar Bay Container Port (SBCP) has failed to capitalise on the rapid growth in trade burgeoning in various economic hotspots in the region, thus benefitted major port powers of the region like Singapore. Despite Sabah having a geographical advantage in Brunei Indonesia Malaysia Philippines-East ASEAN Growth Area (BIMP-EAGA), no mainline operator (MLO) will call or establish hub & spoke contract with Sabah port, because it is far from efficient, modern or capacious. SBCP could only handle a capacity of 0.3 to 0.4 million TEU, as compared to Singapore's port that is capable of handling more than 33.6 million TEU, and at lower shipping and handling cost. Sabah state has land rights but not ocean rights; cabotage policy has increase shipping and handling expenses in Sabah. Singapore's recent move to increase its berth rate demonstrates confidence in maintaining its port leadership in the region, and port users do not mind paying more for high reliability of service performance and quick response to port users' needs. The paper strategically guides managers of organisations in Sabah, state and federal governments, and businesses in Sabah towards building a transshipment port in Sabah to effectively retire cabotage policy to reduce port cost, reduce shipping and handling cost for long term, increase availability to handle additional cargo volumes, develop hinterland to increase operational efficiency, bridge Sabah ports and economic clusters, eliminate bottleneck to increase port activities, unlock Sabah's potential in exporting its natural resources, increase port service quality to be response-able towards global port user's needs, and then and only then to give regional port powers a run for their money.