By Ts Dr. Hj Ramli Amir, former President of the Chartered Institute of Logistics and Transport (CILT) Malaysia and Vice-President of CILT International for Southeast Asia
KOTA KINABALU: The Prime Minister’s emphasis on trade facilitation as a cornerstone of Malaysia’s economic strategy underlines its critical role in ensuring the nation remains competitive in an evolving global landscape. Trade facilitation—defined as simplifying, harmonising, and modernising trade processes—aims to remove bottlenecks that increase costs and delay shipments. By reducing barriers, enhancing operational efficiency, and fostering economic partnerships, Malaysia has strengthened its position as a logistics hub in Southeast Asia.
This national agenda resonates strongly with the needs of Sabah, a state with vast untapped potential. However, Sabah faces unique logistical challenges that must be addressed to fully harness the benefits of trade facilitation. Through strategic initiatives led by the Sabah Logistics Council (SLC), the state is working towards creating a solid logistical foundation that mirrors the national success model.
Sabah’s Unique Position in Regional Trade
Sabah’s location along major shipping routes positions it as a strategic trade gateway to East Asia, ASEAN, and beyond. Industries such as agriculture, oil and gas, and tourism dominate Sabah’s economy, with products like palm oil, aquaculture, timber, and cocoa contributing significantly to exports. Despite this, Sabah’s logistical systems and infrastructure have not kept pace with its economic potential.
Key Challenges in Sabah:
- Inadequate Port Infrastructure: Ports such as the Sapangar Bay Container Port (SBCP) require upgrades to expedite loading and unloading activities. Limited transshipment capabilities restrict Sabah’s ability to compete with major regional ports.
- Fragmented Transport Networks: A lack of integration between transport modes—road, rail, and sea—results in inefficient cargo movement and higher logistics costs.
- Data and Coordination Deficiencies: The absence of a unified logistics platform hampers effective supply chain management. This limits stakeholders’ ability to make data-driven decisions.
- Sustainability Gaps: While global trade is shifting towards environmentally sustainable practices, Sabah has yet to implement comprehensive green logistics solutions.
These obstacles underscore the need for a coordinated approach to logistics development, led by initiatives like the SLC, to overcome these barriers and unlock Sabah’s economic potential.
Sabah Logistics Council (SLC): A Strategic Response
The establishment of the Sabah Logistics Council (SLC) is a significant step forward in addressing these challenges. The council serves as a multi-stakeholder platform bringing together government agencies, private sector players, and industry leaders to spearhead logistics reform in the state.
Objectives and Initiatives of the SLC:
- Infrastructure Development:
The SLC advocates for investments in key infrastructure projects, such as the expansion of SBCP, improving road networks linking industrial zones to ports, and exploring rail connectivity. For instance, ensuring seamless road links to KKIP (Kota Kinabalu Industrial Park) and other industrial clusters enhances supply chain efficiency. - Policy Alignment and Formulation:
The SLC plays a crucial role in shaping Sabah’s transport masterplan to align with the National Transport Policy 2019–2030. This ensures that Sabah benefits from federal support while contributing to Malaysia’s broader logistics goals. - Digitalisation and Data Integration:
Developing a centralised logistics data centre is a priority for the SLC. This platform would facilitate real-time tracking of cargo movement, improve port operations, and enhance transparency in the supply chain. - Sustainability Initiatives:
The SLC is actively exploring green logistics solutions, such as using electric vehicles for last-mile delivery and renewable energy for port operations. These efforts align Sabah’s logistics industry with global ESG standards. - Capacity Building and Skills Development:
To support modern logistics operations, the SLC is promoting training programmes to upskill the local workforce in areas like digital logistics management, green logistics practices, and advanced supply chain analytics.
Trade Facilitation in Practice: Sabah’s Success Stories
Sabah has begun implementing trade facilitation measures that demonstrate the benefits of coordinated efforts in logistics:
- Sapangar Bay Container Port Expansion:
Investments in modernising the SBCP have increased its cargo handling capacity and efficiency. Automation of port operations and the introduction of digital tracking systems are expected to significantly reduce processing times. - Integrated Customs Systems:
By adopting the National Single Window (NSW) system, Sabah has streamlined customs clearance processes, enabling electronic submission of documentation. This has reduced costs and time for exporters and importers. - Enhanced Feeder Vessel Connectivity:
Smaller ports such as Tawau, Kudat, and Sandakan are connected to SBCP via feeder vessel services, allowing goods from remote areas to access international markets efficiently. This has strengthened supply chains for industries such as aquaculture and timber. - Public-Private Partnerships (PPPs):
Collaboration with private entities has facilitated investments in logistics infrastructure, such as warehouse facilities and cold storage for perishable goods. For example, partnerships with logistics firms have improved transportation for agricultural exports. - Support for SMEs:
Simplifying export documentation and providing access to affordable logistics services have enabled SMEs to participate in global trade. This has particularly benefited rural producers in Sabah’s cocoa and handicraft industries.
Sustainability in Sabah’s Logistics Sector
Global trade is increasingly prioritising sustainability, and Sabah is beginning to align with this trend. Key initiatives include:
- Electric Vehicles for Logistics and Tourism: Sabah is piloting electric buses for tourism and exploring hybrid vehicles for cargo transport.
- Renewable Energy in Ports: The use of solar and wind energy to power port operations is being explored as part of the state’s green logistics strategy.
- Sustainable Packaging for Exports: Encouraging local businesses to adopt biodegradable and recyclable materials in packaging has boosted their appeal in environmentally conscious markets.
These measures not only reduce the environmental footprint of logistics operations but also attract investors who prioritise sustainability.
Lessons from National Successes
Sabah can draw inspiration from the success of national logistics initiatives:
- Port Klang and PTP Modernisation: These ports have leveraged automation and advanced technologies to enhance efficiency and capacity, establishing Malaysia as a regional logistics leader.
- National Single Window System: This digital platform has streamlined customs processes nationwide, offering a model for Sabah to follow.
- Green Logistics Leadership: Malaysia’s commitment to green logistics, including renewable energy and carbon-neutral transport solutions, provides a roadmap for Sabah to adopt similar practices.
Vision for Sabah’s Logistics Future
With a comprehensive approach to trade facilitation, Sabah is well-positioned to transform its logistics sector. Improved infrastructure, enhanced connectivity, and sustainable practices will enable the state to compete globally and drive economic growth. By embracing the initiatives of the SLC and leveraging national successes, Sabah can create a logistics ecosystem that benefits local businesses, attracts foreign investment, and supports regional trade integration.
Conclusion
The Prime Minister’s vision for trade facilitation as a driver of national growth serves as an inspiring framework for Sabah. Through the Sabah Logistics Council, the state has begun addressing logistical challenges and laying the groundwork for sustainable development. By prioritising modern infrastructure, digitalisation, and green practices, Sabah can unlock its economic potential and establish itself as a vital logistics hub in the region.
This transformation is not just about improving trade flows; it is about enabling economic resilience, empowering local industries, and securing Sabah’s future as a thriving participant in Malaysia’s growth story.