For those who regularly use Kuala Lumpur or other Malaysian ports as an intermediate or final shipping destination, a new Customs ruling could impact the permitting process. This ruling, which took effect in April 2017 but hasn’t yet been applied, has come under criticism from Malaysian-based shippers, who must now go through the permitting process even when just transferring domestic items from one port to another within the country; however, it could present a boon to foreign shippers who use Malaysia ports. Read on to learn more about the implementation of this Customs ruling and how it may impact the cost and convenience of shipping products from the U.S. to Malaysia.
What does this Customs ruling change?
This ruling would require all shipping firms using Malaysian ports — even those only using Malaysia as an intermediate, rather than a final destination — to apply for approved permits (APs) for a variety of product types. Previously, these permits were required only of items intended for sale or consumption within Malaysia, not those that were being unpacked and reshipped to another foreign destination.
Once enforcement of this ruling begins, every ship that docks in a Malaysian port must apply for an AP if any cargo falls within one of the 74 enumerated categories requiring these permits. While this added layer of bureaucracy and the additional costs of permitting are already beginning to cost Malaysian shippers in lost profits and volume, the fallout from this ruling could be a boon for U.S.-based shipping companies, who will now be able to transport goods within Malaysia–a privilege once reserved only for Malaysian-based shippers who weren’t required to seek any permits to do so.
How will this ruling impact the cost and process of shipping foreign goods within Malaysia?
A number of Malaysian shipping and cartage groups have already begun to lobby for exemption from this Customs ruling due to their well-founded fears of losing business to foreign shippers; however, it’s unclear whether these lobbying efforts will meet with success due to the support for this ruling from foreign shippers who do a great deal of business in Malaysia.
Instead of paying a domestic firm to transport your goods to their next destination, risking losses or miscommunications due to language barriers, U.S.-based shippers will be able to handle this all in-house, saving money and improving efficiency while ensuring the safety of the items being shipped.
If your current shipping or cartage company does business in Asia but has avoided shipping to or within Malaysia in the past, it may be worth investigating the cost of shipping through Kuala Lumpur and other nearby ports now that this Customs ruling has been enacted. Even if this ruling is later amended or domestic companies are permitted to apply for exemptions, its April 2017 implementation has sent shock waves throughout the Malaysian shipping industry while opening the borders to foreign shippers.