MALAYSIA: Penang forwarders complain of soaring rates

Airfreight rates being offered by major cargo carriers have reached an all-time high, prompting many local companies and multinational corporations in the Malaysian high-tech production centre of Penang to use smaller carriers to send their cargo out of KL International Airport (KLIA), the 125-member Penang Freight Forwarders Association (PFFA) said. The association’s first vicepresident and […]


Airfreight rates being offered by major cargo carriers have reached an all-time high, prompting many local companies and multinational corporations in the Malaysian high-tech production centre of Penang to use smaller carriers to send their cargo out of KL International Airport (KLIA), the 125-member Penang Freight Forwarders Association (PFFA) said. The association’s first vicepresident and air freight chairman P. Kalimuthu told StarBiz that airfreight charges had risen 40–50 per cent because major cargo carriers had yet to increase their capacity and companies in China were willing to pay premium airfreight charges.

Airfreight charges to the US recently increased to US$5–6 per kg from about US$3 per kg, while cargo heading to Europe is fetching between $4-5 per kg compared with $2–2.50 previously. Kalimuthu said this was the highest rate of increase since 2002. “Earlier this year, due to the global recession, major cargo carriers reduced their capacities. They have yet to increase their capacities despite the recent improvement in the global economic climate,” he said. “That Chinese companies are willing to pay premium charges also helped push up airfreight charges.” But he added that

PFFA customers unwilling to pay the high airfreight charges were opting to use non-major carriers flying out of KLIA to ship their cargoes, which translated to savings of about $1 per kg. PFFA airfreight secretary Ali Ahmad noted the rising volumes in the third quarter where airfreight companies in Penang handled 27,000 tonnes of cargo, compared with 24,000 tonnes in the second quarter. “So far in this fourth quarter, there is about 25 per cent increase in the volume of cargo handled over the third quarter. We expect at least a 30 per cent growth in the volume of air cargo handled in the fourth quarter over the third quarter,” he said.