In a keynote address to the International Maritime Conference Malaysian Minister of Transport, YB Loke Siew Fook, “The security of the sea lines of communication is critical to Southeast Asia’s economic growth and regional prosperity. However, not enough attention is given to the importance of preserving a safe and secure maritime highway for unimpeded trade.
“Geopolitical and overlapping interests have multi-faceted implications resulting in a slowdown in shipping and economic activities. The Covid-19 pandemic and the war between Russia and Ukraine, for example have led to shipping disruptions, which have hampered maritime transportation across the world, including Malaysia,” the Minister said.
The disruption to maritime transport and ports were seen as showing the deep impact conflicts have on the global economy.
“In view of these developments, it is incumbent that nations are prepared to address all the pressing issues because international trade is highly dependent on the safe passage of ships,” Minister Loke said.
Malaysia’s coastline borders the one of the world’s busiest sealanes – the Straits of Malacca and Singapore, and the South China Sea, increasingly a region of geopolitical tension. The Malacca and Singapore Straits see around 70,000 to 80,000 vessel transits annually.
In a panel session that followed the Malaysian Transport Minister’s speech the costs of a hypothetical closure of the Singapore and Malacca Straits was seen as costing $65 million a week as result of diverting via the Sunda Strait. If the Sunda Strait was also closed and diversion of shipping traffic was via the Lombok Strait impact would increase to $120 million a week. If all three were closed and shipping traffic was forced to detour round Australia the number jumps to $650 million additional cost per week.
Dr Scott Edwards, a Research Fellow at the University of Leeds, noted that there had been changes in supply routes due to geopolitical pressures such as the supply of grain from Ukraine.
Dr Eva Pejsova, from the Brussels School of Governance in Belgium, said conflict in Ukraine showed the direct impact of war on shipping.
The war with Ukraine has also seen the rapid growth of the so-called “dark fleet” that busts sanctions by turning off AIS to hide their activities conducting ship-to-ship transfers of oil cargo at sea in areas such as the South China Sea.
The recent fatal explosion and fire onboard the Gabon-registered aframax tanker Pablo in the South China Sea of the coast of Malaysia was part of the dark fleet.
“How do you get a shipowner to comply with regulations if they turn off AIS?” asked Dr Edwards.
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