KEY PLAYERS IN THE LOGISTICS CHAINA. Nesathurai [24 March 2003: Westport]

1.0 IntroductionTrade is crucial to the Malaysian economy where transportation and logistics play an important role in facilitating the trade for both MNCs and small 'and medium-sized industries. In this process, transportation and logistics channels, also known as 'trade intermediaries lays a crucial role because it provides a vital link between the industries and its market and supply sources. They form an integral element of the industry's competitive strategy. For this strategy to succeed however, all potential impediments hindering the competitiveness of export industries must be tackled and reduced to the minimum possible. This is especially true in the era where ICT technologies make it possible for instant communication, payment for goods and services are increasingly negotiated and orders are handled electronically. This in turn has led to the enormous pressure on transport and logistics to ensure efficient delivery.

Effectiveness of export intermediaries will directly affect the export performance which in turn will affect the overall competitiveness of Malaysian exports in the global economy. Being a trade

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dependent economy, international trade performance and efficiency are essential components of overall success. Malaysia exports and imports goods worth more than RM 300 billion annually making it the 17 largest trading nation in the world and approximately 95% of trade moves via ships.

On a broader perspective, the benefit of logistic excellence is enormous for the national economy. Apart from maintaining cost competitiveness of business operations, it attracts foreign direct investors to establish importing, production and distribution facilities therefore increases employment opportunities. This is in line with the government's objective of making Malaysia as the procurement centre/distribution centre for the entire region. Competitive advantage attained through efficient logistics management also serves the interest of the general public vis-i-vis the end consumers. It has the potential to minimize import and export prices and so inflation. This in turn gives exporters a much needed edge, a fair opportunity, reliable, rapid delivery and relatively cheaper prices in an increasingly competitive world market.

2.0 What is Logistics?

The word logistics is derived from its usage in

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military operations where the term refers to the "organisation of moving, lodging and supplying troops and equipment". In the commercial field, Martin Christopher, define logistics as "a planning orientation and framework that seek to create a single plan for the flow of product and information through a business".

The American Council of Logistics Management defines "logistics" as

"the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, fmished goods, and related information from point of origin to point of consumption for the purpose of conforming to customers' requirement"

To put it simply, supply chain is a network of organisations that are involved in the different processes and activities that create products and services of value to the ultimate consumer. According to Martin Christopher, supply chain management can be described as "the management of the relationship between the organisation in the supply chain to deliver superior customer value at less cost to the supply chain as a whole". It builds upon the logistics framework to achieve linkages

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within a particular organisation, and with the processes of other organisations. Transportation and increasingly, multimodal transport provides the links between the various logistics activities and enables the movement of goods and services along the supply chain.

3.0 Transport Systems

3.1 Unimodal Transport (Traditional Mode)

According to UNCTAD, Unimodal transport is defined as the transport of goods by one mode of transport by one or more carriers. If there is only one carrier, he issues his own transport documents, e.g. a bill of lading, an air waybill, a consignment note, etc. If there is more than one carrier, for example, carriage from one port via a second port to a third port with transhipment at the intermediate port, one of the carriers may issue a through bill of lading that covers the entire transport. Depending on the back of clauses of the through bill of lading, the issuing carrier my be responsible for the entire port-to-port or only for the part which takes place on board his own vessel.

3.2 Multimodal Transport

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Multimodal transport is broadly defined as the movement of goods from one country to another by at least two different modes of transport (e.g. sea, land, air) performed under one contract. If the carrier organising the transport takes responsibility for the entire transport, he issues a Multimodal Transport document.

4.0 Logistics Flow

Logistics deals with geography, time and value. Moving from source to destination, freight and transportation connect buyer to seller and make the final delivery. In this process, there are number of stages involved. Freight and transportation alone encompasses many modes including truck, sea, rail and air, all with varying issues, costs and levels of service. The flow chart below illustrates the process, which involves the input of these service providers in the movement of a particular product from the point it leaves the plant to end consumer in a retail outlet.

Businesses and organisations addresses their logistics requirements by assigning staff to perform logistic activities or by outsourcing one or several functions to third-party providers. In-house logistics department usually manned by full-time logisticians who perform logistics-related functions. Their

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occupations include purchasing managers, transportation managers, custom brokers, shippers and receivers. In the absence of outsourcing options, companies have dealt with moving and storing of goods in a disparate way. Although outsourcing of logistics services is a fairly emerging trend, there are a large number of firms that maintain their own in-house logistics or distribution departments. This is largely prevalent in the manufacturing, commodity sectors, wholesaling and retailing. In-house logistics department is perceived as significant among the large MNCs (manufacturing and mining sector) operating in Malaysia due to their global presence. Such an arrangement appears beneficial because it enables smooth coordination of logistic functions among plants located in various parts of the world.

The terms of sales are examined to determine the exporter's shipping responsibility and ability to fill the order. Once this has done, quotations on freight rates are sought from different shipping agents. Once shipping line and vessel are selected. The exporter then will prepare container shipping or advisory note. Acting on-behalf of shipping company, shipping agent will book the space for cargo, check the details of the shipment (including weight, size, contents value, ports of shipment and destination that contains in the exporters' shipping note. When the exporter's

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goods have unloaded at the dockside, it is the shipping company's responsibility to ensure that they are properly loaded aboard the correct ships.

This approach splits functional departments into exclusive compartments when in reality businesses are not organise in that manner. The essence of supply chain management is managing flows across departments and often companies. Today, the advancement in technology and IT enables coordination between different modes and nodes. So a high degree of management integration is vital. This concept is increasingly replacing ttaditional fragmented approaches to buying, storing and moving goods.

Given the complexity of transport and logistics process which involves multiple players, exporters/shippers must evaluate various options that can ultimately minimize their overall cost and increase the competitiveness of their products. Their choice depend on among others:

Type of industry Nature of product (light or heavy, fragile or

sturdy, perishable or durable) High or low in value per cubic meter Distance to be shipped

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Available means of transportation Relative freight cost

5.0 Key Suppliers of Logistics Services

The following section provides an overview of key logistics service providers and its functions in enhancing smooth flow of cargo from the point of origin to the point of destination.

5.1 Transport Operators

5.1.1. Haulage/Trucking

Haulage or Trucking is the preferred choice for shippers especially for inland movement of cargo. These are normally confine to the distance between manufacturing plant/plantation, inland container depots (ICDs), warehouse and port terminals. In Malaysia, haulage services has long been monopolised by five leading firms namely Kontena Nasional Bhd, MISC haulage Services Sdn Bhd, Konsortium Logistik Bhd, Diperdana Corporation Bhd and Multimodal Freight Transportation Sdn Bhd, for more than 20 years. They formed the Container Hauliers Association of Malaysia (CHAM) to monitor the inland container haulage business. CHAM members had a total of 2,212 prime movers

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and 11,318 trailers at the beginning of year 2000. However the government decided to liberalise this sector by issuing 50 new licences in late 1999 to meet the demands of the growing containerised trade. The new haulier licenses have limitation on geographical coverage and the number of prime movers and trailers allowed.

Considering the importance of the haulage industry in the total logistics chain, haulage companies tend to migrate their way up the value chain by offering an ever-increasing portfolio of distribution services. Some haulage firms have extended their service offerings by forming an alliance with complementary service providers such as warehouse and packing services. For instance Kontena Nasional also ventured into bulk liquid distribution, inland container depots, freight forwarding, distribution and warehousing, and shipping and chartering services.

5.1.2 Rail

The Keretapi Tanab Melayu Bhd (KTMB) has been providing rail carrier services for decades in Peninsular Malaysia. With the rapid growth in local ports as well as domestic and cross-border trade, rail carrier services has gained popularity among shippers, importers and exporters as an invaluable

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alternative for freight services. The company provides containerised freight services, conventional freight services (for bulk carriers, cement, etc) and international freight servicee to Thailand and Singapore. It also provides land-bridge services linking Singapore up to Kunrning in China, under the Trans Asia Link project endorsed by ASEAN. KTMB also provides rail links to freight terminals and Inland Container Depots located in Padang Pesar, Butterworth, Ipoh, Port Klang, Segamat, Pasir Gudang, Sungai Way, Nilai, Kajang and Singapore. The existing infrastructure, a rail line stretching from the Northern region at Padang Besar and Bangkok through the central region and up to the southern region enables KTMB to provide its current freight function. The demand for KTMB's freight services has been growing in tandem with manufacturing activities and trade. The global trend towards containerisation and growing container throughputs at leading ports such as the Johor Port, Port of Tanjung Pelepas, Port Klang (Northport and Westport) and the Penang Port has given the boos for KTMB's upgrading plans. The containers rail service has seen a remarkable growth, which is slowly emerging, into an important component of multi-modalism in the country's logistics and transportation sector. Currendy the company is facing some constraints, among others shortage of locomotives

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and wagons. To address the problem, the company intends to spend RM45 million on new equipments to improve its services.

Keretapi Tanah Melayu Berhad (KTMB), currently runs 30 daily domestic scheduled block train services and 10 weekly international block train services moving up and down between various destinations. The number of companies using this service are also growing namely, P&O Nedloyd, Orient Overseas Container Lines, Hanjin Shipping, Evergreen, Malaysia International Shipping Corporation and Pacific International Lines as this mode provides time and cost advantages. Moving cargo from Port Klang to Bangkok for instance takes 60 hours which is fast and efficient by rail compared to between five to seven days by sea. With the shortened transit time offered by the container landbridge, shippers get an edge as they can link up the containers directly to main line vessels at the port. A significant savings to shippers is that, containers transhipped via rail do not attract Terminal Handling Charges (THC). The contribution of KTMB's containerised rail service is critical as it not only promotes transhipment business for ports but it also has the potential to make Malaysia an international procurement centre for multinational companies located in ASEAN countries.

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5.1.3 Air Freighters

Total air cargo handled at Malaysian airports recorded a growth of 16.3% totalling 803,612 tonnes in 2002. Out of this, 92% percent of the total air cargo handled by Malaysian airport are international cargo.

The air freighting division, MASKargo handled 515,000 tonnes of cargo in 2002 and therefore contributed 18% of the total turnover for Malaysia Airlines. Meanwhile, the carrier also forged an alliance with Northport in Port Klang to develop a combined sea and air transportation services for the transhipment of traffic from the region. The division's Priority Business Centre at KLIA was established to reduce turnaround time for cargo processing, loading and unloading and gives priority to its nine major clients who contribute 60% to MASKargo's revenue. They are

BAX Global (M) Sdn Bhd Danzas AEI (M) Sdn Bhd Emery Worldwide (M) Sdn Bhd Exel Logistics (M) Sdn Bhd\Geologistics

(M) Sdn Bhd Kintetsu Integrated Air Services Sdn Bhd Nippon Express (M) Sdn Bhd

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Trans-Asia Shipping Corp Sdn Bhd Forward Freight Services Sdn Bhd

5.3.4 Coastal and Ocean Freighters

Coastal and ocean freight services plays an important

role in international shipment of goods. International

shipment accounts for more than 90 per cent of

marine tonnage handled at Malaysian ports. Coastal

shipping in Malaysia is governed by the Cabotage

policy, which eliminates competition from foreign

lines. Among the major Malaysian shipping lines are

the Malaysian International Shipping Corporation

(MISC), Halim Mazmin, Malaysian Merchant

Marine, Nepline, Perkapalan I<:ris, Johan Shipping,

Chong Fui and PDZ shipping.

5.2 Customs / Border Crossing Points

Customs is an important agency of every government. Customs processes goods and merchandise on both the entry and exit points. It

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plays a major role in enforcing laws at the nation's borders, protecting the health, safety, environment, and preventing the entry of contraband. It's objectives in general is i) to ensure that all goods entering and exiting the country do so in compliance with all laws including revenue, ii) to facilitate the entry of all legitimate merchandise into the country.

Much of the Customs work in relation to the clearance of goods involves the processing of information. This information is usually derived from shipping agents, freight forwarders and most importantly customs clearing agents / brokers acting behalf of importers or exporters. For the customs to function effectively, information received from these operators must be complete otherwise this will result in processing delays, possible rejection of customs declaration and delays in customs clearance. In this regard all players in the trading sector should playa concerted effort to enable smooth trade facilitation. In a bid to provide faster clearance, the customs embarked on pre-clearances of both imports and exports effective June 1998. In this respect, all goods can be customs-released even before the vessels' arrival, provided the manifest

information with regards to the goods are confirmed and correct at the time of declaration. Prior to this,

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imported goods which were eligible for pre-clearance were dangerous cargo, live stocks, perishables and bulk cargo. Meanwhile, the process for export requires that goods can only be legally exported upon an approval made onto a Customs Export Declaration Form No.2 presented by an exporter or his agent.

5.3 Inland Container Depots (I CDs)The development of inland container depots (ICDs), which has been initiated in many countries, is an important approach to improving the connectivity between the different modes of transport and the efficient consolidation and distribution of goods. This is especially true with the rapidly increasing container traffic in Malaysia and the need to open wider hinterlands to economic development. There is a need to further explore opportunities for the development of ICDs throughout the country where most industrial estates are located.

The development of ICDs in Malaysia features spatial industrial developments in the past which is concentrated in Central Selangor, Central Ipoh, Butterworth, Johar and Nilai. However, the government's policy of encouraging expansion of economic growth to inland regions and the growing outreach of ports in the county has warranted the provision of interior cargo terminals (also known as

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dry cargo terminals).

In addition to this, the development of modern network of inter-state highways and express ways covering almost entire Peninsular Malaysia is also one of the encouraging factors for the development of ICDs. In Malaysia, the establishment of the first inland container terminal in Sungai Way by Kontena Nasional marks the country's bold initiative to support the smooth and efficient flow of cargo. This was followed by Ipoh Container Terminal (IC1), a joint project by KTMB and Port Klang Authority to serve Perak's Kinta Valley economic region. The Padang Besar Container Terminal at the Malaysia-Thai border developed by KTMB services shippers in the northern region and South Thailand. The development of the Nilai Inland Port (NIP), located south of Port Klang was mainly to serve shippers in the south of Klang Valley, industrial areas around

Senawang and Kuala Lumpur International Airport. The development of Segamat Inland Port (SIP) is viewed as strategic as it is at the confluence of the arterial rail link that serves the east and west-coast of Peninsular Malaysia. It will serve as an interchange for the Johor Port and the Tanjung Pelepas Port in the Southern region by providing services to rail bound cargo to and from Thailand.

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All these major ICDs are linked with rail and road and ports in respective locations. This enables a smooth movement in and out and provides 'ready made' storage capacity especially during the critical points (festivals) where major ports could not accommodate a sudden surge in cargo traffic. Since hauliers and freight forwarding companies jointly own some of the ICDs in Malaysia, they also expanded its functions by offering a variety of value-added services.

The five major ICDs are custom approved which means customs services are also provided at their vicinity. Such arrangements enables pre-clearance of cargo before it reaches the port for export and import. Traditionally, customs services have been provided within ports. Apart from this, there are also hosts of other ICDs in Peninsular Malaysia which are run by private enterprises but it does not feature custom services.

5.4 Warehouses/ District parks

Similar to ICDs, warehouses or distriparks that are usually located close to ports have dedicated facilities for cargo handling, storage, allows value-adding and other distribution activities to take place. The

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distriparks convenient location within the port's Free Commercial Zone (FCZ) also enables value-added facilities such as packing and repacking, labelling and assembling, sorting and consolidation. These value-added activities have been carried out completely free of customs formalities. The Distripark at Westport, Northport and the Port of Tanjung Pelepas for instance permits companies to liaise with ports to transfer virtually any type of cargo door-to-door for local and regional customers. This is in line with the Government's objective to promote distributive trade and promote the establishment of international procurement centres by MNCs at national ports. Such centres could provide the critical linkage needed for ports to deepen the development of transhipment traffic.

5.5 Electronic Data Interchange (EDI)

The timely delivery of goods is reliant on the smooth flow of documents. Documents can and do get held up at several intersections in the transport process. EDI systems enable the trade to directly exchange data and expedite the clearance of goods. In order to realise the full benefit from ED I, all the key players in the logistics channels must be integrated electronically into the system. However, full integration has not taken place yet in Malaysia.

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Currently the system is used in Port Klang, K1, International Airport (KLIA), Johor Causeway, the Second Link in Johor, and also the Port of Tanjung Pelepas, which started the EDI system in March 2001. The EDI system in Port I<lang is also known as the Port Klang Community System (PKCS) which has integrated freight forwarders, terminal operators and shipping agents as well as government agencies including the Port I<lang Authority and Customs. As of 2001, a total of 544 companies use the EDI system at Port Klang and KLIA, comprising 410 forwarding agents, 121 shipping agents, 3 port operators, 10 commercial banks and 2 free commercial zone operators. The hauliers are yet to join the system.

Apparently the two terminals at Port I<lang maintain different EDI platforms altogether. The customs on the other hand maintains a completely different ED I system. This complication has led to users of EDI services to submit both hard and electronics copies for their trade transactions. As a result, shippers could not realise the full benefit from the implementation of EDI services at Port Klang. Shippers have complained that they are charged for EDI services, which obviously increase their logistics cost. In contrast, EDI services in other countries do not impose charges on their users except for the initial fund that each player needs to allocate to

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integrate their systems with EDI. Further to this complication, many users also complain that the EDI system at Port Klang is not consistent with international EDI system, resulting in double logging. It does not only incur cost but it also imposes unnecessary delays for the efficient movement of cargo.

5.6 Ports and Terminal Operators

5.6.1 Airport

Airport development is important economically because many companies will not locate factories or offices in cities that do not have adequate airport facilities. The business that airports create is vital to the economy because it provides transport not only for people but also for freight, such as mail, perishable foods and other time-sensitive items. Malaysia has 37 airports including 5 major international airports, 15 domestic airports and 17 STOLports (Short Take-Off Landing airports which serve communities in less accessible areas).

The Kuala Lumpur International Airport (KLIA) has the ability to accommodate as many as 90 to 100 planes an hour, one million tonnes of cargo and 25

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million passengers a year (six times more passengers that its predecessor, Subang) and with the potential for expansion to accommodate 100 million passengers a year and 200 flights an hour.

The airport already has one of the most competitive aeronautical charges in the region including incentives such as competitive parking fees and landing charge waiver for new flights since May 2001. KLIA also boasts an area of about 110 ha for logistics activities. The KLIA's Free Commercial Zone (FCZ) is strategically located 6km away from the passenger facilities. The FCZ at KLIA has all the characteristics of a dynamic and efficient cargo hub both for the country and the region.

Besides supporting the usual activities at the zones, the focus is on adding value to these activities while enhancing related services. It has the systems to ensure the shortest possible turnover time in transfer, storage, service and delivery of inbound and outbound consignments, including faster turnaround time in getting the necessary import and export documentation completed. An integrated network and system also permits KLIA to keep its operational costs as low as possible.

The FCZ is also integrated with other modes of cargo

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operations. It is located only 70km away from Port Klang. Within the radius, it also serves the major industrial centres such as Shah Alam, Nilai and Bangi. Surface transport connection to KLIA's FCZ is also well supported by excellent road networks. KLIA is also able to cater for 1 million tonnes of throughput annually. Plans are also in the pipeline to establish an industrial park within the vicinity of KLIA.

The Government's current focus is to make KLIA the regional aviation hub. In this regard the need to reposition the Malaysian Airline System (MAS) on a stronger footing is recognised by the Government. The national carrier is currently undergoing reengineering exercise to streamline its operations to better reflect its role to serve and promote KLIA as an international hub. To achieve this objective, both KLIA and MAS are seeking to form strategic alliances with other operators and airlines to increase cooperation and connectivity. Negotiations of air services agreement with other countries to increase the number of airlines and flight frequencies into Malaysia and to secure more landing rights for Malaysian carrier are also vigorously pursued to enhance the role of KLIA and MAS. In this regard, a liberal approach including an open skies policy will be adopted in granting traffic rights to increase

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connectivity. This policy however will take into account safeguard measures to ensure market access for the national carrier.

5.6.2 Seaports / Terminals

Seaports are the interface between maritime and inland modes of transport for movement of goods and passengers. In broader terms, ports are single organisational units with multi-dimensional activities integrated within the logistics chain for providing services to maritime trade. The prime objective of a seaport is to provide fast and safe transit of goods and passengers through its facilities at minimal cost.

There are 13 major ports in Malaysia. Of these, three - Northport and Westport in Port Klang and the Port of Tanjung Pelepas in Johor are ranked within Asia's Top 10 in the Best Seaport Category, with Northport taking fifth place after the ports of Singapore, Hong Kong, Kaohsiung and Yokohama. Port Klang and the Port of Tanjung Pelepas handled more than nine million twenty-foot equivalent units (rEUs) of transhipment containers nationwide in 2002. Port Klang is the 12th largest container port in the world while PTP is expected to join the rank among the top 20 container ports in the world in the near future.

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The government is also currently in the process of establishing a single port authority, the National Port Authority (NP A), that will perform regulatory functions to ensure that port operators meet with performance standards and comply with the terms and conditions of the licences issued. Accessibility to ports especially by road and rail links also given priority to promote seamless logistics operations. Similarly, multi-modal transport operations that offer door-to-door services are also given priority. To further enhance port capacity, a comprehensive approach has been adopted to provide supporting ancillary services such as distriparks, bunkering, insurance, customs brokerage and shipping agencies.

5.7 Freight forwarders/International Freight ForwardersMany exporters make their own transportation

arrangements. Others delegate this task, on a fee

basis, to specialised fIrms known as "Freight

Forwarders". These can be either "ocean freight

forwarders or air forwarders", They provide a variety

of services, which has evolved over a period of time.

In the beginning, freight forwarders provide clearing

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and forwarding services as an agent of the shipper. At

the intermediate level, they provide additional

services such as cargo consolidation, road haulage

and customs clearance as a principal. At the final

stage, freight forwarders provide door-to-door

services as multimodal transport operators. Such a

firm can offer a variety of services:

Advising on the best routes and relative shipping costs

Booking the necessary space with shipping or airline

Arranging with the exporter for packing and marking of the goods

Consolidating shipment from different exporters

Handling Customs clearance abroad Arranging marine insurance for the

shipment Preparing the export documentation Translating foreign language

correspondence Scrutinizing and advising on ability to

comply with letter of credit

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According to its size, number of branches overseas, etc., a freight forwarder will offer all or only some of these services. However, all freight forwarders will advise on the booking of shipping space. Many freight forwarders handle both exports and imports and may also act as Customs brokers. In Malaysia they formed industry associations according to sub-sector and states. Among the most active ones are Federation of Malaysian Freight Forwarders (FMFF), Association of Forwarding Agents Port Klang (AF AP), Airfreight Forwarders Association of Malaysia (AF AM), Perak Forwarders Agents Association (PF AA), Penang Freight Forwarders Association (pF AA), Sandakan Forwarders Association (SF A). Among the many issues concerning the role of freight forwarders in Malaysia are the absence of a minimum industry standard which makes it possible for almost anyone to offer freight forwarding or multimodal transport services. In Port Klang for instance, it was reported that there are more than 500 freight forwarding agencies competing and undercutting each other in a bid to lure customers. The lack of regulation has allowed the entry of ill-informed operators who sometime over-charge shippers and have therefore given the industry a bad name. This problem is further compounded by lack of skills among the majority of freight forwarders to handle

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the flow of cargo from the point of origin to the point of destination professionally. International trade requires freight forwarders to be equipped with an extensive knowledge of global cultures, multiple languages, business practices and government regulations. In order to provide a full range of freight forwarding and multimodal transport services itrequires extensive, detailed and up-to-date knowledge of a whole range of issues, such as

regimes of liability and applicable international laws and conventions

contract law trading terms documentary credits customs procedures and documentation quarantine requirements transport arrangements packaging and labeling requirements dangerous goods codes recovery claims and insurance

What this suggests is that lack of comprehensive skills and knowledge can also become the biggest impediment for trade if trained personnel are short in supply in the industry.

5.8 Independent Total Logistics Service Providers

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These particular service providers are also referred commonly as third-party logistics providers (3PLs). In facts, many firms especially in the high technology oriented manufacturing activities in this country show the growing trend of hiring these kind of services. They provide a designed set of customised logistics services, tailored to the exact needs and specification of clients on a third-party basis. They possess enormous capability and financial strength in providing a seamless supply chain management system which integrates all logistics functions.

5.9 Other Significant Trade FacilitatorsIn addition to the key export intermediaries discussed above, there are a host of logistics-enabling agencies and organisation which play an important role in trade facilitation. Banking and insurance provides remarkable payment and recovery systems. The documentary credit for example, enables the seller to be sure that his goods will not pass to the buyer until due payment has been made, while the buyer know that this money will not pass to the seller until the goods are safely in hand. The role of the licensing board for both merchant ships and commercial vehicles is also important to enhance the performance of the logistics sector. Meanwhile, the role of the

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industry and trade associations, which hold consultative sessions with regulators on a periodic basis, is also important to influence the Government's policy direction with regard to trade and logistics matters.

6.0 Conclusion

Malaysia's ability capture the benefits of the globalising economy can he enhanced by an improvement in the organisation of the country's transport systems. There is presently a costly fragmentation of modes of transport - road, sea, rail, air. The results are three-fold: barriers to transport which have to change mode, economic inefficiency and high social and environmental cost. Transport policy in regard must move away from isolated, individual modes towards a cohesive and unified framework for transport systems.

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