KUALA LUMPUR, March 26 — Cargo volumes in the Asian region remain robust amid global geopolitical tensions, driven by China’s market diversification and the ongoing realignment of supply chains to South-east Asia, said MTT Shipping and Logistics Bhd (MTTSL) managing director Ooi Lean Hin.

He noted that the trend is expected to continue over the near term, although the full impact of cargo shifts may take 18 months to 24 months as factories relocate and ramp up production.

“Last year, exports from China to the United States fell by about 30 per cent, while exports from South-east Asia to the US rose 23 per cent, reflecting ongoing supply chain realignment.

“However, production limitations in South-east Asia mean much of this cargo will arrive over the next 18 months to 24 months, driving the next phase of growth,” he said.

Ooi added that this cargo is primarily destined for the Western markets and will be transported via hub ports along the Strait of Malacca.

Impact of West Asia conflict on shipping

On the impact of geopolitical tensions in West Asia and the closure of the Strait of Hormuz, Ooi said shipping issues are largely confined to the Gulf region.

“Malaysian ports, including Westports, have not experienced significant congestion, allowing operations to continue efficiently,” he said.

He emphasised that Malaysia is well-positioned to accommodate the expected growth in cargo volumes in the short, medium, and long term, supported by strong intra-Asia trade and resilient regional economies.

Freight rate trends amid conflict

On freight rates, Ooi said rates spiked immediately at the onset of the West Asia conflict, particularly for shipments to the Gulf, with costs to destinations such as Jeddah rising sharply amid tighter capacity and higher demand.

“A 20-foot container to Jeddah now carries not only increased rates but also war risk premiums due to security threats in the Red Sea.

“However, the Strait of Hormuz disruption has minimal impact on containerised cargo, as most Asia-Europe traffic transits the Suez Canal,” he said.

He noted that some vessels are now rerouted via the Cape of Good Hope and alternative ports in Oman, Turkiye, and the Red Sea, adding approximately two weeks per leg, or up to a month for a full voyage.

This increases fuel consumption, reduces vessel availability, and drives up freight rates, he said.

Charter rates and feeder segment outlook

On charter rates, Ooi said they remain firm amid a persistently tight global vessel supply, further exacerbated by geopolitical tensions.

MTTSL has two vessels coming off charter, with renewal discussions indicating slightly higher rates.

In the feeder segment, covering vessels below 2,000 twenty-foot equivalent units (TEUs) and between 2,000 TEUs and 4,000 TEUs, newbuilding orders through 2030 represent only 38 per cent of vessels due for retirement, highlighting limited supply growth.

He also noted that the International Maritime Organisation’s decarbonisation requirements are expected to further constrain capacity.

“Demand for feeder vessels remains strong, supported by growing intra-Asia trade and feeder services to major transshipment hubs including Port Klang, Port of Tanjung Pelepas, and Port of Singapore.

“Large 20,000 TEU ships are unsuitable for these regional routes, reinforcing the importance of smaller vessels in our fleet,” he said.

MTTSL, which is slated for listing on the Main Market of Bursa Malaysia on April 26, operates a fleet of 26 vessels, including 24 owned, with a total nominal capacity of 29,149 TEUs.

Of these, 15 container ships are operated directly under the company’s service network, while 11 are chartered out to major liner partners.

The company also manages six sets of tugs and barges chartered from third parties and acquired an additional set in January 2026.

It owns 18,026 containers and leases another 5,977 units.

“Our fleet is fully operational. Fifteen ships are run under our own service network while 11 are chartered out to other major liners to support their feeder networks,” he said.

For MTTSL’s IPO exercise, CIMB Investment Bank Bhd is the principal adviser, joint global coordinator, joint bookrunner, managing underwriter, and joint underwriter.

CLSA Ltd and CLSA Securities Malaysia Sdn Bhd are the joint global coordinators and joint bookrunners, while Affin Hwang Investment Bank Bhd is the joint bookrunner and joint underwriter. — Bernama