Image credit: Maritime Gateway
KUALA LUMPUR (March 20): Numerous Malaysian companies have experienced cancellations and delays in the delivery of goods trade consisting of various types of cargo amid the Red Sea crisis.
This is due to route diversions and difficulties in finding alternative routes which indirectly caused supply chain disruption, according to the Minister of Investment, Trade and Industry (Miti).
The Red Sea is an important trade route that connects Asia to the Mediterranean, the East Coast of the US and Europe. It carries up to 15% of global trade.
Miti shed light on the repercussions of the Red Sea crisis on logistics costs, delivery timelines, and supply chain stability, as Malaysian companies have to opt for longer routes, particularly around the Cape of Good Hope, to circumvent the Red Sea crisis.
Miti said this in a written statement in response to a query posed by Kepong MP Lim Lip Eng last week.
Lim asked Miti about the impact of the Houthi rebel group's actions on commercial ships crossing the Red Sea, as well as potential effects on the Malaysian economy and the measures in place to ensure the safety of Malaysian ships crossing the Red Sea.
Nonetheless, Miti said that the Red Sea crisis is not anticipated to exert a significant impact on the country's economy, primarily because Malaysia's trade is predominantly oriented towards the Asean region and East Asia.
In 2023, trade with Asean and East Asia accounted for 27.3% and 36.1% of Malaysia's total trade, respectively.
Comparatively, trade contributions between Malaysia and Europe, Malaysia and West Asia, as well as Malaysia and North Africa stand at significantly lower levels, accounting for 7.8%, 4.3%, and 0.3% respectively.
Source: https://theedgemalaysia.com/node/705257