Govt Taking Targeted Measures To Narrow Trade Deficit In Transportation Services Sector

SUBANG JAYA, July 15 (Bernama) -- The government is adopting a targeted approach to narrow the country’s trade deficit in the services sector, particularly in transportation services, said Transport Minister Anthony Loke Siew Fook.

He emphasised that this can be achieved by strengthening high-performing local industries and expanding export-oriented capabilities, especially in the oil and gas services sector.

While acknowledging that Malaysia continues to record a deficit in its transportation services due to its heavy reliance on international shipping liners, Loke said structural limitations in the container shipping industry remain a key challenge.

“Most of our exports and imports rely on foreign shipping lines, as we do not have a strong international container shipping industry. Although there are local shipping firms, they primarily serve the domestic market,” he told reporters after officiating Malaysia Maritime Week 2025, here today.

Loke said that global shipping is currently dominated by a few major players following a wave of consolidation, making it difficult for smaller or emerging economies like Malaysia to compete in the international logistics arena.

However, he said the government is not standing still. Efforts are being made to narrow the deficit by boosting sectors where Malaysia has strong domestic capabilities.

“For example, in the oil and gas sector, we have competitive local companies. By expanding our services in this area, including the use of local oil tankers for international operations, we aim to increase our service exports and reduce the trade gap,” Loke added.

The move, he said, aligns with the broader national strategy to enhance Malaysia’s services trade performance, tap into niche maritime capabilities, and gradually strengthen the country’s balance of payments (BOP) position.

In his speech, the minister noted that the country's BOP in the first quarter (1Q) of 2025 saw the transport services account remain a key component of the services deficit. 

He said the transport account registered a larger deficit of RM9.3 billion in 1Q 2025, compared with a deficit of RM8.0 billion in the previous quarter, mainly contributed by the maritime transport service sectors, especially the ocean freight fraction.

"For Malaysia, the maritime BOP highlights a core economic paradox: it is a world-leading trading nation with globally ranked ports, yet it has a structural dependency on foreign shipping to carry its trade. 

"This leads to a persistent and significant deficit in its sea transport account, which is a major contributor to the overall services deficit," Loke explained.

He said about 96.4 per cent of Malaysia’s trade is transported by sea.

According to the latest data from the Department of Statistics Malaysia (DoSM), the services sector experienced a year-on-year growth of 5.0 per cent in 1Q 2025. 

The main driver of this growth was the transportation and storage sub-sector, which expanded by 9.5 per cent, supported by high demand for ocean freight, ports, and logistics services -- reaffirming Malaysia's vital role in regional and global supply chains.

-- BERNAMA