Cabotage policy is crucial for sustainable domestic shipping

Cabotage Policy is a policy of great importance to a nation. It refers to the right of a country to regulate transport of goods and passengers by sea within its territorial waters, contributing towards safeguarding a country’s coastal waters, as well as to maintain sustainability of its domestic shipping market.

As a nation, Malaysia has been able to capitalise on its strategic geographical importance in global trade, emerging from an agrarian economy and becoming what it is today – an important trading nation. Having a sizeable maritime domestic market, with several ports serving the international trade, it has grown through the import and export of manufactured goods, strategic commodities such as oil and gas, palm oil and many more industries. However, Borneo is located off major shipping trunk routes, and this is where Malaysia’s domestic shipping sector has served as a key link between the Peninsula and East Malaysia.

Due to all these factors, the need for a cabotage policy cannot be overlooked. It serves as a crucial catalyst for the development of a sustainable maritime ecosystem and capabilities in maritime assets.

Malaysia’s cabotage policy is governed by law, which prohibits non-Malaysian ships from engaging in domestic shipping. Even so, Malaysia has adopted several measures to liberalise this regulation, enabling foreign ships to participate in the domestic shipping market.

It is important to understand that cabotage policy does not prohibit international trade

In conclusion, cabotage is a global norm, adopted by 81% of UN countries with coastlines.