IMPACT OF COVID-19 ON MALAYSIAN DRY BULK BUSINESS

Abstract

During the COVID-19 pandemic, international cross-border restrictions were implemented worldwide. In Malaysia, it was anticipated that the Movement Control Order (MCO) would negatively impact the maritime business as badly as it would on most other economic activities in the country. However, the lockdown in Malaysia, which aimed to “restrict movement”, “reduce contact” and further “isolate the virus”, did not impact maritime business as much as other industries. In fact, the maritime waterways remained the main artery to transport essential goods nationwide during the pandemic. This paper analyses the impact of the pandemic on the maritime business in Malaysia by studying the commercial and technical aspects. Primarily, the paper focuses on dry bulk trade, container business, port infrastructure, and parties involved in the maritime supply chains. It finds that the impact of the pandemic was minimal, and certainly not as prominent as anticipated; in fact, the Baltic Dry index touched a new high during this period. This paper uses secondary data and draws on the analyses of the Baltic Dry Index, Platts Report by S&P, and Review of Maritime Transport by the United Nations Conference on Trade and Development. The paper is divided into three sections: The changes in selected maritime sectors before and during the pandemic, the factors affecting dry bulk market growth in Malaysia, and the lessons learnt and corresponding recommendations to improve Malaysian maritime business post-pandemic.