Location is key for PTP’s free zone

THE free zone at the Port of Tanjung Pelepas in southern Johor, Malaysia, has been successful in attracting many of the top names in logistics.

As primarily a transhipment port, the free zone is a way for PTP to build up its local cargo base - leveraging on its position close to the major industrial areas of southern Malaysia.

“In 2007, we successfully doubled the number of new customers in our free zone compared to the previous year and we now have over 50 global brands operating a diverse range of business activities within our free zone,” said Harun Johari, chief executive of PTP.

To date, the free zone has attracted M$3bn ($926m) in investments and in 2007 it generated 20% more cargo than the previous year. Among the companies currently operating their warehouses within Pelepas free zone are APM Global Logistics, Schenker Logistics, BMW Distribution Centre, Keppel Logistics and Panasonic.

PTP’s free zone seeks to take advantage of the strategic location the port has at the crossroads of southeast Asia next to the Malacca and Singapore straits.

“The strategic location of PTP just off the international trade routes and right in the middle of the busy southeast Asian markets makes it ideal as a logistics and distribution centre for regional and global markets,” said Mr Johari.

The port also sees an advantage in that the free zone is run by the port as a private company rather than by a government body, as with most similar facilities around the world. “PTP is one of the very few ports in the world that administers its own free zone,” said Mr Johari. “Customers need to deal with only with one party on any matters pertaining to the free zone or port operations. As such, any issues faced by the customers can be better managed.”

Being located next to the terminal, it takes just four minutes on average for containers to move from the ship to the free zone.

While the free zone has helped build a local cargo base for the port itself, tenants are not restricted to using the port for sea transport links. There are even systems in place for the transport of cargo to and from the port’s neighbour and competitor Singapore, with an exemption from levies that would normally be charged.

“Customers also enjoy the benefit of seamless connectivity of their cargo as they have the option of using other ports like Johor Port or PSA [Singapore], or even airports like Senai, Kuala Lumpur International Airport or Changi as the entry or final exit points for their cargo,” said Mr Johari.

The upcoming Iskandar Development Region in Johor is set to further boost PTP’s business with both the free zone and the port linking in to this major initiative to attract businesses to the area.

“We foresee that as the IDR progresses, more business activities will be generated, leading to PTP having an increased role as a gateway port,” added Mr Johari.

Source: American Shipper