Logistics sector to fare better on eCommerce boom

PETALING JAYA: While global trade is likely to be constrained by stricter carbon-emission regulations, Malaysia’s logistics sector is expected to fare better being a beneficiary of the booming eCommerce and trade diversion on US-China trade tensions.

In a report, Kenanga Research said the United States is now Malaysia’s third largest export destination after Singapore and China as higher US tariffs kicked in. Malaysia would benefit from the trade diversion as global trades reposition themselves around the higher US tariff barriers.

“Note that during the 12-month period of the trade war from February 2018, we saw local listed port operators’ share prices trading sideways except for Bintulu Port Holdings Bhd, which took a dive due to its largest exposure to China, its biggest Liquefied Natural Gas (LNG) export market,” the research house said.

However, Kenanga Research expected Malaysian ports’ container growth volume to remain in low single-digit growth. Its estimates suggest 4% growth for 2026 as Malaysian ports are heavily invested in the intra-Asia trade route, less affected by US tariff surges.

The biggest long-term winner could be Bintulu Port due to its largest exposure to China as its primary LNG export market. Kenanga Research has a “market perform” call on Bintulu Port with a target price of RM5.30 a share, while maintaining a “neutral” stance on the sector overall.

The World Trade Organisation cut its 2026 global merchandise trade volume growth projection to 0.5% from 1.8%, citing higher tariffs and potential Middle-East conflicts. Ongoing trade talks and reciprocal frameworks aim to balance trade, but uncertainty persists. Stricter carbon emission regulations may also further impinge trade growth.

Diversion from the Suez Canal to the Cape of Good Hope has increased voyage durations for the Asia-Europe route, reducing shipping frequency at Westports Holdings Bhd and other regional ports.