Daiken hires a cargo ship to solve logistical challenges

KUCHING: The transportation problems between Malaysia and abroad has prompted the Japanese company Daiken Corp to hire a cargo ship to bring its medium-density fiberboard (MDF) manufactured in Sarawak to Japan.

With the chartered cargo ship, Daiken can ship the MDF directly from Sarawak to the port of Yokkaichi in Japan without having to call at another port for the first time.

“Due to a delay at a transshipment port, many MDFs are unshipped, which has affected sales in Japan. The problem of transshipment in Malaysia affects two companies called Daiken Sarawak Sdn Bhd and Daiken Miri Sdn Bhd that manufacture MDF from tropical hardwood,” according to Japan Lumber Reports (JLR).

According to the Handelsblatt, container ships from Sarawak usually stop at the port of Johor Baru to tranship goods to Japan. There are also delays in the handling of timber products in other ports such as Kaoshiung or Taipei (Taiwan), Busan (Korea) and Shanghai (China).

Sarawak exported 179,786 cubic meters (m³) of MDF valued at RM333.6 million (Free On Board Value) in 2021. The bulk of the exports, or 115,493 m³ worth RM225.9 million, went to Japan Development Corp., according to Sarawak Timber Industry export data.

Last month, Daiken chartered a 9,000-ton vessel “Apollo Beni” to ship 3,000 cubic meters of plywood and 6,000 cubic meters of MDF from Indonesia to Nagoya via Yokkaichi Port. Due to the direct journey, it took only two weeks instead of the usual month for the wooden products from Indonesia to reach Japan.

According to JLR, securing shipping space on the (Malaysia) Sarawak-Japan route was difficult, and even when tropical timber was available, there was no way to transport the timber to sawmills in Japan.

“Some (importers) transport Malaysian logs through Taiwan. Due to the difficulty of obtaining containers, some orders are delayed by a month,” added the report, reproduced in the International Tropical Timber Organization’s Tropical Timber Market Report.

In addition to difficulties in securing shipping space and empty containers for loading goods, Japanese importers have reportedly been struggling with soaring sea freight since the outbreak of the Covid-19 pandemic around two years ago.

Commenting on Sabah’s recent decision to resume exports of tropical timber following the ban imposed four years ago, JLR said many Japanese companies are not “really interested”.

It was reported that since last month, Sabah authorities had allowed up to 20% of harvested logs from natural forests to be exported in a year. The Sabah government banned the export of logs in May 2018.

Before the ban, Japan was a major importer of tropical timber from Sabah. Of 146,806 cubic meters of tropical logs imported from Japan in 2017, about 71,202 cubic meters or 48.5% came from Sabah.

“After Sabah banned log exports in 2018, Japan looked to another source, Papua New Guinea. But it didn’t work because Papua New Guinea announced it would also ban the export of logs.

“All these factors have led a Japanese plywood company called Daishin Gouban Kogyo in Japan to stop producing plywood from tropical logs. This is the last major South Sea (tropical) log consumption facility,” added JLR.

According to the report, the supply of tropical logs in Japan has shrunk as the total volume fell to 20,871 cubic meters in the first 11 months of 2021.

“There is still uncertainty as to whether the logs will be exported from Malaysia as Covid-19 is already spreading in Malaysia and there is a shortage of labour. As such, many Japanese companies are not really interested in resuming exports of tropical timber from Sabah,” JLR said.

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