FMM president Soh Thian Lai said the revised tariff structure of 30%, to be imposed from July 1, could see an increase of between 197% and 243%, the Borneo Post reported.

Such an increase will pose a significant burden on manufacturers already facing cost pressures from global and domestic headwinds.

“This comes at a time when industries are already contending with unresolved external shocks, including the ongoing US tariff threats on Malaysian exports, the expansion of the sales and service tax, and a scheduled restructuring of electricity tariffs.

“The convergence of these cost pressures will deliver a heavy blow to manufacturers and exporters at a critical juncture in Malaysia’s economic recovery, further eroding the country’s export competitiveness,” Soh was quoted as saying.

In April, transport minister Loke Siew Fook said the then 30% increase in port tariffs would be implemented in phases over a three-year period.

A month earlier, FMM had urged the government to postpone the proposed hike, with Soh saying the increase would significantly impact the cost of doing business for manufacturers and transport companies.

Tonight, Soh said that under the gazetted rates by the Port Klang Authority, container handling charges for a 20-foot container, or TEU, will rise from RM300 to RM390 over three phases.

He said the increase could translate into an additional RM1.125 billion in annual costs to industry upon full implementation when taking into account the fact that Port Klang handles around 12.5 million TEUs a year.

Soh said Malaysian ports have traditionally enjoyed a competitive edge due to reasonable cost structures.

With the new rates, however, container handling fees will approach US$120 to US$130 per TEU, similar to rates in Singapore and Hong Kong, but well above Asean neighbours such as Vietnam, Indonesia and Thailand.

“This will erode Malaysia’s value proposition and increase the risk of cargo diversion to competing regional ports,” he said.