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MABR
8,3 A hierarchical cluster analysis of
port performance in Malaysia
Norlinda Mohd Rozar
Universiti Malaysia Terengganu, Kuala Terengganu, Malaysia
194
Mohd Hazeem Sidik and Muhammad Ashlyzan Razik
Received 7 July 2020
Universiti Malaysia Kelantan, Pengkalan Chepa, Malaysia
Revised 29 May 2021
28 December 2021
Saadi Ahmad Kamaruddin
30 January 2022 Universiti Utara Malaysia, Sintok, Malaysia
23 March 2022
Accepted 26 April 2022 Mohd Kholil Ashari Mohd Rozar
Universiti Malaysia Terengganu, Kuala Nerus, Malaysia
Indrianawati Usman
Faculty of Economics and Business, Universitas Airlangga, Surabaya, Indonesia, and
Bandar Ersan Alown
Innovation and Entrepreneurship Center, Middle East Technical University,
Ankara, Turkey

Abstract
Purpose – The term competitive has always been used as a comparison to provide a distinction between two
or more things. Southeast Asia handles billions of tonnes of global seaborne trade annually. Thus, there is a
necessity to look in detail at the performance indicators of port competitiveness on the basis of port
performance.
Design/methodology/approach – This study has categorized 18 Malaysian bulk terminals into two
different classes based on various performance indicators. The distinctions used a hierarchical cluster analysis
by arranging the performance indicators. The technique is among the most popular techniques used to form
homogeneous groups of entities or objects.
Findings – In this study, it was found that two classes were classified as being competitive from the
homogeneous groups created. Based on the performance metrics chosen, Group 1 had the lowest score and
Group 2 had the highest score. It was found that the Westport and Northport of Klang Port had the best
performance of all.
Research limitations/implications – A major challenge for the study is the lack of variables relevant to
other port competitiveness requirements, and a detailed research study is needed to gather information on the
satisfaction of terminal customers, the paperwork involved, the accuracy and consistency of tariffs paid, the
level of safety at sea and on land and environmental protection around the facility site.
Originality/value – The study on ports has been given less attention among researchers in this particular
area. Therefore, this paper focuses on the port terminals in Malaysia and compares port performance metrics
between ports to determine their competitiveness.
Keywords Port performance, Port competitiveness, Scheduling algorithms, Hierarchical cluster
Paper type Research paper

1. Introduction
Seaports are a component of the supply chain that serve as an important link in the
transportation system, facilitating the flow of freight. Malaysia is a renowned nation with some
of the world’s busiest ports. Seaborne trade has grown to 10.7 billion tons and almost half of it
Maritime Business Review
Vol. 8 No. 3, 2023
pp. 194-208 © Pacific Star Group Education Foundation. Licensed re-use rights only.
Emerald Publishing Limited Funding: This research was conducted under the UMT/PPPI/55316). Universiti Malaysia
2397-3757
DOI 10.1108/MABR-07-2020-0040 Terengganu (UMT) provided the research fund.
passed through Southeast Asia (UNESCAP, 2019). In 2019, Malaysia recorded 2.9% transport An analysis
service exports (84,384 million US$) and 4.33% GDP growth (366,828 million US$) from the of port
maritime sectors (UNCTAD, 2021). Over decades ago, Malaysian ports had recorded an average
growth of 3% in cargo throughput (Van der Heide, 2019). The strategic location and its good
performance in
connectivity make Malaysia as a preferred entry point for Southeast Asian companies (Van der Malaysia
Heide, 2019; Chen et al., 2016). Over the last couple of decades, the ports have seen a 400%
increase in container traffic (Van der Heide, 2019). Currently, there are eight federally
administered ports in Malaysia. They are Port Klang, the Port of Tanjung Pelepas, Johor Port, 195
Penang Port, Bintulu Port, Malacca Port, Kuantan Port and Kemaman Port. In East Malaysia,
there are ports administered under the state governments of Sabah and Sarawak. Besides these
ports, there are several privately owned port facilities and jetties throughout Malaysia
primarily for the oil and gas industry, such as in Port Dickson and Lumut (Ministry of
Transport Malaysia, 2022). These seaports support Malaysia’s economy by integrating the
maritime and inland transportation networks (Chen et al., 2016). The leading ports are the Klang
Port and Tanjung Pelepas Port, which are responsible for 64% of Malaysia’s total cargo
throughput in 2018. These two ports contribute to a substantial part of Malaysian
transshipment. Recently, the sustainable growth of Tanjung Pelepas port which cost RM
430 million in investment was highlighted as it prepared for the arrival of the P3 Network or
Maersk Line, CMA CGM and Mediterranean Shipping Co (UNESCAP, 2019). In overall terms,
the performance of other ports has been found to be much lower compared to the port
mentioned. Additionally, port performance indicators are measuring the ports from their
individual competitive advantage (Rezaei et al., 2018).
Malaysia is located right at the heart of region where intercontinental and intra-Asian sea
trade routes meet each other. Yet, Singapore claims the best port in the Southeast Asia and the
world, but there is a very little space for the respective nation to expand and grow. Vice versa,
there are thousands of opportunities for Malaysia ports to grow compared to their proximity
neighbour. Ports have started to compete with one another to be the new node in cost reduction
and performance; this was propelled by the improvements in ocean productivity over the past
several decades (World Bank, 2007). It has led to an increase in port competition resulting from
the liberalization of transportation markets and concentration in the shipping industry (De
Langen, 2007). To support this assertion, De Langen (2007, p. 1) narrated that “port services are
no longer provided in isolation, but need to fit in door-to-door supply chains.” A port is in a
competitive position when port users are presented with a competitive offering relative to other
connected ports. Hence, the nature of competitiveness in a port is heavily dependent on its
distinguishing factors and many other variables, such as policy-related, terminal-specific, chain-
related or scope-related factors (Vanelslander, 2005). In a competitive port environment, it is
crucial to identify the key factors guiding users in choosing a certain port, as this strategically
employed expertise will help port growth and increase its market share.
Additionally, Malaysia has a fair number of small ports on its coastline. The ports compete
for cargo, especially volumes destined for the contestable hinterland of Malaysia. Aside from
that, the ports are also competing to secure regional port status as the volume of cargo increases.
VanDyck (2015) in their study found that ports have been modernizing and expanding their
facilities, thus increasing their competitiveness and attracting more cargo as the hinterlands
become increasingly contestable and less captive. Yet, it was revealed that most Malaysian ports
lack of adequate infrastructure and amenities. This is proven by a low volume of freight handled
by ports. It was added that Malaysian ports’ services are also insufficient to meet consumers’
needs (Jeevan et al., 2015b; Nazery et al., 2012). In a study by Jeevan et al. (2015b), insufficient
railway tracks, unstructured container layout on the train deck, usage of a single mode of
transportation, less acknowledgement from seaports concerning the credibility of ports, rivalry
from seaports and location have all been explored as issues confronting port performance. Still,
there is always room for improvement for Malaysia port performance. Therefore, the main
MABR objective of this paper is to investigate the competitiveness of ports in Malaysia. This study will
8,3 categorize 18 Malaysian terminals into two different classes based on various performance
indicators. This approach allows for an easy comparison of port terminals with different
characteristics and constraints because similar terminals will be grouped together.
This study starts in Section 2 with a brief literature review on port competitiveness and
efficiency. Next, Section 3 discusses the definition of the variables and the methodology used
to classify the terminals in the sample. Section 4 reports the results. Finally, Section 5
196 concludes the paper.

2. Literature review
2.1 Port competitiveness background
As the overall performance of a port greatly affects its competitiveness, many previous works
focused on the terms derived from port productivity and operational efficiency (Cabral and
Ramos, 2014). In the case of Brazilian seaports, Cabral and Ramos (2014) used the average
productivity at terminals/berths to measure port performance. Other than that, there are
other indicators which are used as the proxy for efficiency: waiting time for mooring/loading
(Cabral and Ramos, 2014); freight handling efficiency and port access waiting time and
frequency of calling vessels and port congestion (Rozar et al., 2018; Razik et al., 2015). There
are also additional elements used to determine the quality of port service (Yeo et al., 2016; Kim
and Lu, 2015; Scaramelli, 2010; Van Dyck and Ismael, 2015) and efficiency in documentation
process (Scaramelli, 2010; Jeevan et al., 2015a).
In the studies of Notteboom and Yap (2012) and Chang and Talley (2019), port
competitiveness is defined by the researchers in several ways. The competition between ports
has led to competitive advantage. This is because competitive advantage is attained through the
provision of requirements for ship owners and shippers to choose a port across various
functions. Thus, it can be used as an indicator which develops a countermeasure as it recognizes
the opportunities and threats of the port (Kim and Lu, 2016). Other than that, Parola et al. (2016)
stated that port competitiveness refers to the capabilities of ports that vary from rivals to achieve
their strategic goals, similar to the capability of manufacturers to gain customers and dominate
the markets. This kind of competitiveness evolves the market structure and also increases the
competition from competitors. There are two meanings of port competitiveness: (a) the economic
nature of the port with the intention of making profits and (b) the social nature of the port, which
means that the port is a harbour city and a gateway to foreign trade in surrounding areas where
resources can be reallocated, such as freight, transport vehicles, knowledge, funds and labour
force and so on, in a proper and fair manner, through connections between ports.
A port therefore plays an important role in the pooling of a myriad of resources in the region
and gradually becomes a key part of the harbour city. In this perspective, port competitiveness
can be denoted as the ability to generate a variety of resources and some kind of competitive
advantage over other ports by combining and maximizing key elements and engaging with the
external environment in terms of market positioning and generating value and sustainable
growth in the cycle of market competition. Yeo et al. (2011) mentioned that port competitiveness
is on their port selection criteria. There are multifarious perspectives in a study of port
competitiveness, and in order to evaluate the competitiveness of ports, it is important to define
the components or factors that have or may have an effect on the study. It was emphasized that
the capacity of facilities at the seaport terminals in Malaysia is a key competitiveness factor to
differentiate the level of competitiveness between seaports in Malaysia.

2.2 The key drivers of port competitiveness

First, there is unanimous agreement in a number of previous studies that port costs have
emerged as relevant economic-related drivers of port competitiveness (VanDyck and Ismael,
2015; Yuen et al., 2013; Scaramelli, 2010; Yeo et al., 2016; Seo et al., 2016). For most sectors, the An analysis
quality of goods or services is an important consideration that consumers take into account, of port
especially when choosing a selection of homogeneous items. The cost is among the main
considerations before making a decision, and the lower the port cost, the greater the
performance in
competitiveness. Typically, this happens when the port tariffs (a tax or duty to be paid to the Malaysia
port authority) and costs (i.e. port charges paid to the terminal) constitute a substantial
proportion of the overall costs of transport for ocean and shipper companies. Similarly, most
industries within the maritime sector are able to compare the cost and tariffs of competing 197
ports and choose the most realistic one.
Second, other important drivers are port geographical position and maritime connectivity.
This is critical especially for those players who are responsible for the supply of goods
between manufacturing plants and the ports involved in cargo routing decisions (e.g. ocean
carriers, freight forwarders, etc.). Thus, the strategic location of a port significantly increases
its competitiveness. Specifically, position refers to the “diversion distance” concept where
ships deviate from main trunk routes to the port. The centrality of shipping routes is vital not
only because it acts as a port gateway but also as a hub for transshipment (Yuen et al., 2012;
Scaramelli, 2010).
Third, the endowment of port infrastructures and nautical accessibility are indicated as
other relevant drivers (Burnson, 2020; VanDyck and Ismael, 2015; Razik et al., 2015;
Scaramelli, 2010; Yeo et al., 2016). Commonly, it is accepted that nautical accessibility is
closely connected with port infrastructures (e.g. berth length, water depth, yard spaces, etc.).
In order to meet trade growth and delivering economies of scale in a highly competitive
market, shipping firms have invested in building mega vessels to face unprecedented
operational challenges. Particularly, these are expressed in deeper channel and terminal
water depths, as well as in the search for longer quays and wider terminal areas. This is for
the ports to maintain their competitiveness as it helps in speeding up the pace of the ports.
Moreover, due to continuous expenditure on efficiency improvement in port terminal
infrastructure, Malaysian ports have managed to achieve higher levels of efficiency in port
operation (e.g. cargo handling technology and equipment and port information technology).
Nonetheless, all ports have always been able to perform beyond their current capacity but at
the high expense of capital spending on port facilities and services. Normally, huge quantities
of port trade cause port management to take initiatives to expand port capacity.
Fourth, operational performance is a significant factor for port authorities and port
operators in order to gain a competitive edge. VanDyck and Ismael (2015) evaluated the best
performance maximization approach where the correct balance and compromise should be
reached between the private sector involvement and the port authority’s owners and
regulatory functions. Also, it has been recognized by multiple authors that the quality of port
services is a determinant of competitiveness (Yeo et al., 2016; Kim and Lu, 2015; Scaramelli,
2010; Van Dyck and Ismael, 2015; Razik et al., 2015; Yunan et al., 2017; Puig et al., 2015).
Table 1 illustrates the key drivers of port competitiveness.

3. Research methodology
This research is conducted on 18 ports in the Northern, East Coast, Central and Southern
regions of Malaysia. Since this study is extended from the study of Jeevan et al. (2015a), it is
known that Malaysian ports have been positioned as the main extended gateways of major
container seaports. Table 2 and Figure 1 depict the list of ports in Malaysia. These ports
provide an idea of the size of Malaysia’s ports to derive port performance indicators,
including loading and unloading time, service quality, cost, material handling facility,
stockpile location and trucking efficiency. These performance indicators will be measured for
selection criteria through the data analysis.
MABR Key driver Details References
8,3
Port costs The costs of the port’s customers are based on direct port Yuen et al. (2013), Yeo et al. (2016),
costs, including port, storage and indirect costs on long Scaramelli (2010)
shutdown:
towage, pilotage, mooring dues; cargo handling charges;
dwell time fee; storage costs; terminal charges and fees;
bunkering prices; waste processing dues; cold ironing
198 costs and inland distribution costs
Maritime/port Infrastructure is basic physical and organizational Jeevan et al. (2015a), Scaramelli
(Infrastructure and structures needed for the operation of a society or (2010)
superstructure enterprise
Basic port: usually has a port entrance, sea locks,
protective work (including breakwaters and shore
protection) and can easily access the port for inland
transport
Operation port infrastructure: roads, tunnels, bridges
and locks in the port area. operation port infrastructure
also has quay walls, jetties and finger piers
Port superstructure: paving and surfacing, terminal
lighting, parking areas, sheds, warehouses and stacking
areas, tank farm and silos, office and repair shops
Port service quality Port service quality consists of items related to outcome, Yeo et al. (2016), Kim and Lu
process, management, and image and social (2015), Scaramelli (2010), Puig
responsibility such as et al. (2015)
vessel turnaround time, vessel waiting time, speed of
cargo, handling, frequency of sailings, quality
management/policies;
reputation for cargo damage/loss/theft/pilferage; delays
in cargo;
handling/customs inspections; port/terminal congestion;
transhipment capabilities; bunkering-fresh wate-ship’s
product;
services; waste management; terminal productivity
Operational efficiency The port’s ability to effectively use all its resources for Scaramelli (2010), Razik et al.
high outputs (e.g. turnaround time, ship waiting times (2015)
due to congestion, the efficiency of cargo handling, etc.)
Labour quantity/productivity: annual/daily operation,
flexibility of working hours, power of trade unions, skills
and professionalism of labour, provision of 24/7 service
Authorities Port authorities have statutory duties to meet social and Scaramelli (2010), Puig et al.,
environmental obligations whilst embedding the (2015), Yeo et al. (2016)
corporate social responsibility (CSR) concept in port
management systems and undertaking routine
operations and development projects commercially
Government policies: government local/regional/national
intervention, port authority intervention; management
structure
Private sector involvement: environmental
responsibilities; environmental standards
Implementation: relationship port-city, environmental
compensation provisions
Port geographical location Geographical location has an expansive definition and Yuen et al. (2013), Scaramelli
refers to the port’s geographical positioning in relation to (2010)
transportation networks, inland markets, inland
transport infrastructures and logistics centres
Table 1. Other Reputation, reliability, preferences of lines/shippers, Scaramelli (2010), Yeo et al. (2016)
The key drivers of port promotion and marketing, customer relationships, fast
competitiveness and efficient problem-solving and reporting
No. Port Region
An analysis
of port
1 Sandakan Port Sabah performance in
2 KK Port
3 Kudat Port Malaysia
4 Labuan Port
5 Bintulu Port
6 Tawau 199
7 Lahad Datu
8 Tg Manis Sarawak
9 Kuching
10 Sarikei Port
11 Sibu Port
12 Kuantan Central
13 Kemaman East Coast
14 Johor Port Southern
15 Penang Port Northern
16 Lumut
17 North Port Table 2.
18 Westport Western The list of ports in
Source(s): Razik et al. (2015) Malaysia

Figure 1.
Ports in Malaysia
Source(s): Ministry of Transport Malaysia (2022)

3.1 Cluster analysis

Cluster analysis is an exploratory analysis that tries to identify structures within the data.
Cluster analysis is often referred to as segmentation analysis or taxonomy analysis.
Specifically, it attempts to classify homogenous groups of cases if the classification is not
previously identified. In an exploratory study, there is no distinction between dependent and
independent variables. The different cluster analysis methods that SPSS offers can handle
binary, nominal, ordinal and scale (interval or ratio) data. In addition, R statistical computing
project or average is used to validate the clustering. Clustering analysis is commonly used
together with other analyses, such as discriminant analysis (Shengrong et al., 2010).
Researchers must be able to interpret the cluster analysis on the basis of their interpretation
of the data in order to assess whether the findings of the analysis are actually relevant.
MABR In the literature, the hierarchical cluster is among the most common methods in research. It
8,3 generates a series of models with cluster solutions from 1 (all cases in one cluster) to n (each
case is an individual cluster). The hierarchical cluster deals with variables instead of cases; in
a manner that is similar to factor analysis where it can cluster variables together. In addition,
hierarchical cluster analysis can handle nominal, ordinal and scale data; however, it is not
recommended to mix different levels of measurement. Moreover, clustering is done in two
steps where grouping is done by running preclustering first and then by running hierarchical
200 methods. As it uses a quick cluster algorithm upfront, huge sets of data can be managed
where it would take longer for hierarchical cluster methods to compute. In a two-stage cluster,
scale and ordinal data can be treated in the same way, and the number of clusters can be
automatically selected. As in Table 2, the main objective is to classify 18 Malaysian terminals
into different groups according to competitive criteria available for ports.
In comparison, Cabral and Ramos (2014) in their study on 18 Brazilian ports employed
three distinct groups according to nine competitiveness criteria, including port tariffs, berth
depth and delay time for mooring using cluster analysis. In another study in China, the
competitiveness of ten coastal ports in China was assessed by Shengrong et al. (2010) using a
combined cluster and the Technique for Order of Preference by Similarity to Ideal Solution
(TOPSIS) test model in the classification of seaports by their competitiveness. Similarly,
Sayareh and Alizmini (2014) also used TOPSIS and analytic hierarchy process (AHP) where
they found that the working time, stevedoring rate, safety, port entrance, sufficient draft,
capacity of port facilities, operating cost, number of berths, ship channelizing and
international policies are critical factors for selecting a container seaport in the Persian Gulf.
In this study, the ports were classified into different groups (inter-group) according to
some competitive criteria selection forming clusters of ports with similar characteristics
(intra-group) using clValid package, and it was a validation measure for clustering results by
a statistical method.

3.2 Selection criteria for port competitiveness

The available selection criteria and their definitions are shown in Table 1. However, only four
out of seven key drivers were selected for this study. Each key driver’s details were surveyed
using quantitative data collection. Also, the statistics related to the sample are summarized in
Table 3. Table 4 lists the top ten (out of 39) drivers in competitiveness criteria: Loading/
unloading cost reduction; material handling facility efficiency improvement; flexibility
(loading) improvement; labour improvement; stockpile location improvement, trucking
efficiency improvement, loading/unloading processing time reduction; loading/unloading
lead time reduction; loading work-in-process reduction and service quality (loading)

Variable
Input Output

Port cost Loading/unloading cost reduction

Port infrastructures Material handling facility efficiency improvement
Flexibility (loading) improvement
Operational efficiency Labour improvement
Stockpile location improvement
Trucking efficiency improvement (less than 15 min)
Table 3. Loading/unloading processing time reduction
Variables used for Loading/unloading lead time reduction
measuring Malaysian Loading work-in-process reduction
port competitiveness Port service quality Service quality (loading) improvement
 Descriptive statistics
An analysis
Variable Description Mean Std. deviation N of port
performance in
BS Berth size (m) 524.7222 341.02593 18
BB Bulk berth multipurpose) 43.6111 29.79368 18 Malaysia
CB Container berth 29.1667 25.90991 18
LCB Liquid chemical berth 24.7222 31.55165 18
PB Passenger berth 2.5000 7.71744 18 201
LV Loading (to vessel) 57.7778 13.95605 18
UV Unloading (from vessel) 42.2222 13.95605 18
Iron Iron ore 17.5000 16.47190 18
Fertilizer Fertilizer 6.1111 3.23381 18
Coal Coal 5.0000 3.42997 18
Maize Maize 5.0000 3.42997 18
Wheat Wheat 5.0000 3.42997 18
SP Steel pipes 5.8333 6.47393 18
ISP Iron and steel products 6.3889 5.37028 18
CKDV Completely knocked down (CKD) vehicles 6.9444 8.76807 18
HC Heavy cargo 7.7778 7.90053 18
ST Sawn timber 24.4444 25.14013 18
LNG Liquefied natural gas (LNG) 6.3889 18.21486 18
PO Palm oil 4.7222 18.82366 18
L Labour 52.5000 17.84327 18
M Machines 47.5000 17.84327 18
BWL Bucket wheel loading 7.5000 6.00245 18
CG Clamshell grabs 8.0556 5.18450 18
LS Loading spouts 9.4444 5.91332 18
MHC Mobile harbour cranes 21.9444 7.88500 18
CVY Conveyor 26.1111 7.77544 18
CLO Conventional labour oriented 19.7222 15.76222 18
PG Pipeline grabs 5.5556 16.52884 18
H Hooper 1.1111 3.23381 18
CRA Cranes 0.5556 2.35702 18
Lorry Lorry 50.0000 5.94089 18
Truck Truck 46.6667 4.85071 18
Railway Railway 3.3333 7.66965 18
Less than 15 Trucking efficiency <15 min 40.8333 22.63846 18
From 15 to 30 Trucking efficiency 15–30 min 43.6111 22.01641 18
More than 30 Trucking efficiency >30 min 15.5556 8.20489 18 Table 4.
Less than 1 Stockpile locations < 1 km 18.8889 13.12335 18 Criteria selection for
From 1 to 3 Stockpile locations 1–3 km 15.5556 13.81484 18 measuring port
From 3 to 5 Stockpile locations 3–5 km 13.0556 15.15982 18 competitiveness and
From 5 to 10 Stockpile locations 5–10 km 6.9444 4.89264 18 summary of statistics
More than 10 Stockpile locations >10 km 5.0000 3.83482 18 for the sample

improvement. The key for selecting these factors is based on the weight of percentage and
shown as in Table 4 and Figure 2.

4. Results
This technique enables us to construct a cluster hierarchy where the results presented in a
dendrogram can easily be displayed to show which ports are part of what group as in Figure 3.
By using a hierarchical algorithm, the number of clusters was first calculated to be three. To
achieve the desired number of clusters, the dendrogram obtained can be terminated at a specified
height. Nevertheless, the methods of agglomeration have also been tested (see Figure 4).
MABR
8,3

202

Figure 2.
Percentage of total
gross for criteria
selection in measuring
port competitiveness

5. Discussion
The goal of a cluster analysis is to identify groups in which there are large similarities among
individuals within each group formed (intra-group) but large differences from the other
groups of individuals (inter-group). Thus, several routines were run in R using the clValid
package applying K-means, the hierarchical algorithm, all of them varying from three to four
groups each time. The hierarchical average is composed of nine variables and 18 port
terminals. The results showed us that the best algorithm is Hierarchical 2, i.e. it identified two
distinct groups of terminals. Within each cluster, the terminals are similar to one another or
have similar port competitiveness. In comparison, the terminals in the other groups have
differences in competitiveness.
The hierarchical cluster analysis uses average or single agglomeration in the dendrogram
(that provides the same clustering groups). The groups formed by this approach are shown in
Figure 3. Table 5 shows the numbering used for each group suggested by the dendrogram, while
Table 6 presents the mean values for the competitive selection criteria in each of the two groups.
Next, we present an analysis of the results for the components of competitiveness in each group.

5.1 Group 1
Group 1 consists of 16 terminals as shown in Table 7. Among these terminals are the lowest
values for six of the competitive criteria: material handling facility efficiency; loading/
unloading time reduction; trucking efficiency improvement and service quality (loading). It
was also found that the ports are still conventional labour oriented, and some of the ports are
still taking more than 30 min in trucking efficiency.
It is already clear that the terminals of this category have similar characteristics to those of
the competitiveness criteria chosen in this study. Despite the variations between the types of
 An analysis
of port
performance in
Malaysia

203

Figure 3.
Dendrogram using
average linkage
(between groups)

Figure 4.
Percentage of total
gross weight in bulk
terminal
MABR Stage cluster first
8,3 Stage Cluster combined Coefficients appears Next stage
Cluster 1 Cluster 2 Cluster 1 Cluster 2

1 3 6 6000.000 0 0 5
2 2 13 7150.000 0 0 6
3 8 16 9500.000 0 0 11
204 4 10 12 11101.000 0 0 9
5 3 11 12016.000 1 0 13
6 1 2 13325.000 0 2 10
7 9 15 13600.000 0 0 10
8 4 5 13800.000 0 0 13
9 7 10 15890.500 0 4 11
10 1 9 19741.667 6 7 12
11 7 8 26419.000 9 3 14
12 1 14 28500.000 10 0 14
13 3 4 38408.667 5 8 15
14 1 7 76182.733 12 11 15
Table 5. 15 1 3 177058.000 14 13 17
Agglomeration 16 17 18 243831.000 0 0 17
schedule 17 1 17 780998.875 15 16 0

Selection criteria of competitiveness Group 1 Group 2

Loading/unloading cost reduction 4 5

Material handling facility efficiency improvement 3 8
Flexibility (loading) improvement 6 7
Labour improvement 5 4
Stockpile location improvement 4 8
Trucking efficiency improvement 5 8
Less than 15 min
Table 6. Loading/unloading processing time reduction 4 5
Mean values of Loading/unloading lead time reduction 4 5
competitiveness Loading work-in-process reduction 4 5
criteria by groups Service quality (loading) improvement 5 7

loads that multi-use terminals have compared to specialized terminals, it should not be
assumed that such terminals are more effective and have superior efficiency inside or outside
this category. It is likely that a specific terminal is productive even though it is not advanced
and/or makes demand for containerized cargo. But it cannot be concluded that small
terminals, even with higher port tariffs, are less profitable than large terminals. Small
terminals do not have much opportunity for competitiveness as a limited number of container
ships are being shipped and their infrastructure is only adequate to provide good service to
other cargo.

5.2 Group 2
As shown in Table 7, two ports are part of this group: the Westport and Northport of Port
Klang. These ports have intermediate values for competitiveness criteria (Table 5), and they
are noteworthy for the number of containers moved in 2009, taking first place in the
Malaysian rankings (Figure 3). In addition, this group also has higher values than terminals
from Group 1 for all competitive parameters. The waiting time for trucking has contributed to
Group Port/Terminal
An analysis
of port
1 Kudat Port performance in
Tg.Manis
Sarikei Port Malaysia
Labuan Port
Bintulu Port
Kuantan 205
Lumut
Johor Port
Sibu Port
Kuching
KK Port
Tawau
Sandakan Port
Kemaman
Penang Port Table 7.
Lahad Datu The name of ports
2 Northport categorized into Group
Westport 1 and Group 2

a substantial score for efficiency with less than 15 min, and the stockpile location is less than
3 km compared with the other ports. It is also a fact that the Westport terminal (the Port of
Klang) is the best performing compared with all the terminals in Malaysia. It has also been
predicted that the Port Klang will be an attractive alternative hub in the future. During the
first seven months of 2017, the port’s overall trade value reached RM 1 trillion. This is the
highest pace ever compared with RM 1.48 trillion in 2016. Also, during the first eight months
of 2017, Port Klang’s total indigenous production rose by 5.5% from 2.70 million Teus in 2016
to 2.85 million Teus (News Straits Times, 2017).

6. Conclusions
This study categorized 18 ports in Malaysia into three distinct classes using the hierarchical
cluster framework based on competitiveness criteria. Among the attributes of each group
created, we note that the competitive requirements of the 16 terminals in Group 1 are not
much lower than the two other ports. Particularly, there are numerous terminals specialized
in container handling, and they also have a heterogeneous cargo profile. Therefore, the
average criteria for competition in the group are also higher than in Group 1. Group 2 consists
of three midrange terminals only with higher values than Group 1 but lower than Group 2.
Finally, Group 2 provides the largest terminals in Malaysia, which have specialized in all
requirements and have excellent output.
Additionally, it is often unnecessary to make major investments in equipment for small
terminals to make them more efficient or even to increase productivity as they receive low
demand for container lots, i.e. the terminals have their own unique characteristics and freight
profile to maximize their performance and charge lower tariffs.
Another challenge is the lack of variables relevant to other port competitiveness
requirements, and a detailed research study is needed to gather information on the
satisfaction of terminal customers, the paperwork involved, the accuracy and consistency of
tariffs paid, the level of safety at sea and on land and environmental protection around the
facility site. Another factor that deserves special consideration is the number of variables
involved in our research.
At this point, it is also important to emphasize that any cluster solution is likely to be
matched to other port databases if one has a group of terminals whose performance is
MABR compared to other terminals with similar characteristics and performance limitations. In this
8,3 case, it is highly recommended that this technique to be replicated in many ports around the
world. As competitiveness is associated with a sustained ability to maintain production at
increasing rates, it is expected that both the emphasis on containerized freight transport and
the investments announced by the PAC (growth acceleration program) in the Malaysian
transport sector would contribute to the achievement of the best indicators of port
productivity.
206 In terms of competitiveness, Westport and Northport have the highest ratings for port
services and infrastructures. The ports also concentrate on attracting cargo from the Southeast
Asia area. Therefore, Malaysian ports are anticipated to remain rapidly increasing in
competitiveness with a steady increase in overall trade. The Malaysia Shipping Council has
also been established to revitalize the Malaysian shipping industry (New Strait Times, 2017).

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Further reading
Ha, M.H., Yang, Z., Notteboom, T., Ng, A.K. and Heo, M.W. (2017), “Revisiting port performance
208 measurement: a hybrid multi-stakeholder framework for the modelling of port performance
indicators”, Logistics and Transportation Review, Vol. 103, pp. 1-16.

Corresponding author
Norlinda Mohd Rozar can be contacted at: [email protected]

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