With its prime position at the heart of major Asian trade routes, Sabah could become Malaysia’s leading logistics hub. Yet, outdated infrastructure and sluggish policies are holding it back.
Industry players say that if the state addresses these gaps, Sabah could unlock billions in foreign investments.
“The world is moving fast. Without the right infrastructure and policies, Sabah risks being left out of global supply chains,” said transportation expert Ramli Amir.
“We need ports that can handle modern demands, and we need them now.”
“If we build a world-class port in Lahad Datu, we’ll create a ripple effect across industries. But if we don’t act fast, other countries will capture the opportunities we’re missing.”
Ramli is the former President of the Chartered Institute of Logistics and Transport (CILT) Malaysia and Vice-President of CILT International for Southeast Asia.
The seaport bottleneck
Sabah’s logistics sector revolves around the Sapangar Bay Container Port, but the port is no longer sufficient to meet the demands of today’s global trade.
“We need a deep seaport capable of handling mega-ships and increased trade volumes,” Ramli said.
He pointed to Lahad Datu as the most viable location for such a development. Strategically positioned along vital shipping routes, Lahad Datu has the potential to transform Sabah’s trade outlook.
“If we build a world-class port in Lahad Datu, we’ll create a ripple effect across industries,” he added. “But if we don’t act fast, other countries will capture the opportunities we’re missing.”
Policy stagnation is holding Sabah back
While infrastructure upgrades are critical, they won’t matter if Sabah’s policies remain rigid and outdated. Investors today are drawn to locations that offer fast processes, transparent governance, and attractive incentives.
Ramli compared Sabah’s approach to Indonesia’s new capital, Nusantara, which is already attracting foreign investors with its proactive policies and tax breaks.
“Look at what Indonesia is doing — they’re not just building infrastructure; they’re making it easy for investors to do business,” he said. “Sabah needs to follow suit or risk being sidelined.”
Supply chain shifts: A new opportunity
Global supply chains are evolving, driven by geopolitical tensions and lessons from the COVID-19 pandemic. Companies are diversifying their operations, and Sabah’s location makes it an ideal logistics gateway to Southeast Asia.
“Businesses are looking for alternative hubs,” Ramli said. “Sabah can be that alternative, but we need to offer more than just location. We need speed, efficiency, and reliability.”
Can the Sabah Logistics Council drive change?
The Sabah Logistics Council (SLC) has been touted as a platform to unite the government, private sector, and investors in addressing these challenges. But many remain sceptical about its impact.
Ramli believes the SLC could drive meaningful reforms, provided it avoids becoming another forum for unproductive meetings.
“We don’t need more talk. We need action,” he stressed. “Develop Lahad Datu, digitise supply chain processes, and adopt ESG-aligned policies to attract global businesses. That’s what Sabah must do now.”
Sabah at a crossroads: Act or be left behind
The clock is ticking for Sabah. Without decisive action, the state will continue to miss out on trade and investment opportunities.
“Potential alone doesn’t bring in revenue,” Ramli said. “We need future-proof infrastructure and an investor-friendly environment. These are critical, not optional.”
Sabah’s chance to rise as a regional logistics hub is within reach. The question is whether the state will seize the moment — or watch others take the lead. – January 12, 2025.
