KUALA LUMPUR (April 22): Malaysia’s ports-and-logistics sector is expected to see a sharp decline in order volumes amid uncertainty over international trade, Maybank Investment Bank (Maybank IB) warned in cutting the industry outlook.

While the sector will get a temporary boost from frontloading during the 90-day suspension of reciprocal tariffs, the increase will be insufficient to offset the significant decline in China’s containerised export volumes, the research house said.

“While near-term may offer a fleeting volume uplift, persistent uncertainty and elevated costs are shaping a more challenging outlook for the sector,” Maybank IB said in downgrading the sector to “neutral”, from “positive”.

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The research house has placed both Westports Holdings Bhd (KL:WPRTS) and Swift Haulage Bhd (KL:SWIFT) on “hold” calls.

The US has paused its sweeping reciprocal tariffs for 90 days, while imposing an interim 10% tariff on all trading partners.

However, the series of US flip-flops have sent both exporters and importers into a tailspin, as they attempt to stay ahead of the trade policy changes. Last week, the World Container Index declined 3% from a week earlier.

Logistics providers are contending with erratic order flows and limited shipment visibility, which have made supply chain planning increasingly challenging, Maybank IB said. At the same time, signs of strain on infrastructure are becoming more apparent, it noted.

Frontloading activities will likely continue after being brought forward from the traditional peak shipping season that usually starts in May, helping to keep container freight rates rising in the second quarter, the research house said.

But downside risks persist into the second half of the year, including from softening demand due to frontloading exhaustion and a potential slowdown in US-China trade flows, both of which could weigh on container freight rates, Maybank IB added.

For investors still seeking exposure to the sector, the research house prefers Westports for its strategic role as both Malaysia’s main import-export gateway and a key regional transshipment hub.