MTT Shipping finds sweet spot in feeder niche

MTT Shipping finds sweet spot in feeder niche in International Shipping News 29/04/2026 MTT Shipping and Logistics Bhd, set to debut on Bursa Malaysia’s Main Market on April 21, is in a sweet spot: the group operates in one of the most overlooked segments of global shipping, where demand shows no signs of letting up. Unlike global liner giants such as MSC, Maersk, CMA CGM and Cosco, the Malaysian carrier serves in the container feeder market. This niche covers short-haul or “last-leg” routes between smaller regional ports and major hubs like Singapore, Port Klang and Port of Tanjung Pelepas (PTP). The segment, typically involving vessels below 3,000 TEUs (20-foot equivalent units), has long suffered from underinvestment and an ageing global fleet. MTT Shipping operates 26 vessels with capacities ranging from 415 to 1,836 TEUs, primarily serving routes between Peninsular Malaysia and Sabah, Sarawak and Brunei. It holds a 46% share of Malaysia’s container liner cabotage volume, making it the country’s largest container shipping operator by fleet size, comprising both owned and chartered vessels. Its initial public offering (IPO) comes at a time of heightened geopolitical uncertainty, with disruptions in the Middle East pushing oil prices higher and altering global trade routes. MTT Shipping managing director Ooi Lean Hin remains unfazed. “The world is very short of vessels today, particularly in the feeder segment. Years of underinvestment have created a widening gap between ageing ships that need to exit the market and insufficient newbuild orders,” he tells The Edge in an interview. While demand in the US and Europe has softened under inflationary pressure and weakening industrial competitiveness, intra-Asia trade flows remain resilient. “These emerging markets need more smaller ships,” Ooi says. Long-term structural shifts are also reshaping the industry. Supply chain realignments, driven in part by tensions between the US and China, are expected to increase intra-Asia cargo volumes as manufacturing bases relocate. This shift, which typically takes 18 to 24 months to be reflected in shipping demand, is likely to boost the need for feeder services linking manufacturing bases to regional transhipment hubs along the Strait of Malacca, Ooi notes. At the same time, China’s efforts to diversify its export markets are accelerating cargo flows within Asia, reinforcing the role of smaller vessels. While larger ships dominate long-haul East-West routes, they are ill-suited for regional networks. “Feeder ships are essential to bridge that gap,” Ooi says. Supply constraints and environmental rules Environmental regulations are also reshaping industry supply. New emissions rules from the International Maritime Organization are forcing older, less efficient vessels into retirement. However, replacement capacity is not keeping pace. Global shipyards are operating close to full capacity, and orders for smaller vessels are lagging. Data from Liner Research Services indicate that ships below 4,000 TEUs account for just 14.6% of the global order book by capacity, far below the industry average of 35.9%, which is skewed towards larger vessels. As older ships are phased out, a shortage of vessels in the sub-4,000 TEU category is expected to emerge. The current order book represents only 37.8% of the fleet that will be 25 years or older by 2030. Ships are generally scrapped when they hit 25 years old as they become too expensive to maintain and fail new environmental rules. Ooi notes that concerns about container shipping overcapacity are largely confined to the larger vessel segment, which accounts for about 53% of global container ship orders. “During the Covid-19 pandemic, many shipping lines channelled record profits into mega-ships aimed at long-haul routes, contributing to a supply imbalance. If you look at the big ship category, the average age is relatively young,” he says. Recent disruptions, such as the instability in the Red Sea, have helped absorb some of the excess capacity from 2022 to 2024. Rerouting vessels around the Cape of Good Hope adds weeks to transit times, effectively reducing the number of available ships. “Disruptions are generally positive for the shipping industry because they tend to absorb capacity,” Ooi says, pointing to hundreds of vessels stranded in the Strait of Hormuz amid the ongoing conflict in the Middle East. Freight rates have risen sharply as a result. Shipping a container to the Red Sea now costs between US$6,000 and US$7,000 per TEU, compared with roughly US$1,000 to US$2,000 previously, with additional war risk premiums also in play, explains Ooi. Despite these global disruptions, the intra-Asia feeder segment remains structurally undersupplied and this imbalance will take time to correct, he says. “Shipyards are full, and the pipeline for smaller vessels remains limited.” Built on timing and asset discipline MTT Shipping’s rise reflects not just strategic positioning but also well-timed capital deployment. The company was established in December 2010 by five people: executive chairman Datuk Seri Ong Kean Lee, Ooi, executive director Chan Huan Hin, director of marketing Lee Hock Saing and director of operations Lee Kong Siong. With just RM10 million in capital and zero owned vessels, the company spent its early years chartering ships along routes between Peninsular Malaysia and Sabah and Sarawak. As profits grew, management pivoted to acquiring second-hand vessels at distressed prices, a strategy that now underpins its cost advantage. Net tangible assets have since grown to RM1.8 billion — or RM2.6 billion on a revaluation basis — while gearing remains modest at around 0.5 times. MTT Shipping has also benefited from industry consolidation. The number of Malaysian operators has shrunk from nine to four since its entry into the market, with MTT Shipping now the largest. Profitable from its early years, MTT Shipping’s earnings surged during the pandemic-driven shipping boom. The group posted a record net profit of RM551.1 million on revenue of RM1.41 billion in the financial year ended Dec 31, 2022 (FY2022), as supply chain disruptions drove freight and charter rates sharply higher. But margins are now normalising, says Ooi. “We are stabilising at around the mid-20% range, which is still healthy for the industry.” Co-founders retain stakes, signalling confidence in outlook MTT Shipping aims to raise RM652.5 million through its IPO, issuing 633.5 million new shares at RM1.03 each. This gives the company a market capitalisation of about RM2.6 billion upon listing and a price-to-earnings multiple of 10.3 times FY2024 earnings, with a projected dividend yield of 6.2% — assuming a 50% payout ratio. Notably, existing shareholders are not selling shares in the IPO, signalling their confidence in the company’s long-term outlook. “We are not cashing out. The focus is on growing the business,” says Ooi. Post-listing, the major shareholders’ stakes will be diluted. Largest shareholder Ong’s holding will fall from 29.9% to 22.4%, followed by Malaysia Trade & Transport Company Sdn Bhd (MTTC) (from 19.6% to 14.7%), Ooi (from 17.1% to 12.8%) and Hock Saing (from 14.8% to 9.4%). MTTC’s own shareholding structure remains led by Ong Chin Teik Sdn Bhd (37%) and Permodalan KT Sdn Bhd (18%), followed by Ong (15.7%) and Ong Guat Ee (8.2%). The group maintains a diversified funding base, including bank borrowings, sukuk and equity, allowing it to sustain a balanced capital structure. “With this mix, we are able to manage our gearing at prudent levels,” Ooi says. The next phase of growth is straightforward: expanding its fleet. Proceeds from the IPO will help fund a fleet expansion from 26 vessels to 38 by 2029, lifting capacity by roughly 50%. Growth will be concentrated in feeder operations, with selective diversification into chemical tankers. “With 38 ships, we would be approaching — or even slightly exceeding — the size MISC Bhd (KL:MISC) had when it exited the container liner business in 2012,” Ooi says. At that time, MISC had about 30 container ships. MTT Shipping is also acquiring two tankers, targeting a niche within the chemical tanker segment. Rather than competing directly with established players, it is focusing on regional demand, noting that around four million tonnes of chemicals are produced annually in Labuan and Bintulu. At the same time, the group is investing in land-based logistics, including warehousing and container depots, particularly in Sabah and Sarawak, where industrial activity is gaining momentum. The group is increasingly seen as a proxy for growth in Sabah and Sarawak, which are entering a new phase of industrial development. “With a 46% market share in East Malaysia, we are the dominant player. Our investments in modern logistics infrastructure, capacity, digitalisation and green logistics will strengthen our position there,” says Ooi. “We believe there is still room to grow, as certain logistics infrastructure remains underdeveloped.” A defensive niche MTT Shipping’s domestic and regional focus has effectively insulated it from the geopolitical shocks emanating from the Middle East, which have caused disruptions far beyond the region. “We have no exposure to the Gulf because we do not operate shipping routes there. The main impact is higher oil prices, but these are typically passed through,” says Ooi. This cost recovery is managed via industry-standard bunker adjustment factor mechanisms, which allow the company to impose a surcharge on top of freight rates to offset fuel price fluctuations. At the same time, tighter vessel supply is underpinning charter rates. “The market is already firm and is becoming firmer,” he adds, noting that a vessel rolling off charter in the middle of the year is being re-fixed at rates more than 5% higher than previous levels. Currency risks are also naturally hedged. “About 60% of our revenue is in US dollars and 40% in ringgit. Charter income and international freight are largely denominated in US dollars, which provides a natural hedge,” Ooi says. The company’s cost discipline also provides a buffer, allowing it to remain profitable even when charter rates soften. “Our investments, whether in newbuilds or second-hand vessels, were made when prices were low. That keeps our capital costs competitive and allows us to weather market volatility,” he says. Ultimately, MTT Shipping, which employs about 570 people, is going to stay focused on what it knows best — short-haul feeder shipping, where operational discipline and local network density matter more than scale. Ooi likens the business to “the 99 Speedmart of shipping” — one built on high frequency, efficiency and ubiquity, rather than size. “You need local knowledge and the right cost structure. It is not easy to enter and compete.” As long as the structural shortage of feeder vessels persists, the tide remains in MTT Shipping’s favour. Source: The Edge Malaysia 2026-04-29 hellenicshippingnews… tweet Share

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• April 29th, 2026
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