Abstract

It is well-known that navigating the waterway from the primary trade

hubs in northern Europe to the Asia-Pacific ports and contrariwise along the
Russian Arctic Coast (Northern Sea Route - NSR) is much shorter and faster,
than southern ways via Suez or around Africa. The NSR can significantly save
costs (through saving time and fuel) and avoids the risk of attack by pirates.
But the opening of NSR could give negative impact about employment to
shipping company at Malaysia. This research will be including with defining
what is NSR, a little bit about economy and demand, the methodology of
research and the discussion about negative impact of NSR to Malaysia
shipping company and suggestion to overcome this current issue before
getting worst.

1.0 INTRODUCTION
Employment were divided to two category which is employed and
unemployed. Employed is all person who, at any time during the reference
week worked at least one for pay, profit or family gain (as an employer,
employee, own account worker or unpaid family worker). Also considered as
employed are persons who did not work during the reference week because
of illness, injury, disability, bad weather, leave, labour dispute and social or
religious reasons but had a job, farm, enterprise or other family enterprise to
return to. In addition, it also included are those on temporary lay-off with pay
who should definitely be called back to work. While unemployed are
classified

into

two

that

is

the

actively

unemployed

and

inactively

unemployed. The actively unemployed include all persons who did not work
during the reference week but were available for work and actively looking
for work during the reference week. Inactively unemployed persons include
the following categories persons who did not look for work because they
believed no work was available or they were not qualified, persons who were
waiting for result of job applications, and persons who had looked for work
prior to the reference week.
Based on theory employment, for which we may thank the genius of J. M.
Keynes (1936), is without question the most important advance in economic
analysis in the twentieth century. Keynes taught us to understand the nature
of depressions and radically changed our thinking about how to deal with
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them. Keynesian principles have been widely applied in the policies of most
industrialized

countries,

and

governmental

responsibility

for

the

maintenance of full employment is now generally accepted. In the United

States the growing influence of the new economics led, in 1946, to the
passage of the Employment Act, which created the Council of Economic
Advisers and committed the federal government to promote maximum
employment, production, and purchasing power.
Malaysia as a one of the most country in the world leading maritime
nation is surrounded by a sea much more than its land mass. Ports and
shipping are recognized as essential contributors to facilitating Malaysias
trade, hence its prepare a thousand of job opportunity to local people and
foreigner to be a crew of shipping in Malaysia company. This employment in
maritime industry usually give very high wage due to the skill and the risk. In
addition, ship company provide so many package including health insurance,
personal insurance and others that can attract more ship crew to apply to
that particular company. But, the when the North Sea Route (NSR) are start
operated, it had been effected to the employment of ship crew at Malaysia.
The reason is most shipping activity will using current route at Suez canal
and Panama canal will change to North Sea Route. The implication is port will
faced reducing activity and less to gain profit, indirectly port will reducing
taking employee and have sack labor to reduce cost. This definitely will be
current issue with implication of employment in maritime industry especially
in Malaysia.
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2.0

LITERACY REVISION
2.1 The North Sea Route
Figure 1 shows the map of NSR that used for shipping lane. The North

Sea Route (NSR) is formally defined in Russian law as extending from the
Novaya Zhelaniya straits (at the Novaya Zemlya archipelago, connecting the
Barents Sea to the West and the Kara Sea to the East), to Cape Dezhnev by
the Bering Strait (Solski 2013).NSR had been established in all the countries
bordering the Belgium, Holland, Germany, Denmark, Sweden, Norway,
England and Scotland.

NSR, in particular, which are also the most valuable cargo to be

transported directly from one point to the other between East Asia and
Northwest Europe, would like to take advantage of the significant reduction
in sailing distance via the NSR. Natural resources produced in the Arctic
region, are also potential cargoes. Gas condensate from Murmansk (Russia),
Liquefied Natural Gas (LNG) from Hammerfest (Norway) and iron ore from
Kirkenes (Norway), have already been commercially shipped to East Asia via
the NSR since 2010. In 2012, the NSR sailing season started in late June with
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the last voyage completed in late November. This period represented the
longest NSR navigation season ever.

NSR also is a shipping lane officially defined by Russian legislation from

the Kara Sea to Pacific Ocean that operated along the Russian Arctic coast
from Cara Gates straits between the Barent Sea and the Kara Sea. The entire
route lies in Arctic waters and within Russian Exclusive Economic Zone (EEZ).
NSR bringing the happiness to shipping company when only take 38 days
from Norway to China (Dalian) compare to current route Suez canal takes 48
days. By this advantages definitely save cost for company especially from
North country. By this situation will create huge impact to employement
issues especially at Malaysia port due to earning profit getting low because
of decreases customer.

Maps : North Sea Route

Sources : http://ocean71.com/economy/new-sea-ways/

2.2

Maritime Transport And Demand

Ship call is the total number of ships that go to the port for unloading

and loading cargo. Port of call is more about the ship port and arrival.
According to Ministry of Transportation (2012), after the North Sea Route
were very actively use, the total number of ship calls at Port Klang (Westport
and Northport) has increased year by year starting from year 2000 until 2003
but decreased in 2004 and 2005 by almost 6.77% and 0.66% respectively
from 15,150 unit vessel to 15,050 unit vessels. Malaysia ports act as
gateways for the economy and facilitate much of the nation's trade, 95% of
which is carried by seaborne transport. Together, ports and the shipping
sector generate tremendous multiplier effects and create employment
opportunities for many. The importance of port to nation 1) a vital aspect of a
national transport infrastructure 2) main transport link with their trading
partner in a focal point for motorways and railways system and 3) a major
economic multiplier for nation's prosperity like a gateway for trade, attract
commercial infrastructure and industrial activity. If the ships sailing via the

Malacca Straits are reduced, the Malaysia economy will be negatively

affected.

3.0 METHODOLOGY
The methodology are gained from internet sources to find journal and
article that are related with main topic which is past study from professional
researcher that makes it suitable and compatible with my research.
The information are majorly explain about the opening the North Sea
Route (NSR) and the effect to the employment in maritime industry at
Malaysia. The info also used at literature section that in point of the opening
of NSR and maritime transportation and demand mainly at Port Klang.
The analytical thinking method were used due to lack of information
but still in logically reason and effect based on reading on article and journal
and current issue that had been expose at news paper and television.

4.0 FINDING AND DISCUSSION

Negative Impact
The opening North Sea Route gives so many impact to the world of
maritime industry especially to employment at Malaysia. The impact were
definitely in positive and negative. Now the NSR opening it will relates with
issues of employment at Malaysia. In generally as we known, nowadays our
labor force as on board of ship especially wrestling to get a job due
competition with foreign worker like from Philippine and Indonesia. But from
year 2010 to 2014, people who work on board of ship decreases in this five
years. Why this could be happen? Assuming method will used in this
discussion. Perhaps our people and foreign had joining to the other company
that operates at port who involve with North Sea Route. With reason of
contract job. In world ship crew were hired by contract with temporary
contract whether in short term (three month) or long term (six to nine
month). So that after they have finish their contract and realize that so many
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opportunity of job at Far East and Europe will be attract them to be a part of
them as ship crew. Not only that, compare the package and wages with our
country Malaysia and Europe companies, definitely Europe country will be
offer better job payment and package. This current phenomenon will be drag
to our employment issues at our country. Our local company will lack of
qualified candidates to work with them. In long term effect, company have to
spend a lot of money to send their new worker that are not to experience to
go to training and development. High cost will be issued until the company
cannot handle it and have to reduce their employment. Then the percentage
unemployed our local people will be increase.
Solution
How this problem that must be used to overcome the negative impact.
Based on overview of Maritime Institute of Malaysia (1 st National Marine
Industries Forum 2010, page 11) were highlighted the government and
company in maritime industry must have long-term plan to develop industry.
The workers must upgrade their technical skills to stay compete with other
workers especially with foreign. Each company have to provide more
incentives to their worker so that can encourage the workers to give the best
performance which may attract customer to stands still using their service.
Finally port authority must encourage more OEM/MRO activities.

CONCLUSION
This research are mainly about the opening of North Sea Route (NSR)
which is bring a lot of impact which is all the maritime nation must be alert
because it apart of their economy contribution sector. The professional
people should be identify the negative impact of North Sea Route towards
employment at maritime industry at Malaysia. The NSR definitley give such a
big impact to maritime economy and demand, even also give impact to our
employment at Malaysia and others region. Government and company
should be alert and must cooperated to overcome this crisis before it
become more worst and develop more qualified workers to decrease our
local people problem which is related with employment and the future.

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REFERENCE
http://www.searesources.biz/Doing-Business-In-Malaysia.pdf
http://www.unis.no/20_RESEARCH/2050_Arctic_Technology/Smida/PDF/2014/O
MAE2014-23626_Nataly.pdf (page 1)
http://www.mima.gov.my/v2/data/pdf/presentation/3.1._overview_of_malaysi
an_marine_industry_mima.pdf (page 11 and 12)
http://ocean71.com/economy/new-sea-ways/ (Diagram 1.0)
http://www.oecd.org/statistics/data-collection/Population%20and%20Labour
%20Force%20Definitions-Eng.pdf

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