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The Global Shipping Chokepoint Dilemma: Will “Pay-to-Pass” Turn into a Trend?

In the world of global logistics, a few narrow strips of water hold an incredible amount of power. The Strait of Malacca is one such bottleneck, serving as a primary artery for Asia-to-Europe and intra-Asia trade lanes. Recently, a brief internal debate in Indonesia regarding the possibility of imposing transit fees has highlighted a growing tension in maritime geopolitics: the struggle between national monetization and the international laws that ensure the free flow of trade.

While the Indonesian government has firmly reaffirmed its commitment to free navigation, the conversation itself mirrors a worrying trend seen elsewhere in the world, most notably in the Strait of Hormuz.

The “Pay-to-Pass” Model: A Warning from the Strait of Hormuz

The idea of charging ships for passage isn’t purely theoretical. In the Strait of Hormuz—a critical chokepoint linking the Gulf to global markets—reports indicate that Iran has implemented a “pay-to-pass” scenario. Some commercial vessels have reportedly been charged as much as $2 million to travel through the waterway.

This approach transforms a natural waterway into a revenue stream, but it comes with a heavy cost to stability. The Hormuz strait typically handles 20% of the world’s oil and natural gas supply, yet safety concerns stemming from conflict have already caused a fraction of traffic to divert or decrease.

For the international shipping community, the prospect of this model migrating to the Strait of Malacca is a significant concern. Unlike the Hormuz scenario, a levy in Malacca would impact a far wider array of cargo, including energy shipments bound for China, Japan, and South Korea, as well as apparel exports from Bangladesh, India, Pakistan, and Myanmar.

UNCLOS: The Legal Shield Against Maritime Tolls

Why can’t countries simply charge for the maintenance of these lanes? The answer lies in the United Nations Convention on the Law of the Sea (UNCLOS). This international legal framework is the bedrock of modern maritime navigation.

For Indonesia, adhering to UNCLOS is not just a matter of diplomacy; it is a matter of national legal identity. Indonesia is recognized as an archipelagic state under UNCLOS, a status that is contingent upon the country not imposing tariffs or tolls on straits within its territory.

Imposing a fee would essentially jeopardize Indonesia’s own legal foundations. As Foreign Minister Sugiono noted, the country supports freedom of navigation because, as a trading nation, it expects open sea lanes for its own benefit.

Regional Cooperation vs. Unilateral Action

The future of the Strait of Malacca depends on the continued cooperation of the bordering states. Unlike the Panama or Suez Canals, which are controlled by single nations, the Malacca Strait is managed by a collective of neighbors.

Current trends show a strong pro-free passage stance among regional leaders:

• Singapore: Foreign Minister Vivian Balakrishnan has emphasized that the city-state will not participate in any attempts to interdict or impose tolls, noting that trade-dependent economies have a shared interest in keeping waterways open.
• Malaysia: Foreign Minister Mohamad Hasan has highlighted that no unilateral decisions can be made, pointing to the joint patrols conducted by Malaysia, Singapore, Indonesia, and Thailand to ensure the waterway remains open.
• Indonesia: Despite brief comments from the finance ministry, the government has officially ruled out transit fees to maintain international law and regional stability.

The Growing Volume of Maritime Traffic

The pressure on these waterways is only increasing. Data from Malaysia’s Marine Department shows a clear upward trend in traffic: over 102,500 ships transited the Malacca Strait in 2025, compared to approximately 94,300 in 2024.

As volume grows, the temptation for nations to “monetize” these bottlenecks may increase. However, the economic interdependence of the region acts as a natural deterrent. When the Ports of Singapore, Port Klang (Malaysia), and Tanjung Pelepas (Malaysia) all rely on the same channel, any restriction on movement becomes a self-inflicted economic wound.

Frequently Asked Questions

What is UNCLOS and why does it matter for shipping?
The United Nations Convention on the Law of the Sea is an international agreement that defines the rights and responsibilities of nations regarding their use of the world’s oceans, including the guarantee of transit passage through international straits.

How does the Strait of Malacca differ from the Suez Canal?
The Suez Canal is a constructed waterway controlled by one country (Egypt). The Strait of Malacca is a natural waterway primarily managed by three bordering states—Indonesia, Malaysia, and Singapore—who are legally obliged not to hamper transit passage.

What would happen if tolls were imposed in the Malacca Strait?
It would likely be illegal under international law (UNCLOS), potentially jeopardize Indonesia’s status as an archipelagic state, and increase costs for a huge portion of global trade, including energy and apparel shipments.