In most of the developing countries, the performance indicators of industry clusters have outpaced the na-tion’s economic development indicators. Clusters as an instrument for economic growth is turning out to be an acceptable choice among policymakers globally. Establishment and execution of cluster policies can be classified in to different models based on approaches to the creation and promotion of clusters followed in different geographies. Potential constituents of a cluster need to be motivated to participate in more common action. Cluster policy is about consistently paving the way for environments that are encouraging to the dis-tinct businesses and organizations those are the key actors in cluster activities. There should be definitive benefits facilitated by the policy measures to encourage the constituent firms to participate in the cluster activities. The attempt was to facilitate policy makers by identifying the characteristics of cluster policies, which are fundamentally critical to be considered within many of the approaches being practiced, especially in the maritime industry.

The maritime sector in Malaysia is best known globally due to the Straits of Malacca and being a nation surrounded by sea. Malaysia also has a substantial maritime industry consisting of numerous shipyards, ports and terminal faculties, ship services and a plethora of other companies and institutions with maritime oriented activities and become essential components of the Malaysia’s maritime clusters. Issues such as underutilised intermodal terminals, uneven proportions in the freight transport infrastructure and road and seaport congestions prevent Malaysian seaports from achieving their full potential in serving their respective hinterlands. The key factors to improve Malaysian dry port or intermodal terminals are transport network; container planning; competition; location and, externalities. The paper does not only present the critical challenges faced by Malaysian intermodal terminals especially dry ports and the implications for seaport competency but it also provides strategies to utilise the Malaysian freight multimodal system to amplify seaports’ performance in serving their hinterlands. As such, this may warrant policy makers to devise a comprehensive national master plan for the maritime sector in order for Malaysia to further develop her maritime industry and economies.