The strait is the main shipping channel between the Indian Ocean and the Pacific Ocean, linking major Asian economies such as India, China, Japan, South Korea, and Taiwan. Over 50,000 vessels pass through the strait per year, carrying about one-quarter of the world's traded goods including oil, Chinese manufactures, and Indonesian coffee.
About a quarter of all oil carried by sea passes through the strait, mainly from Persian Gulf suppliers to Asian markets such as China, Japan, and South Korea. In 2006, an estimated were transported through the strait.
The maximum size of a vessel that can make passage through the Strait is referred to as Malaccamax. The strait is not deep enough (at 25 metres or 82 feet) to permit some of the largest ships (mostly oil tankers) to use it. A ship that exceeds Malaccamax will typically use the Lombok Strait, Makassar Strait, Sibutu Passage and Mindoro Strait instead. At Phillips Channel near Singapore, the Strait of Malacca narrows to 2.8 km (1.5 nautical miles) wide, creating one of the world's most significant traffic chokepoints.
There are 34 shipwrecks, some dating to the 1880s, in the Traffic Separation Scheme (TSS), the channel for commercial ships. These pose a collision hazard in the narrow and shallow Strait.
A second alternative is to build a pipeline across the isthmus to carry oil to ships waiting on the other side. Proponents say it would cut the cost of oil delivery to Asia by about $0.50/barrel ($3/m³). Myanmar has also made a similar pipeline proposal. There is also a proposal to pipe crude from the Middle East to Xinjiang, China. Building began in October 2004.
Early traders from Egypt, Rome, Arabia, Africa, Turkey, Persia, and India used to reach the Malaysian state of Kedah before arriving at Guangzhou. Kedah served as a western port on the Malay Peninsula. These traders sailed to Kedah via the monsoon winds between June and November. They returned between December and May. Kedah provided accommodations, porters, small vessels, bamboo rafts, elephants, and also tax collections for goods to be transported over land toward the eastern states of the Malay Peninsula like Kelantan. Ships from China came to trade at these eastern trading posts and ports. Kedah and Funan were famous ports through the 6th century, before shipping began to utilize the Strait of Malacca itself as a trade route.