A. Kusumaningtyas
Indonesia Short Sea Shipping in Inter-island Trade and Distribution
Literature survey,
Report 2005.TL.6892, Transport Engineering and Logistics.
As an archipelago with more than 17,508 islands, out of which around 6,000
are inhabited, seaborne transportation becomes an inseparable aspect in
Indonesia's inter-island connection. This can be seen by the large number
of fleets, shipping companies, and ports in Indonesia, which experienced a
vast growth after the issuing of the Deregulation Policy in 1988.
The development of short sea shipping in Indonesia, now consisting of not
just inter-island but also coastal shipping, is heavily dependent on the
state of the fleets and shipping companies in one side, along with the
ports in another. Both must be in a same level of condition to support the
advancement of short sea shipping. Since 1988, fleets and shipping
companies have been competitive and responsive to the increasing demand in
sea transportation, but they are still lacking adequate quantity and
quality of national flag vessels. As a result, almost half of Indonesia's
inter-island cargo is accommodated by foreign flag vessels. This is a very
concerning situation for the Indonesian government because the country has
a large annual foreign exchange outflow representing net payments for
shipping services. Unfortunately, the case for ports in Indonesia is not
any better. Most ports in Indonesia operate inefficiently, resulting in a
long waiting and turnaround time for vessels, and late deliveries of
cargos. This inefficiency is caused by lack of sufficient port
infrastructure and poor management, including the manner of using labor
which institutionalizes underutilization of port facilities. Limited
involvement of private sectors also hampers the creation of competitive
and effective operations at ports.
The government of Indonesia and ports authorities made plans to develop
and improve the facilities and infrastructure of Indonesian ports,
emphasizing on extension of berths, addition of loading/unloading
equipments, and construction of container terminals. Connection to the
hinterland is also a great concern. Some of these development projects are
now on the go. Nonetheless, improvement towards the management of ports
must also be done in order to establish more efficient and competitive
operations, leading to a better port performance. To enhance better
economic integration of all areas in Indonesia, it is suggested to
increase utilization of Ro-Ro vessels. Ro-Ro shipping plays a critical
role in facilitating domestic trade, particularly for those areas and
islands cut off from the main areas of economic activity. It is also
suggested to introduce the use of landing vessels for transportation of
cargo to and from islands in the outer region of Indonesia, where the
berthing facilities are not yet adequate. This will support more economic
interaction of these regions with other areas of economy in Indonesia.
Unfortunately, the effort to increase transport capacity by expanding
Indonesian flag fleets remains unfeasible. The cost of buying a new or
second hand vessel or building a new one in Indonesia's own shipyard is
still higher than chartering foreign flag vessels, influencing Indonesia
shipping agency to choose the later.
In the end, in spite the complex condition of short sea shipping sector in
Indonesia, a bright future is waiting ahead. Road and rail transport of
cargo are starting to saturate from traffic congestion and excessive
pollution, in addition to increasing operational cost. With a healthy
shipping and port sector û thus offering better logistics
organization, service level, frequency, regularity, networking, and
one-stop shops for the management and pricing of the whole transport chain
from door-to-door û short sea shipping will grow to be an attractive
complement to road and rail transport.
Reports on Transport Engineering and Logistics (in Dutch)
Modified: 2005.02.14;
logistics@3mE.tudelft.nl
, TU Delft
/ 3mE
/ TT
/ LT.