INSA chases bigger share of exports<\/p>\n
Anissa S. Febrina, The Jakarta Post, Jakarta<\/p>\n
Domestic shipping lines, which currently control about 5 percent
\nof total shipments of exports, aim to boost this figure by at
\nleast 10 percent by next year, says a local shipping association.<\/p>\n
"We are set to increase the export volume shipped by domestic
\nvessels by at least 10 percent next year," Indonesian National
\nShipowners Association (INSA) chairman Oentoro Surya said on
\nFriday, adding that this would require significant additions to
\nthe national merchant fleet.<\/p>\n
Currently, Indonesian ships only carry 22.5 million tons of
\nexported goods out of the total annual total of 450 million tons,
\nleaving the rest of the lucrative business to foreign shipping
\nlines.<\/p>\n
A lack of ships is one of the obstacles hampering the growth
\nof domestic shipping lines.<\/p>\n
Oentoro explained earlier that with the targeted growth,
\nshipping lines would need a combined investment of around US$3
\nbillion to add more ships to their fleets.<\/p>\n
A second-hand 60,000 ton freighter costs around $20 million.<\/p>\n
While established companies found it easy to secure loans and
\nother forms of financial support, smaller ones would need the
\nhelp of a consortium of financing institutions, Oentoro said.<\/p>\n
"Currently, INSA is approaching foreign financing firms. There
\nare some in Singapore and Germany that have stated their
\ninterest," he said.<\/p>\n
Oentoro said that his own company, Arpeni Pratama Lines, would
\nallocate between $100 million and $150 million next year to buy
\nfour more bulk carriers to augment its current fleet of more than
\n50 ships.<\/p>\n
Meanwhile, one of the country's largest container shipping
\nlines, PT Pelayaran Tempuran Emas, said on Friday it would buy
\nthree German ships at a cost of $26 million. It was still
\ndeciding whether to seek financing from a local bank or a German
\nfinancing company.<\/p>\n
With these additional vessels, Pelayaran -- which now ships
\nabout one-third of the 22.5 million tons of exported goods --
\nplans to grab at least 3 percent more of market share.<\/p>\n
INSA estimates that by 2020, domestic shipping lines will
\nonly be capable of securing a 30 percent share of the some 550
\nmillion tons of exported goods.<\/p>\n
Domestically, however, local lines will carry some 80 percent
\nof the 370 million tons of goods transported within the country
\nannually, as compared to 50 percent currently.<\/p>\n
INSA calculation shows that with the current rate of growth,
\nthe Indonesian domestic shipping industry will lose about $11
\nmillion in potential revenue to foreign shipping lines annually.<\/p>\n
"It is crucial for our shipping lines to keep adding
\ncapacity," he said, adding that the full trust of Indonesian
\nexporters would also help boost the shipping industry.<\/p>\n
"Our exporters should start using the C&F (cost and freight)
\ntrading system instead of FOB (free-on-board). This would require
\nmore work but the multiplier effect it would have on the shipping
\nindustry would be tremendous," he explained.<\/p>\n
Under the C&F method, overseas importers pay for Indonesian goods
\nat a price that includes the cost of transportation, which means
\nexporters are responsible for choosing the freighters, which it
\nis hoped would be domestic shipping lines.<\/p>\n
Meanwhile under the FOB system commonly used here, importers
\nchoose the shipping line as the exporters are only obligated to
\nget the exports to the local port.<\/p>",
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