$270m spent in transshipment costs
$270m spent in transshipment costs
Zakki P. Hakim, The Jakarta Post/Jakarta
Indonesia could have saved US$270 million in transshipment costs
every year if its exporters and importers did not use Singapore
as a hub for exports and imports, an Indonesian Exporters
Association (GPEI) official says.
GPEI secretary-general Toto Dirgantoro said on Friday that
currently 80 percent of Indonesia's total exports and imports
went through Singapore. The city-state has the facilities to
connect Indonesia with major trading partners across the globe.
"Indonesia could save hundreds of millions of dollars if the
government materialized its plan to make Jakarta the country's
national and international hub for direct shipment to other
continents," he told reporters on Friday.
He added that transshipment costs eventually added to product
prices, meaning the goods become less competitive on the global
market.
Toto said domestic exporters and importers had no choice but
to have their goods shipped through Singapore because Indonesia
did not have adequate ports to accommodate direct long-haul
shipments.
He went on to say that the government, through the Ministry of
Transportation, had actually issued last year a ministerial
decree to make Jakarta a national shipping hub. However, no
significant development has been seen so far.
Toto, who is now a member of the government's special team on
improving trade facilitation, blamed chaotic and poor port
management for inefficiencies in Indonesian harbors.
The chaos, he said, originated from the government's attitude
in perceiving ports as a source of revenue for the state budget.
The attitude has prompted port operators to reap maximum
profits and neglect the development of necessary facilities in
the ports, he said.
"In contrast, countries like Malaysia, Thailand and China
literally pour state funds into ports as an investment to boost
trade and attract containers from other countries, including from
Indonesia, to stop by," Toto said.
He believed the government should take the same attitude,
perceiving ports as an investment instead of a cash cow.
"When there is a will, there is a way," he said.
Indonesia exports and imports a total of 5.5 million TEUs
(twenty-foot equivalent units) of containers annually, with 80
percent of them going through Singapore.
In Singapore, exporters and importers have to pay
transshipment costs that includes unloading containers from
vessels, renting space and loading them onto other vessels,
before finally being shipped to their final destinations, Toto
said.
The transshipment cost was on average $60 per TEU per year,
and such cost does not include cargo piling and other fees, he
added.