Australasia route slashes shipping time to Sydney

Endy M. Bayuni, The Jakarta Post, Jakarta

A new trade route just opened last year will potentially cut the shipping time of Indonesian goods exported from Java to major Australian urban centers like Sydney and Melbourne from 21 days on average at present to just eight days.

But while this promises immense savings in terms of time and costs (both shipping and inventory), there is just one problem: There are no regular freighter ships sailing between major Javanese cities and the port of Darwin, the entry point to this new Australasia route.

Northern Territory Minister for Asian Relations Paul Henderson is in town this week heading a delegation to promote the new trade route in Indonesia, including exploring the possibility of opening shipping routes between Darwin and Indonesian port cities like Surabaya and Jakarta.

Currently, more than 90 percent of Indonesian exports to Australia are shipped to Singapore first before heading to Sydney or Melbourne, which explains the length of time it takes to ship them.

"Darwin is the Asian gateway into the Australian market for Indonesia and Asia," Henderson told a breakfast meeting hosted by the Indonesia Australia Business Council at the Intercontinental Hotel Jakarta on Monday.

The Australasia route essentially offers Indonesian and Asian exporters and importers the chance to ship their products to and from Darwin, which is located in the northernmost part of Australia, and have their goods transported by railway all the way south to Adelaide and then on to Sydney and Melbourne.

The new railway route is made possible since the opening of the track linking Alice Springs in the heart of the Australian continent and Darwin last year.

Australian politicians for over 100 years had promised to open a railway network between Alice Springs and Darwin, Henderson said.

Recalling the dream of early Northern Territory politicians of turning Darwin into an Asian gateway, he said: "That dream is now becoming a reality."

The state government has since been busy preparing Darwin, including building a new modern port and various other projects that would support the campaign to turn Darwin into a trade hub linking Asia and Australia.

The future development of the Northern Territory, a state with a population of 200,000 is somewhat linked to Asian trade.

Henderson pointed out that Darwin is geographically closer to Jakarta, Singapore and Balikpapan than to Sydney and Melbourne.

"Darwin looks to the north for economic growth as well as to the south," he said.

Darwin port is already serving a regular shipping service to Singapore and one route to Shanghai is on trial service. None is servicing major ports in the western part of Indonesia while a few ships are servicing routes to eastern parts of Indonesia.

The potential for the shipping business is immense, Henderson said.

He said Australia last year exported A$2.9 billion worth of goods to Indonesia and imported A$3.7 billion from Indonesia. Out of that, the Northern Territory's exports accounted for a mere A$130 million and imports A$15 million.

The Northern Territory is also lobbying for the expansion of pre-shipment inspection for all exports to Indonesia in Darwin. Such a facility currently is only accorded to exports to ports in eastern Indonesia.

"This is a proposition that would improve your margin," Henderson said of the Australasia trade route. "It's a win-win proposition to increase two way trade for the two countries."