'Container shortage worsening'

'Container shortage worsening'

SINGAPORE (Dow Jones): Rubber traders in Indonesia, the
world's second-largest natural rubber producer after Thailand,
said yesterday they are increasingly concerned about the lack of
containers to ship the commodity.

Indonesian rubber exporters have faced a severe shortage of
containers and shipment delays since early April as a result of
an imbalance between heavy exports and reduced imports, traders
said.

"The problem is still unsettled and it's getting worse," said
a Medan-based trader. "About a week ago, we still had three
shipments. But we'll have to stop (shipping rubber) this week and
we don't know when it can resume."

Some liners have increased freight rates from the usual
US$150-$160 per container to $200, traders said.

To cope with the problem, some exporters have resorted to
using the more costly and fragile conventional means by which
goods are packed in a covered box rather than a solid container,
traders said.

Although freight rates are similar between shipping by
containers and by conventional means, exporters incur much higher
loading fees in the latter case.

While the loading fee for containers is Rp 2,000 - Rp 3,000
per kilogram , it costs up to Rp 7,000 - Rp 8,000 (about US$1)
for conventional means, said the Medan-based trader.

Shipping through conventional means is also considered less
efficient than using containers, traders said.

"Conventionals are only good for shipping to the Middle East,
India, or China, but not Europe," said another Medan-based
trader.

It normally takes 20 to 25 days to ship with containers from
Belawan, North Sumatra to European ports such as Amsterdam in the
Netherlands and Genoa in Italy, shorter than the 30 days by
conventional means, he added.

"Import is far less than export. I think that's the
bottleneck,' said a Medan-based senior executive with a major
rubber processor-exporter. "We have no money to import anything
now."

"I don't think the problem will be solved easily," said the
second Medan-based trader. 'Maybe as soon as Indonesia gets the
IMF loan,' things may turn for the better.

On Monday, the International Monetary Fund approved a $1
billion outlay to Indonesia after a delay in the release of the
second $3-billion tranche of a $43-billion economic reform
package.