Fierce competition hurts small shipping firms

Fierce competition hurts small shipping firms

JAKARTA (JP): Government deregulation in 1992 opened the
shipping business to large companies which have become a threat
to their less efficient rivals.

The Association of Small Shipping Businesses (Pelra) said
yesterday that the regulations have affected small firms because
many big and foreign shipping companies, mostly with large
capital, have greater economies of scale.

Pelra's chairman, Abdul Rahim, said at a hearing with
Commission V of the House of Representative (DPR) that the
association's members are not ready to compete with bigger
shipping companies because their ships aren't as good and it is
harder for them to obtain loans, while the quality of their human
resources is poor because they have no formal education or
training.

The association has 70,000 members all over the country and
controls 25 percent of dry cargo in Indonesia. It claims that
they contribute a great deal of money to the government through
various taxes, such as company taxes and value added taxes.

They asked the DPR to protect the existence of small shipping
companies because of their historic roles in the economy.

"We hope that government will protect us, give us additional
education and training, build special ports for us and not
restrict the building of merchant vessels," Rahim said.

They also asked to be given loans with the same facility that
loans are made to bigger shipping companies.(yns)