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)