Foreign shipping companies protested for charging high fees

Foreign shipping companies protested for charging high fees

Rendi A. Witular, The Jakarta Post, Jakarta

The Indonesian National Shipping Council (INSC) urged the
government to take stern action against foreign shipping
companies which had unilaterally imposed extra fees on local
freight forwarders and exporters.

The appeal was made during a meeting with the House commission
for transportation and infrastructure on Tuesday.

INSC chairman Suardi Zein said the council wanted the extra
fees, technically called terminal handling charges (THCs), to be
lowered or completely dropped because it was creating a high-cost
economy.

"Currently, local freight forwarders and export-oriented
companies have to shoulder the burden of such a high-cost economy
at the port. The THCs have undermined the competitiveness of our
products aboard," Suardi told legislators.

He further explained that, in addition to freight tariffs
which reached US$93 per 20-foot container, foreign ships had
forced exporters to pay an additional $150 in THC per 20-foot
container, making Indonesian port expenses the costliest in the
Asia-Pacific.

INSC said that foreign shipping liners argued that high THCs
were needed to cover the expensive stevedoring cost at local
ports. However, INSC had discovered that they were exaggerating
the THCs, as stevedoring only cost about $93 per 20-foot
container, which should be included in the freight cost.

Suardi said local companies had no choice but to use foreign-
owned ships, as local shipping companies only accounted for a
mere 5.4 percent of the shipment of goods, both import and
export.

Foreign-owned ships, on the other hand, transported the
remaining 94.6 percent of goods, which reached 350 million tons
annually.

"Foreign-owned ships have been acting like a cartel. They have
unilaterally imposed additional tariffs, as they know that
Indonesian exporters have no other choice but to use their
services," said Suardi.

On the sidelines of the meeting, executive member of INSC Toto
Dirgantoro said the council had long complained about the
problem, but the government had been slow in resolving the matter
so far.

Toto said that if there was no show of goodwill from the
government, the council would bring the matter to the World Trade
Organization (WTO) to be settled.

"We have been fighting for the rejection of the THCs since
1996, but there has been no progress at all. We are expecting the
matter to be resolved at the WTO," said Toto.

During the meeting, INSC also called for the elimination of
illegal fees at local ports, which was also hurting the
competitiveness of the country's business sector.