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.