Port havoc may lead to extra costs

Port havoc may lead to extra costs

By Prapti Widinugraheni

JAKARTA (JP): Foreign shipping companies are threatening to
impose additional charges on importers of up to a total of US$70
million a year if congestion at the Tanjung Priok port does not
abate.

Chairman of the Indonesian Importers' Association (GINSI)
Amiruddin Saud disclosed yesterday that, although foreign
shipping companies had not yet made the threat officially, they
would not hesitate to do so if conditions at Indonesia's main
port of entry did not improve by the middle of this month.

"There is no other way to deal with it than by improving the
port's poor performance as soon as possible," Amiruddin, who was
in Washington for an Asia-Pacific Economic Cooperation (APEC)
meeting on transportation, told The Jakarta Post in a telephone
interview yesterday.

He explained that in addition to the regular terminal
handling costs, surcharges of $200 would be imposed on each 40-ft
container and $100 on each 20-ft feet container shipped by
foreign companies and docked at the Tanjung Priok port.

He said that GINSI, which currently has 2,393 members, had
already protested against the planned surcharges but admitted
that the only way to avoid their imposition was to improve port
services and facilities.

Importers are currently required to pay a terminal handling
fee of $125 for a 40-ft container and $75 for a 20-ft container.

The Kompas daily quoted Secretary General of the Indonesian
National Shipping Association (INSA) Barens Saragih as saying
recently that the lengthy period of time needed for ships to dock
at Tanjung Priok -- up to five days or more in some cases -- had
increased the prices of imported goods by up to 20 percent.

Causes

Barens said the causes for the delays included heavy red tape
and poor management at the port. He accused port managers of
being unresponsive to INSA's request that it review cargo-
handling procedures.

Amir Harbani, president of PT Pelabuhan Indonesia II, which
manages the port, put the blame on shipping companies which, he
said, failed to present on time the documents required to dock at
the port.

The daily quoted Harbani as saying that there were cases in
which ships did not have the customs, immigration and quarantine
(CIQ) papers required for entry, while others did not have an
agent to manage the incoming and outgoing cargoes.

Concurring with Amiruddin, an executive of a private shipping
company, who requested anonymity, told the Post that congestion
at Tanjung Priok was mainly caused by inadequate port facilities,
but added that the cement crisis earlier this year -- which
brought in large amounts of imports -- worsened the situation.

He said that Tanjung Priok, which has not been expanded or
renovated since colonial times, needed to be upgraded to meet
modern standards and increasing development demands.

"The port should be renovated so it can accommodate large,
modern fleets with drafts reaching up to 11 meters," he said.

He explained that Tanjung Priok's docks had varying depths,
forcing larger ships to anchor offshore before they could be
given a space with the suitable depth at the pier.

He said it was naive to think that the delays were caused by
incomplete shipping documents because shipping companies, through
their agents, would have taken care of the papers at least two
days before their ships entered Tanjung Priok.

"These (CIQ) are standard documents which would have been
presented at every port before arriving in Jakarta. Besides,
ships are now equipped with modern telecommunication instruments
which allow them to conduct active communications with their
agents and the port authority," he said.

The executive said that a ship's operational costs, either
docked or operated, ranged between $10,000 and $15,000 a day.
Consequently, delays cause serious financial losses.

The head of Pelabuhan II's public relations office, Harry
Sutanto, said in a statement made available to the Post on
Tuesday that over the last five years the number of incoming
ships had increased by about six percent per year, with 11,130
entering in 1990, 12,106 in 1991, 12,359 in 1992, 13,525 in 1993
and 12,733 in 1994.

Over that period, he said, the volume of goods entering the
port had increased by 12 percent each year, with 26.8 tons of
goods recorded last year.

Harry said there was currently also an unexpected trend of
ships' sizes increasing (in gross tonnage terms) and that there
were more ships carrying essential goods, such as cement and
rice.

The port currently has docks with a total length of 10,474
meters, with waters of varying depths for both conventional and
container vessels.

Harry said that to cut back the length of the waiting time,
more docks and facilities would be added, including four harbor
cranes which are to start operating in September.

He said that longer working hours of the port authorities had
been introduced and attempts were being made to improve
coordination between related offices, as stipulated in a decree
issued by the minister of transportation last May.