Seaport efficiency

Seaport efficiency

Minister of Transportation Haryanto Dhanutirto's plan to stop
the ship-side trucking service for imports through the Jakarta
seaport of Tanjung Priok has raised a fundamental question about
the basic function of physical infrastructure. Dhanutirto
reaffirmed Monday he would gradually stop freighter-side trucking
services to increase the port's revenue from its warehouses. This
means imports, which can now be unloaded directly to waiting
trucks for immediate hauling to shippers, are to be held up at
port warehouses for a few days simply to raise the utilization
rate of transit sheds.

Judging from macro-economic efficiency, the plan is not wise
as it is bound to increase the costs of importing. Since about 70
percent of Indonesian imports consist of industrial raw materials
and 22 percent of capital goods with the remaining 8 percent
taken up by consumer items, Dhanutirto's intention will adversely
affect manufacturing costs and the implementation of investment
projects.

It is no surprise that the Indonesian Importers Association
have strongly opposed the plan, saying it is entirely irrational.
After all, a seaport is a basic infrastructure for the economy.
It functions mainly as a transit point for imports, exports and
merchandise between the islands. A port functions well when it
facilitates the flow of goods and passengers as fast as possible
at the least cost. True, a port should make income to finance its
operations and investment but this should not be made at the
expense of macro-economic efficiency.

Seaports, like airports, roads, electricity and
telecommunications, are basic infrastructure which facilitate
economic activities. It would be an anomaly if, for example,
Tanjung Priok port posted a high profit while most users of the
port service complained about high costs. The ultimate end is not
a highly profitable seaport but an efficient and competitive
economy.

An efficient port is one of the primary factors considered by
investors in locating their projects and an efficient port is not
one which makes a lot of profits but guarantees a smooth flow of
goods. Ports all over the world have been competing to attract
more trade because the larger the volume and the value of trade
it can attract the lower the tariffs it can charge on its
services.

It is true, as Dhanutirto argued, that problems could arise if
the number of trucks available was not adequate to take in all
the freight being unloaded from a ship and this could prolong the
unloading process and could exact demurrage costs on the
freighter. However, such problems are not a strong enough reason
to justify a blanket ban on the ship-side trucking service.

The port management should continue giving importers an option
either to use the transit sheds or transport their imports
directly to their own warehouses through freighter-side trucking
services. The port management needs to ensure that shippers make
all the preparations necessary to guarantee the smooth unloading
from ships and immediate hauling out of the port area and if they
are not fully prepared they should be ordered to move their cargo
to the port warehouses. The timing of ship-side trucking service
should also consider the problem of traffic congestion in
Jakarta. With modern communications such as electronic data
interface both shippers and port management can be fully informed
in advance of the kinds of cargo to be unloaded, the handling
equipment and number of trucks needed by the incoming freighter.