Shipping lines leave RI after drop in imports

Shipping lines leave RI after drop in imports

JAKARTA (JP): Indonesia's drop in imports has forced many
foreign cargo shipping lines to cut or withdraw their operations
here, a shipping line executive has said.

James T.Y. Chen, senior owners' representative of the Hong
Kong-based Orient Overseas Container Line Ltd., said yesterday
many shipping lines considered the route to Indonesia and other
Southeast Asian countries too costly.

"The income from inbound freights substantially dropped
because of very few imports," Chen told The Jakarta Post.

He said his company replaced its four six-month-old ships
serving the Japan-Indonesia route last month with a feeder
serving the Singapore-Jakarta-Surabaya route.

"Our ships went up north to Taiwan, Hong Kong and Japan.
Because of the currency crisis, imports to Singapore were very
slow. We lost at least half a million dollars," he said.

The Indonesian-owned, Singapore-based Samudra Shipping Line
Ltd., has taken away two of their feeders, while Tokyo Senpaku
Kaisha (TSK Lines) now only runs one feeder compared to three
previously.

Korean-based Hanjin Shipping withdrew all its ship calls and
now runs only feeders here, Chen said.

"At the moment, those who are still here are just thinking
strategically that they are financially stronger and
organizationally more efficient, therefore they will still be
here when the economy recovers," he said.

Chen said liner income from imports to Indonesia had fallen 70
percent, he said.

At the same time, exporters from Europe, North America and
Australia enjoyed a reduction in shipping rates to East Asia
because of tightened competition among the shipping lines,
creating a further 10 percent loss in the industry's income, he
said.

Meanwhile, space for outbound cargo could only be increased by
as much as 10 percent, he said.

Chen said many carriers reduced their ship calls, operated
smaller ships or simply stopped serving Indonesia, resulting in a
lack of cargo space for exporters here.

Shortage

Elsewhere in East Asia, there has been a shortage of cargo
space due to a huge leap in outbound exports from the region to
North America, Western Europe and Australia.

The Asian crisis plaguing Japan, Korea, Taiwan, Thailand,
Malaysia and Indonesia have dragged down the currencies of these
countries since early last year.

Many of these countries' exports have become more competitive,
but at the cost of a drastically deteriorated buying power for
importers.

Chen said local exporters often lost cargo space to their
competitors from Japan, China, Taiwan or Korea.

For European-bound exports, Singapore is the last port call.

Indonesian exporters often lose their cargo spaces to Japanese
cargoes which mostly consist of lighter, higher-value electronic
products.

Many Indonesian products are heavy, such as furniture, coffee,
wood products and rubber.

"Liners are much more willing to pick up containers which are
lighter and have higher values," Chen said.

Chen said exports to North America had more advantages and a
higher priority for space because Singapore was the first loading
port in the region.

The size and frequency of inter-Asian shippings have become
smaller with a subsequent decrease in cargo space, he said.

In Indonesia, export-oriented industries have complained of
container shortages for months, caused by the sharp drop in
imports.

Data from Tanjung Priok Port shows that the container shortage
at the port totaled 6,018 twenty-foot equivalent units (TEU) in
November.

In December, the shortage dropped to 2,732 TEU.

The shortage worsened in March totaling 11,500 TEU or 2,687
TEU a week.

Some shipping lines have been forced to carry empty
containers, creating higher costs, he said.

For example, importing an empty 20-foot container to Jakarta
from Europe could cost as much as US$875, including a $400
handling fee and $475 for ocean freight, he said. (das)