'U.S. port shutdowns yet to affect Indonesia'

A'an Suryana, The Jakarta Post, Jakarta

The mass shutdown of U.S. West Coast ports disrupting the inflow of Indonesian goods has had no immediate impact on exporters here but does threaten them with delayed payments and orders, exporters said on Monday.

"There aren't any complaints from exporters yet despite the shutdowns," said Djimanto the secretary-general of the Indonesian Footwear Association (Aprisindo).

He was responding to the week-long closures of 29 ports along America's West Coast through which most Indonesian products enter the country.

Absorbing nearly US$5 billion in exports over the past eight months, America accounts for more than 16 percent of Indonesia's total non-oil and gas exports, making it the country's biggest export market.

Among the main items sold to America are textile, footwear and agricultural products, notably cocoa.

Now the mass port shutdown is holding up these products on ships outside west coast ports as there is no one to unload them.

The shutdown follows a dispute between shippers under the Pacific Maritime Association and union workers.

Their last round of talks on Monday ended without a deal.

Analysts have warned of the damage the shutdown poses to Asian economies many of whom rely on the U.S. export market which has already weakened following months of a sluggish economy.

Most at risk are exporters of perishable goods such as fruit and vegetables, while export hubs Singapore and Hong Kong must cope with rising backlog of cargoes that are unable to leave their ports.

Djimanto said the impact on Indonesia was not immediate. Most exporters here sell their products based on a Free on Board (FoB) scheme, according to him.

Under this scheme, he said, exporters were not responsible for their products' shipments to the markets.

"However if our vessels remain stranded it will have a contagion effect by delaying all new contracts," Djimanto added.

Exporters could expect late payments and this, he explained, could mess up their financial planning.

"It'll hamper negotiation with banks so that exporters will not be able to receive new working loans on time," he said.

However he could not say for how long footwear exporters could afford to have their products left stranded off America's west coast.

Executive of the Indonesian Textile Association (API) Lili Asdjudiredja estimated that a delay of more than one month would be damaging to textile exporters.

"If the shutdown continues for between one to two months, it will hurt the financial flow of exporting firms," he said

Analysts have said a week-long delay posed no immediate threat to most exporters but that more than a month of this would shatter the Asia-U.S. supply chain.

Many expect that the daily loss of around $2 billion in U.S. domestic trade will force Washington to intervene and order the opening of these ports.