FIGHTING INEFFICIENCY, ILLEGAL LEVIES TO CUT DWELLING TIME IN INDONESIAN SEAPORTS by Fardah

Jakarta, Sept 24, 2016 (Antara) - Several Indonesian seaports are notorious for their long cargo dwelling time due to inefficiencies, poor infrastructure and illegal levies that lead to logistics costs multiplying for businesses.

         Dwelling time is measured from the moment the container is unloaded, until it leaves the gates of the container terminal.    
    Due to port inefficiencies and poor port-hinterland connectivity, many basic commodities in eastern Indonesia are twice as expensive as in Java.

         For instance, the dwelling time in the country's main Tanjung Priok Seaport handling over two-thirds of Indonesia's entire international trade, was twice as long as that in Malaysia and five times longer than Singapore.

         Other Indonesian ports take even longer to move containers in and out of their vicinities. Producers pass those higher costs on to consumers.

         Shortening long dwelling times and introducing simple payment systems can help make the port, and hence businesses, run more smoothly.

         President Joko Widodo (Jokowi), whose ambition is to make Indonesia a global maritime axis, has since the beginning of his administration, instructed that the dwelling time be reduced, particularly in major seaports such as Tanjung Priok located in North Jakarta, Tanjung Perak in Surabaya, and Balawan in North Sumatra.

         The Head of State has vowed to tackle the unending problems in the maritime and logistics sectors through reform and heavy investments in infrastructure with the goal to reduce logistics costs from the current 23.5 percent of GDP to 19.2 percent by 2019.  
    The government has intensified the implementation of infrastructure development to reduce logistics and transportation costs, which are 2.5 times higher when compared to other countries, due to illegal levies and prolonged processes.

         While inaugurating the operation of New Priok Container Terminal One (NPCT1) or Kalibaru container terminal at Tanjung Priok Main Seaport, on Sept. 13, President Jokowi ordered the Indonesian Port Corporation (IPC) or Pelindo II, to speed up efforts to increase port capacity.

         The Head of State also reminded that two years ago, in the early days of his administration, he had instructed that the dwelling time in every Indonesian seaport should be slashed to around two days.

         There is a progress as the dwelling time in Tanjung Priok has been reduced from 6-7 days in 2014 to 3.2 days now.

         "The Transportation Minister said 3.7 days. I asked for 2 point something (days). It must not stop at 3 (days). I asked for (dwelling time in) Belawan and Perak (seaports to) be cut, too," Jokowi added.

         Currently the dwelling time in Belawan port is 7-8 days, while, in fact, it has eight cranes.

         Jokowi said he has ordered the National Police Chief to investigate any possible illegal levies at the North Sumatra port. 
    "Congratulations for the completion of the first terminal construction. I order integrated operation, dwelling time reduction and eradication of illegal levies," Jokowi said.

         In the meantime, port operator PT Pelabuhan Indonesia (Pelindo) III has welcome police intervention in its efforts to cut short the dwelling time at the Tanjung Perak Container Terminal of Surabaya.

         Chief spokesman of the state company Edi Priyanto said in Surabaya, on Sept. 17, that Pelindo II would be ready to facilitate police in getting to the root of the problem because of which the dwelling time was too long at the country's second largest seaport.

         Tanjung Perak police chief, Adj. Sr. Com. Takdir Mattanette, said he had placed 100 police officers, including detectives and intelligence officers, to be ready every day at the command post.

         Takdir said he hoped that in one month's time, police would be able to clear the ports of any illegal levies or mafia practices and that the process of loading and unloading could be smoother and faster.

         "This measure is in line with the directive given by President Joko Widodo who has passed order to eliminate causes of long dwelling time at the port," he said.  
    Furthermore, the Transportation Ministry has asked that containers must be expeditiously moved out of the country's three main seaports ¿ Belawan, Makassar in South Sulawesi, and Tanjung Perak, and the dwell time be cut to three and a half days.

         At the Tanjung Priok seaport, the cargo dwell time will be brought down to two and a half days, Transportation Minister Budi Karya Sumadi said recently.

         The decision to reduce the dwell time was reached during a meeting chaired by Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan.

         The two and a half days include 12 hours for the pre-clearance process, one day for the custom clearance process and another day for post custom clearance.

         Of the three, post custom clearance is the most problematic.

         He, however, mentioned in certain cases, a longer dwell time could be allowed, such as in case of explosives that first have to be checked by the State Intelligence Agency (BIN), and bacteria-contaminated apple that should be quarantined.

         To help cut the dwelling time, a seaport should operate for 24 hours, more personnel should be deployed in regions, and the licensing process should be simplified.

         "We submitted these proposals to the Coordinating Minister in the meeting. The deadline will be two weeks when the presidential regulation is decided," he informed.

         A white book on cargo dwell time will be attached with the presidential regulation.

         The Coordinating Minister will appoint an official to coordinate with relevant ministries and institutions regarding reducing the dwelling time.

         Oza Olavia, Customs Director of the Customs and Excise Directorate General, said his office will expedite the customs process, including documentation and physical check-ups.

         He promised faster pre-clearance, customs clearance and post clearance processes.

         Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan recently summoned three ministers - Transport Minister Budi Karya Sumadi, Trade Minister Enggartiasto Lukita  and Communications and Informatics  Minister Rudiantara, to discuss way to reduce dwelling time at ports.

         Coordination is needed to create greater efficiency and integrated systems at port management. ***1***
(f001/INE/B003)
 24-09-2016 23:24:29