Ports in Indonesia

Its Relationship and Impact

towards Logistics Cost

Content
The Problem : Quality of Infrastructure and the Logistics
Bottleneck
Marine Transport & Logistics : Links and Nodes
Connectivity
Accessibility : The Issues
Problem in Indonesia Port
Connectivity Cycle : Improve Connectivity and Decrease
Logistics Cost by Improving Links & Nodes Performance
Palaran Container Terminal Samarinda Project Case : How
to Reduce Logistics Cost by Improving Port Performance

Quality of Infrastructure
Global Competitiveness Report 2013-2014
Country

Port Quality

Road Quality

Singapore

6.8

6.2

Malaysia

5.4

5.4

Thailand

4.5

4.9

Indonesia

3.9

3.7

Vietnam

3.7

3.1

Philippines

3.4

3.6

Remarks : 1 = extremely under-developed, 7 = efficient by international standards

Even though they are key infrastructure for the archipelagic country,
Indonesian seaports are relatively small and outdated compared to other main
countries in South East Asia.
Connectivity to the hinterland : constrained with bad road condition and high
traffic density.
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Road, Port & Logistics Flow

ROAD
Bottleneck

HINTERLAND

PORT
Bottleneck
VESSEL

LOGISTICS FLOW

RESULT :
Indonesia logistics cost is
27% from GDP,
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Logistics Cost Component

30.00%

25.00%

5%

20.00%

15.00%

10%

10.00%

5.00%

0.00%

12%

ADMINISTRATION COST
CIQP (Customs, Immigration,
Quarantine, Port) activities.
INVENTORY COST
49% Holding Cost
25% Risk & Damage Cost
26% Storage

TRANSPORTATION COST
72% Land
20% Water
1.5% Air
0.5% Rail

Total Logistics Cost di Indonesia 2011 : Rp. 1,829,669 Milyar

5

Marine Transport & Logistics

Links and Nodes Connectivity
DESTINATION

Connectivity

ORIGIN

LINKS

NODES

LINKS

NODES

LINKS

Core concept of connectivity : How accessible is an area?

How easy to ship cargoes? How easy to move?
6

Accessibility Index per Province

Connectivity Report on Domestic Shipping, Worldbank & ITS, 2012
Aceh

Sumatra
Utara

Riau

Sumatra
Barat

Gorontalo

Sulawesi
Barat

Kalimantan
Barat
Kalimantan
Tengah
Jambi

Sulawesi
Utara

Kalimantan
Timur

Kep
Riau

Sulawesi
Barat

Kep
Belitung

Sulawesi
Tengah

Papua
Barat

Maluku
Utara

Papua

Maluku
Sumatra
Selatan

Bengkulu

Kalimantan
Selatan

Lampung

Sulawesi
Tenggara

DKI
Jakarta
Banten

Jawa
Barat

Papua

Sulawesi
Selatan

Jawa
Tengah

Jawa
Timur

Bali

Map Legend:
Nusa
Tenggara
Barat

Nusa
Tenggara
Timur

Accessibility Index : Volume of seaborne trade compare to distance between point to

point. Impact of accessibility is highest logistics cost in the lowest accessibility index
area.

Accessibility Index per Province

VERY HIGH

HIGH

MEDIUM

LOW

300.00

250.00

200.00

150.00

100.00

50.00

Domestic Container Throughput

Volume in TEU/Month

Surabaya and Jakarta handle most of container boxes from and to many
destination. Disparity of throughput in JKT and SUB compare to other port
due to the center of production and industry still in JKT and SUB.

Frequency of Sailing

Source : ITS & World Bank, 2012

Surabaya have the main role as the center of logistics connection to distribute
the cargo to eastern part of Indonesia and Jakarta is the center of logistics of
western part of Indonesia.
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Impact of Low Accessibility in the Sea Freight

Source: Quotes from domestic logistic company, 2012

Impact of low accessibility index in Indonesia is higher sea freight from

Jakarta-Padang (1000 km) compare to Jakarta-Hamburg (10,000 km).
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Imbalance Trade
Surabaya

Eastern Indonesia Ports

Shipping Line space utilization : Headhaul vs Backhaul in Percent

Higher of freight to eastern of Indonesia due to imbalance trade between

headhaul and backhaul.
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Infrastructure of Indonesian Ports

Port

Problem

Draft (m)

Development Plan

Batam

6-8

Under-developed

Development of new container wharf

Belawan

7-9

Congestion

Additional wharf, dredging and terminal

equipment.
Development of New Port at Kuala Tanjung

Saturated and channel

sedimentation

Develop new port in upstream of Musi

River

4-6

Congestion and Channel

Sedimentation

Develop new port in Temajo, additional

equipment in existing terminal

Banjarmasin

4-9

Saturated and Channel

Sedimentation

Additional wharf and dredging

Samarinda

6-7

Saturated and channel

sedimentation

Channel dredging program and

Development of MultipurposeTerminal in
Palaran.

Makassar

3-12

Saturated

Develop Makassar New Port.

Kendari

7-9

Saturated

New Terminal development in

Bungkutoko.

Sorong

10-12

Limitation of Wharf and Yard

Additional Wharf and Container Yard

Palembang

3.5-8

Pontianak

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Demand on Deep Draft

Main problem of Indonesian port is the draft of the wharf still insufficient compare to
main port requirements (draft 15.2 m) and ASEAN Port requirement (draft 12.5 m).
With the low draft, port can only serve small vessel with low economic of scale. It will
impact in high sea freight level.
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Port Development Challenges

Labor regulation creates high
cost but low productivity
Concession Regulation still not
clear.
Low vertical & horizontal
coordination between
Government and DPRD
LEGAL
Land acquisition problem
ASPECT &

REGULATION

FINANCIAL
Limited Long Term Project
ASPECT
Financing : Long term Project
(50-75 years) financed by
short term loan (8 years)
Port tariff require approval
from Associations (INSA,
APBMI, ILFA) Ideally should
be decided by Regulator

Poor road connection to

hinterland creates high cost
Limited Navigation Aid
(provided by MOT) unable to
support 24/7 activity
SUPPORTING Limited Channel depth
(provided by MOT)
INFRA-

STRUCTURE
SOCIAL
ASPECT

Reluctance from existing

terminal stakeholders
(Stevedoring, Forwarding &
Trucking Company)
Reluctance from ORMAS / NGO
supported by Political Party using
Environmental & Social Issues

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Connectivity Cycle
Improve connectivity and decrease logistics cost by improve
the Links & Nodes performance.

Port
Productivity
and Efficiency

Vessel Port Stay

shorter
Turn Round
Voyage
decreases

Vessel Operation
Cost Decrease

Investment in
Port Increases

Cargo Volume
Increases

Sea Transport
Capacity
Increase

Sea Freight (FIO)

cost decreases

Demand
Increases

Goods price
declined

Logistics Cost
decreases
16

Project Case :
Palaran Container Terminal in Samarinda

New container terminal in Samarinda,

developed by BOT scheme and PPP
Project.
Captive market 170,000 teus in 2009
with 15% pa growth rate
Developed and operates by Private
Company, PT Samudera Indonesia Tbk.
Local government support for Access
Road and supporting facilities
Port authority support in access
channel maintenance
Exclusiveness to operate terminal
17

Project Case : Public Private Partnership

Palaran Container Terminal - Samarinda
OLD PORT

NEW PORT

18

Access Road Development

PREVIOUS CONDITION
2010

2011

Port highway access to hinterland

development
19

Reduce Administration Cost : E-Payment

Sophisticated terminal operation IT
System (ETOS), developed in-house
by Samudera Indonesia
Host-to-host Billing system in cooperation with Bank Mandiri
Benefits :
Minimize face-to-face payment
services and queues
Able to perform payment
transactions anywhere &
anytime by Electronic Payment
and/or ATM
Safer & more secure transaction
Bank reconciliation can be done
easily
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Palaran: Reduced Logistics Cost

Samarinda Port
(Old Port)

Variable

Palaran Port
(New Port)

Waiting Time

48 hours

4 hour

Port Service Time

12 hour per day

24 / 7

Gross Crane Productivity

24

Port Stay

5-6 days

1-2 days

Dwelling Time

10 days

4 days

Around Trip Voyage (JKTSMD-JKT)

19 days

11 days

Potential call per vessel

per year

18 call

30 call

Freight Rate JKT-SMD

Rp. 9 Juta/teus

Rp. 4.5 Juta/teus

TPK Palaran can significantly improve productivity, reducing vessel operational cost
and resulting in decrease of shipping rates that will also reduce logistics costs, and
impact to the price of basic needs (penurunan harga kebutuhan pokok).

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Impact of Port Productivity

Improve 66% Sea Transport Capacity

by improving Turn Round Vessel
(TRV).
Reduce 50% Transportation/Freight
Cost by improving productivity
Reduce Administration Cost by IT
System implementation.
Reduce 60% Dwelling Time by
improving flow of goods.

LOGISTICS COST

Based on TPK Palaran experience,

the New Port Facilities impact :

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Sea-Toll Connectivity : Jokowis Proposal

ORIGIN

Improving Ports
connectivity
infrastructure

TOLL LAUT Connectivity

Improving
Ports
Infrastructure

Increasing Sea
Transport
Capacity

DESTINATION

National
Logistics
Efficiency

THANK YOU

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