Indonesia plans to beef up its port services by consolidating cargo traffic from various facilities across the country at Tanjung Priok in North Jakarta, its largest and most advanced seaport.
The move to centralise transshipment activities is aimed at taking over a slice of the market currently dominated by Singapore, The Jakarta Post reported yesterday.
Transportation Ministry official Antonius Tonny Budiono said the government and units of state- owned port operator Pelabuhan Indonesia (Pelindo) are meeting to discuss plans to create an "integrated chain port".
This involves consolidating the export of cargo from ports such as Bitung, in North Sulawesi, and Sorong, in West Papua, at Tanjung Priok, which now handles about half of the country's export shipments.
Mr Antonius, who is director-general of sea transportation, said this will improve efficiency and make Tanjung Priok more attractive for shipping companies.
"The transshipment sector has long been dominated by Singapore (but) if the commodities originate in our country, why can't we handle them?" he told The Jakarta Post.
His comments followed recent reports that Malaysia's Port Klang Authority (PKA) plans to build a new seaport, next to Port Klang, the country's largest port.
The RM200 billion (S$64 billion) project, located on Pulau Carey, is critical if Malaysia wants to compete with Singapore for a larger share of the cargo trade, PKA chairman Kong Cho Ha had said.
HANDLING OWN EXPORTS
The transshipment sector has long been dominated by Singapore (but) if the commodities originate in our country, why can't we handle them?
MR ANTONIUS TONNY BUDIONO, Transportation Ministry official, on improving efficiency at Tanjung Priok port.
Singapore, widely known as the world's busiest transshipment hub, accounts for almost a seventh of total global container transshipment.
Figures from the Maritime and Port Authority showed that Singapore's annual container throughput held steady last year at 30.9 million TEUs, or 20ft equivalent units. By comparison, container traffic at Tanjung Priok over the same period was 5.4 million TEUs, up from 5.2 million TEUs in 2015.
President Joko Widodo has made improving Indonesia's maritime infrastructure a key priority since he was elected in 2014.
Plans to jointly develop a deep- sea port in Patimban, West Java, were also brought up during a bilateral meeting between Mr Joko and Japanese Prime Minister Shinzo Abe in Bogor this month.
Indonesia, however, has also suffered setbacks in the sector, most recently when a plan to develop an international port in North Sumatra was stalled earlier this month.
Industry players and experts remain sceptical about the move, adding that the plan to consolidate cargo traffic at Tanjung Priok will be unlikely to have a negative impact on Singapore in the immediate future. This is because Singapore is still more strategically located than Tanjung Priok port.
Veteran industry analyst Christianto Wibisono called it a massive endeavour that will involve a sea change not only in port operations but also how business is conducted in Indonesia.
"Indonesia must ensure costs are lower and the service, faster... Unloading at Tanjung Priok port can now take up to five days, multiple times that in Singapore," he said. "So, sure it's doable but it is a very big challenge."
An Indonesian government official familiar with the industry said yesterday that Indonesia's "stance is to try to complement, not to compete" against its close neighbour.
Speaking on condition of anonymity, he added: "It is not realistic. Singapore is the world's No. 1 in terms of the ease of doing business, and No. 3 in terms of innovation."
Correction note: An earlier version of the story stated that a bilateral meeting between Mr Joko and Japanese Prime Minister Shinzo Abe in Bogor was held last month. This is incorrect. The meeting was held this month. We are sorry for the error.