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Chapter 3: Overview of Maritime Transport System in Indonesia

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Study on the Development of Domestic Sea Transportation and Maritime Industry in the Republic of Indonesia (STRAMINDO) Final Report Summary CHAPTER 3: OVERVIEW OF MARITIME TRANSPORT SYSTEM IN INDONESIA FLEET • According to the Lloyd’s Register, Indonesian vessels have been imported from many • There are two depository organizations for countries. Japan made vessels are the majority registered Indonesian flagged vessels. These at 56%, Indonesian-made vessels at 19% and are the DGSC registry and the BKI registry. A EU-made vessels at 15%. ship over 7GT will be registered with the DGSC or its local ADPEL or KANPEL offices. SHIPPING COMPANIES Indonesian government regulation stipulates that a vessel over 100GT, or over 20m long, be • Number of Indonesian shipping company is registered with the BKI or its offices. 3,078 in 2001 which represents an increase of 3.3 times since 1998, due to the deregulation of • DGSC 22,382 vessels (9.24 million GT) shipping companies in 1988. Number of owned • BKI 7,167 vessels (7.09 million GT) vessels however increased by only 1.3 times • Lloyd’s 1,019 vessels (4.2 million DWT) during the same term. • The number of INSA members is 914. • The operational fleet is determined from DGSC sources with corresponding adjustments. The Companies with less than three vessels current fleet is estimated to be 6,653 thousand accounted for 82% of INSA members, while DWT for freight fleet and 450 thousand GT for those with 10 or more ships accounted for a passenger fleet. In terms of ship type, the mere 4%. The INSA Members account for 70% domestic fleet is comprised of mainly of the DGSC registered vessel tonnage. The conventional vessels and tankers. In regard to shares of owned and chartered vessels among vessel flag, 3,576 thousand DWT is registered INSA members were 80% and 20%, respectively. with Indonesian flags while 3,047 thousand DWT Leasing arrangements were not popular. are registered as non-Indonesian flags. All Figure 3.2 Number of Shipping Companies in passenger ships fly an Indonesian flag. Indonesia Figure 3.1 Domestic Fleet by Type i 3500 3000 2,500 2500 2000 2,000 1500 1000 1,500 500 Compan Shipping of No. 0 '000 DWT 1,000 8 9 1 2 3 4 5 7 8 9 0 1 8 9 198 19 1990 199 199 199 199 19 1996 199 199 199 200 200 500 Genreal S h ipping Com pany Specialized S hipping Company T raditional S h ipping Com pany - Container Conventional Bulker Barge Tanker Others(GT) DWT 733 2,440 587 717 2,146 450 INTERVIEW SURVEY OF SHIPPING COMPANY • The Indonesian domestic shipping industry has • To better understand the activities of Indonesian always suffered from fleet shortage. But its domestic shipping companies, an interview dependence on foreign fleet varies from time to survey was carried out by visiting selected time. In 1986 after the scrapping policy, the companies and asking questions concerning foreign fleet share was 8.4% or 0.8 million tons, both the company and its vessels. The survey while the share jumped to 18.4% or 2.8 million covered 80 shipping companies and 323 vessels, tons in 1990 after the implementation of Pak Nov which is roughly half of the target samples (see 21/88. Thereafter, until today, Indonesia has Table 3.1). recorded high dependency rates around 50%. • From the analysis of shipping companies and • According to the UNCTAD Secretariat report, 98 their business experiences, companies can be vessels (1.3 million DWT) are registed as grouped into dynamic and static companies. The flagged-out vessels which accounts for 16% or former has a growth strategy while in terms of 29% in terms of number of units and dead weight increasing employees and expanding services tonnage respectively. Many flagged-out vessels while the latter sticks to their optimal size of are actually assigned in domestic shipping. operation regardless of history. 5 Study on the Development of Domestic Sea Transportation and Maritime Industry in the Republic of Indonesia (STRAMINDO) Final Report Summary • The intention to increase fleet size is stronger INFRASTRUCTURE among general cargo shipping companies followed by container shipping companies and • There are around 2,100 ports in Indonesia. 111 passenger shipping activities. ports are managed and operated by PELINDO. 141 ports are international ports (i.e. open to • Shipping companies considered “Revenue foreign trade). Increase”, “Cost Cutting” and “Marketing” as priority management issues. Safety in operation, • JICA study team visited 14 of the 25 strategic organizational strength and human resource ports. Problems in port facilities and development are rated highly as well. Fleet management have been surveyed and expansion, financial resources, environment and discussed with port administrators. new technology are rated as the least priority • The case of anchorage at Tg. Priok was chosen issues. as a case Study. Analysis of satellite photograph, • Shipping companies considered “Regulation and visual observations form survey boat, and its Implementation”, “Old Age of Vessels” and interview survey of 20 ships at anchorage was “Lack of Fund” and “Poor Port Operations” and conducted to clarify the problems of ships at the “High Rate of Invisible Cost” are rated as the anchorage. primary concerns that impede the improvement • According to the satellite photograph, ships at and modernization of their company. Many anchorage were confined to a very narrow area shipping companies ranked “Old Age of Ships” of water and such condition is considered very and “Lack of Fund” as the most difficult dangerous from a safety point of view. During the impediments which implies that many companies time the satellite image was taken there were 76 are not satisfied with their ships. ships at anchorage and 72 ships are engaged in domestic shipping. Table 3.1 Rate of Response in Interview Survey • According to the result of interview survey of 20 Number of companies ships at anchorage, 10 (50%) ships were waiting Answered Answer Rate for berth, 6 (30%) ships were waiting for cargo and 3 (15%) ships were waiting for repair. Bulk 11 48% Container 16 32% General 28 104% Figure 3.3. Type of Ships at Anchorage Cargo Others Tanker 13 33% 12% Passenger 12 43% Total 80 48% Taker/LPG 13% General Cargo Table 3.2 Priority Issues and Impediments 41% Priority Number of Impediments Number of Issues cases Cases Car Carrier 7% Revenue increase 46 Regulation & its 44 implementation Cost cutting 46 Old age of ships 43 Bulker Marketing 45 Lack of fund 35 Container 20% Safety in operation 31 Poor port operations 32 7% Organizational 29 Invisible cost (High 32 Figure 3.4. Size of Ships at Anchorage strength rate) 3,000 GT over 500 ~ 999 GT 5% 4% Human resource 26 Lack of skills of 28 development seafarers Fleet expansion 20 Shortage of vessel 18 1,000 ~ 1,999 Financial resources 15 Lack of manpower 14 GT Environment al 10 Lack of information 14 36% consideration technology New technology 4 Others 1 introduction 2,000 ~ 2,999 GT 55% 6 Study on the Development of Domestic Sea Transportation and Maritime Industry in the Republic of Indonesia (STRAMINDO) Final Report Summary Figure 3.5. Waiting Vessels at Tg. Priok Port CHAPTER 4: EXISTING SHIPPING SERVICES shipping companies ships are currently engaged CLASSIFICATION in domestic container trade. About half of • In this study, Indonesian domestic shipping is container haulage is done by liner services. categorized by shipping business licenses and • Volume of general cargo is still high. There are shipping service characteristics into 5 groups many small-scale shipping companies that own 2 as follows; (1) Inter-island freight shipping, (2) general cargo ships. Inter-island passenger shipping, (3) Special Shipping, (4) Pioneer Shipping, (5) Traditional • Almost all dry bulk traffic is transported by barge, Shipping. and so the number of bulk carrier is small. • Overseas shipping by Indonesian operators is • Pertamina Shipping, a special shipping company, included in this study as well, due to its close ties with owned vessels as well as chartered vessels to domestic shipping. from foreign and national shipping lines. Thus, Indonesian operators must compete with foreign INTER-ISLAND FREIGHT SHIPPING carriers even in domestic fuel trade. • According to DGSC and INSA database, 34 Figure 4.1. Container Shipping Routes 7 Study on the Development of Domestic Sea Transportation and Maritime Industry in the Republic of Indonesia (STRAMINDO) Final Report Summary Table 4.1. Analysis of Ship Type DWT Draft Speed Handling Equipment Bulk career vessels at There are two distinct Draft of bulk carrier least 20 years old have vessel groups (under Speed of vessel is Bulk Carrier vessels have 6 ~ 8m their own gear for cargo 2,000 DWT and over between 9 to 12 knots drafts. handling. But new 11,000 DWT) vessels don’t have. There are many small Draft of container vessels vessels under 7,000 Most container vessels Container are only 4 to 8 m, and all Speed of vessel is DWT. Size of newly have their own gear for Carrier new vessels have almost between 9 to 12 knots introduced vessels are container handling. less than 6 m draft. 3,000 ~ 5,000 DWT. Speed of vessels at least Most vessels have their Draft of vessels are only Most vessels are 5,000 ~ 20 years old is more than own gear for cargo General 6 to 8 m, and all new 15,000 DWT and 20 ~ 30 10 knots. But speed of handling. Half of new Cargo Carrier vessels have almost less years old. new vessels is diverse vessels have their own than 6 m draft. knots. gear. Most vessels are 5,000 ~ Drafts of tankers vessels Speed of vessel is more Tanker 15,000 DWT and 20 ~ 30 Vessels have pumps.
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