Indonesia's ports face connectivity challenges to reduce logistics costs

PORTS UNITY INDONESIA
INDONESIA PORT CORPORATION II
JAKARTA, APRIL 2011

Pelindo II / Logistics Hubs 2

OVERVIEW

95 % of All Our Domestic Cargo and

International Trade Carried by Sea
Transportation

BIG ISSUE
How to reduce logistic cost
Connectivity

THE GLOBAL COMPETITIVENESS INDEX 2010
Overall Index Basic Efficiency Innovation &
requirements enhancers sophistication
Country factors
Rank Score Rank Score Rank Score Rank Score
Switzerland 1 5.63 2 6.05 4 5.41 2 5.71

Sweden 2 5.56 4 5.98 5 5.32 3 5.67
Singapore 3 5.48 3 6.05 1 5.49 10 5.07
United States 4 5.43 32 5.21 3 5.46 4 5.53
Germany 5 5.39 6 5.89 13 5.11 5 5.51
Japan 6 5.37 26 5.35 11 5.17 1 5.72
Finland 7 5.37 5 5.97 14 5.09 6 5.43
Netherlands 8 5.33 9 5.82 8 5.24 8 5.16
Malaysia 26 4.88 33 5.19 24 4.72 25 4.45

China 27 4.84 30 5.27 29 4.63 31 4.13
Brunei 28 4.75 20 5.48 67 4.05 72 3.42
Darussalam
Thailand 38 4.51 48 4.82 39 4.41 49 3.78
Indonesia 44
44 4.43 60 4.62 51 4.24 37 4.06
Sumber: World Economic Forum, 2010 Pelindo II / Logistics Hubs 6

LOGISTICS PERFORMANCE INDEX 2010
2010 LPI 2007 LPI
Economy LPI rank LPI score % of highest LPI rank LPI score % of highest
performer performer
Germany 1 4.11 100.0 3 4.10 97.1
Singapore 2 4.09 99.2 1 4.19 100.0
Sweden 3 4.08 98.8 4 4.08 96.4
Netherlands 4 4.07 98.5 2 4.18 99.6
Luxemburg 5 3.98 95.7 23 3.54 79.5
Switzerland 6 3.97 95.5 7 4.02 94.5
Japan 7 3.97 95.2 6 4.02 94.8
United Kingdom 8 3.95 94.9 9 3.99 93.8
Malaysia 20 3.44 78.4 27 3.48 77.7
China 27 3.49 79.9 30 3.32 72.8
Thailand 35 3.29 73.6 31 3.31 72.5
Philippines 44 3.14 68.8 65 2.69 52.9
India 47 3.12 67.9 39 3.07 64.9
Indonesia 75 2.76 56.5 43 3.01 63.0
LPI Customs Infrastructure International Logistics Tracking & Timeliness

shipments quality & tracing
Economy competence
Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score
Indonesia 75
75 2.76 72 2.43 69
69 2.54 80 2.82 92 2.47 80 2.77 69
69 3.46
FACT FINDING
Container Shipment cost:

Padang – Jakarta = US$ 600
Jakarta – Singapore = US$185
It is cheaper to ship mandarins to

Jakarta from China than from
Pontianak
Cement in Papua is 20
times more expensive than
in Jakarta because of
shipping costs


FACT FINDING

INTERNATIONAL CONNECTIVIY :
Tanjung Priok is Reaching Full Capacity
Handle 70% of Indonesia’s general

cargo/container exports and imports.
Major commodities (Coal, LNG, etc) go
directly from on Kalimantan and
Sumatra.
Financial crisis and improvements in container efficiency have eased congestion.

However there are still serious issues in the physical lay-out which make it difficult for
larger container ships to enter the port.
Tanjung Priok will reach it’s capacity within several years.

Therefore plans to locate and develop a new deep water port need to proceed
quickly.

Inter-island connectivity
 Key issue in archipelagic country
Island such as Indonesia
 High cost and unreliable inter-island
shipping services are a major
constraint on getting food and basic
Island
consumer goods to remote (usually
poorer) islands and bringing
commodities to processing facilities
and markets (usually on Java and
Island
overseas)

PORT PROBLEM IDENTIFICATION

BREAKING THE PROBLEM : PORT SECTOR 24/7
LOW PRODUCTIVITY
LABOUR
ACCESS
STEVEDORING
TURN AROUND CHANNEL
COMPANY
TIME
INAPORT NET HANDLING
EQUIPMENT
ICT PELINDO HANDLING METHOD

& OPERATION
DWELLING TIME
CONTAINER IMPORT
ACCES ROAD
PORT CONGESTION
TRANSHIPMENT
CONTAINER
IMPLEMENTATION
NSW
PORT FACILITIES
PORT NETWORK

PORT EQUIPMENT COMPARATION
OTHER PORT
PT PELINDO II


DERMAGA “B” KADE 30

POOR PORT FACILITIES
NO MODERN
LOW PRODUCTIVITY SHIP WILL
COME
STATE OF THE ART OF

ICT

OVERVIEW CONCLUSION

OUR PORTS ARE NOT SERVING THE NEEDS OF OUR PEOPLE AND
OUR ECONOMY
WE MUST NOT EXPECT USER TO PAY MORE FOR PORT SERVICE

THAN THEY DO IN NEIGHTBOURING COUNTRIES
EVERYONE IN THE SECTOR NEEDS TO ACCEPT THAT WE ARE ALL

PART OF PROBLEM AND WE ALL NEED TO CHANGE

THE VISION

Ink-spot approach
INTER-ISLAND CONNECTIVITY NEEDS TO BE (appropriate for
REGIONALLY DIFFERENTIATED sparsely populated
areas)
Fishbone approach
(appropriate for
high density
population areas) Mostly fishbone on Java and Sumatra, ink-
spots in Eastern Indonesia
HOW TO BALANCE REGIONAL DEVELOPMENT AND INCLUSIVE GROWTH?
Successful economies ...

Maximize growth
through unity not Connecting the Growth Surabaya Jakarta Makassar
uniformity Poles
(inclusive
development) Maluku
Expand growth by
connecting regions Connecting Sulawesi Papua
through inter-modal lagging regions to

and efficient supply the growth poles
Makassar
chain systems
Kendari
Connecting remote Makassar
Make high growth areas with basic
inclusive services and
infrastructure to enjoy Ambon
Manado
benefits of growth
Economic integration is the best way to get both the immediate benefits of the concentration of
production and the long-term benefits of a convergence in living standards
BREAKING THE PROBLEM DOWN:
3 TYPES OF CONNECTIVITY
Town City
Town Island Asia
City
Town Town Indonesia

International Europe
City Island Gateway
Town
City
Town
Town America
Island
Town City
1 Intra-island 2 Inter-island 3 International

LOCAL Connectivity NATIONAL Connectivity GLOBAL Connectivity
WHAT PORT USER NEEDS

WHAT PORTS USER NEEDS
Terminal that can Handle the right size of ships;

Ultra large container ship, Aframax Tankers
Cape size bulk carriers, our provision of facilities for all these are
inadequate
Ports that do not make ships wait for berths
Productivity levels across all our ports that match international best practice
System and Services that provide shipping with confidence their cargo
will enter and leave the port without delay and when it is stored it is
safe and secure

PORT POLICY FOCUS

PORT POLICY FOCUS
IMPROVE PRODUCTIVITY AND REDUCE COST
PROVIDE MORE PORTS AND TERMINALS
DEVELOPING OUR HUMAN RESOURCES
MODAL SHIFT AIMS TO REDUCE ENVIROMENTAL BURDEN BY FURTHER

USING OF COASTAL SHIPPING AND RAILWAY

DEMAND FORECAST

INDONESIAN CONTAINER TRAFFIC FORECAST
60
50
40
30
20
10
Sources : Indonesia Infrastructure Inisiative

CONTAINER TRAFFIC FORECAST
PORT OF TANJUNG PRIOK
FORECAST
DATA
Sources : David Wignal Associates

INDONESIA COAL FORECAST
Juta Ton
FORECAST
DATA
Source : AT Kearney

COAL FOR PLN
Juta Ton
160
Existing PLN power plant
Planned PLN power plant 150
Pelindo II focus area
140 142
134
126
120 118
111
103
100
95
87
80 79
71
60 62
54
46
40
36
29
20 22
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: AT Kearney Pelindo II / Logistics Hubs 33

INDONESIAN CPO FORECAST
Sources : Indonesia Infrastructure Inisiative

FORECAST HEADLINES
2010 2030
400 million 1.200 million
tones/annum tones/annum
COMMODITY 2010 2030

COAL (Mil. Tones) 250 500
CPO (Mil. Tones) 25 150
IMPORTED PETROLEUM (Mil. Tones) 107
CONTAINER (Mil. Teu’s) 8 42
KEY CHANGES
• Coal will increase by 200%
• CPO volume will increase 600%
• Large scale petroleum product imports
• Container volume will increase 500%
Source : Indonesia Infrastructure Initiative

MAJOR NEW TERMINALS
2010 - 2030
MAJOR COMMON USER COAL TERMINALS
• Attracting added value
• Enabling exports
• Blending
LARGE EXPANSION OF CONTAINER CAPACITY
• Specialist facilities across country
• Large transshipment capability
• Direct calls to Intrasian/US/Europe
PETROLEUM IMPORT TERMINALS
• Mainly common user
CPO TERMINALS
• Common user as well as dedicated
Source : Indonesia Infrastructure Initiative

PORT DEVELOPMENT 2010 – 2030

IN INDONESIA

2030 ADDITIONAL PORT CAPACITY REQUIREMENT
9 KM OF CONTAINER QUAY IN WEST JAVA WITH OVER 120 QCC (QUAY CONTAINER
CRANE) AND OVER 900 HA OF STORAGE AREA
4 KM OF CONTAINER QUAY IN EAST JAVA WITH OVER 55 QCC AND 400 HA OF

STORAGE AREA
80 MTPA OR MORE PETROLEUM PRODUCTS BERTH WITH OVER 700 HA OF STORAGE

TERMINAL ON JAVA


CONTAINER TERMINAL 2011 - 2030
National hub port Feeder Port

COAL TERMINAL 2011 - 2030
PURPOSED NEW COAL TERMINAL EXISTING COAL TERMINAL

GRAIN TERMINAL 2011 - 2030
PURPOSED HUB GRAIN TERMINAL

CRUDE PALM OIL TERMINAL 2011 - 2030
PURPOSED HUB CPO TERMINAL

PORT DEVELOPMENT 2010 – 2015

IN PELINDO II

URGENT PROGRAM
Optimalisasi Kapasitas Terminal Eksisting
Relokasi Bangunan Yang Tidak Optimal
HARD INFRASTRUCTURE Pembuatan ICD di Marunda
Pembuatan Parkir Truk di Marunda
Percepatan Penyelesaian JORR seksi E1, E2 dan NS
Penyelesaian permasalahan lahan eks TPU Dobo
Reduce Dwelling Time 5.5 hr  3 hr
E – logistic
SOFT INFRASTRUCTURE
Restrukturisasi TKBM
Pembatasan Empty Container di KBN

URGENT PROGRAM
Optimalisasi Kapasitas Terminal Eksisting
OPTIMALISASI TERMINAL Tambahan Kapasitas KETERANGAN

(Juta TEUS)
JICT 0.7 Penambahan Yard 12 Ha

TPK KOJA 0.3 Penambahan Yard 1.3 Ha
OJA + SAMIN 0.5 Alih fungsi sbg International Container
TPK 2 JICT 0.2 Alih fungsi sbg Domestic Container
Tambahan 1.7
Terminal Eksisting = 4.5 Juta TEUS

Optimalisasi Terminal = 1.7 Juta TEUS
Volume Tahun 2014 =
Total Kapasitas = 6.2 Juta TEUS 6.1 Juta TEUS
TERMINAL KALIBARU SANGAT URGENT UNTUK SEGERA DIBANGUN

OPTIMALISASI KAPASITAS TERMINAL EKSISTING
JICT TPK KOJA
0JA & SAMIN
TPK 2 JICT
MTI
Internasional Domestik
Domestik Internasional

RELOKASI BANGUNAN MILIK INSTANSI PEMERINTAH / BUMN
BEA CUKAI
PELNI
KBN
BULOG
KESEHATAN
DKB GALANGAN IV ADPEL
RELOKASI BANGUNAN TNI DAN POLRI
POLRES KPPP
LANTAMAL
PD DAYUNG
PUSDIKPOL
AIRUD
SATPOL AIR
KOTERM/
YON ANG AIR BEKANG DISHIDROS KOLINLAMIL

PORT OF TANJUNG PRIOK JICT EXPANSION PLAN
PERLUASAN CY 12
Ha
Rencana Jalur ke JICT
Jalur Rel Eksisting
Terminal Pasoso
Ke/Dari Dermaga
Fasilitas Lainnya (18 Ha)
Ke/Dari Gede Bage -Lahan Parkir

(Bandung) -Gate Out/In
-Jalur KA
PROCUREMENT OF EQUIPMENT PROGRAM 2011 - 2012
PORT OF TANJUNG PRIOK

PROCUREMENT OF EQUIPMENT PROGRAM
PORT OF PANJANG
1) 4 units Gantry Jib Crane 1
2) 1 unit QCC Twin Lift 1
3) QCC Eksisting 1

PORT OF JAMBI
1) 2 units Fixed Luffing Crane

2) 3 units RMGC

PORT OF PONTIANAK

2) 3 units RMGC

PORT OF TELUK BAYUR
1
Wharf 5
2
1
Wharf 6
2 2
1
2) 3 units RMGC
1) 3 units Gantry Luffing Crane

2) 3 units RTGCPelindo II / Logistics Hubs 55
PORT OF PALEMBANG

2) 3 units RMGC

NEW CONTAINER TERMINAL KALIBARU
URAIAN TAHAP I TAHAP II TAHAP III

Container Container Oil & Gas
(2011 – 2015) (2015 – 2017) (2017– 2019)
INFRASTRUKTUR
- WHARF (Draft -18mMLWS) 2.200 m’ 1.500 m’ 800 m’
- BACK UP AREA 168 ha 90 ha 48 ha
- KAPASITAS TERPASANG 3.3 Juta TEU 2.25 Juta TEU

NEW CONTAINER SORONG – PAPUA
(CAN HANDLE UP TO 3000 TEUS CAPACITY)
AMBON JAYAPURA
BITUNG
BIAK
FAK FAK
EAST CONTAINER
REGIONAL HUB
SORONG
NABIRE
TERNATE
URAIAN TAHAP I TAHAP II TAHAP III
Container Container Oil & Gas
(2011 – 2015) (2015 – 2017) (2017– 2019)
INFRASTRUKTUR
- WHARF (Draft -18mMLWS) MARAUKE
2.200 m’ 1.500 m’ 800 m’
SAUMLAKI - BACK UP AREA
- KAPASITAS TERPASANG
168 ha
3.3 Juta TEU
90 ha
2.25 Juta TEU
48 ha
MANOKWARI

TOTAL CONCEPT CONNECTIONS E-LOGISTICS INFORMATION SYSTEM
GOVERNMENT
SENDER BANK
AGENCY
PELINDO IV
RECEIVER
NSW
OTHERS LOGISTIC PROVIDER
PELINDO III
E-LOGISTIK FOREIGN
INDONESIA E-LOGISTIK
 TRUCKING
PELINDO II  OTHERS CARRIER
SIMOPEL
DATA SHARING :
 CDC • Legal Document/Approval
SIMTEK PELINDO I
 CFS • Tracking/Tracing
 DEPO
• Cargo Monitoring
SIMPERS • Service/Facility Availability
• Billing
SIMKEU
• Information

THANK Y U

Indonesia's ports face connectivity challenges to reduce logistics costs

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PORTS UNITY INDONESIA

INDONESIA PORT CORPORATION II

JAKARTA, APRIL 2011

Pelindo II / Logistics Hubs 2

Pelindo II / Logistics Hubs 3

95 % of All Our Domestic Cargo and

Pelindo II / Logistics Hubs 4

How to reduce logistic cost

Pelindo II / Logistics Hubs 5

Switzerland 1 5.63 2 6.05 4 5.41 2 5.71

Malaysia 26 4.88 33 5.19 24 4.72 25 4.45

Sumber: World Economic Forum, 2010 Pelindo II / Logistics Hubs 6

LPI Customs Infrastructure International Logistics Tracking & Timeliness

Container Shipment cost:

It is cheaper to ship mandarins to

Pelindo II / Logistics Hubs 8

Pelindo II / Logistics Hubs 9

Pelindo II / Logistics Hubs 10

Handle 70% of Indonesia’s general

Financial crisis and improvements in container efficiency have eased congestion.

Tanjung Priok will reach it’s capacity within several years.

Pelindo II / Logistics Hubs 11

Pelindo II / Logistics Hubs 12

PORT PROBLEM IDENTIFICATION

Pelindo II / Logistics Hubs 13

ICT PELINDO HANDLING METHOD

Pelindo II / Logistics Hubs 14

Pelindo II / Logistics Hubs 15

Pelindo II / Logistics Hubs 16

DERMAGA “B” KADE 30

Pelindo II / Logistics Hubs 17

POOR PORT FACILITIES

STATE OF THE ART OF

Pelindo II / Logistics Hubs 18

Pelindo II / Logistics Hubs 19

WE MUST NOT EXPECT USER TO PAY MORE FOR PORT SERVICE

EVERYONE IN THE SECTOR NEEDS TO ACCEPT THAT WE ARE ALL

Pelindo II / Logistics Hubs 20

Pelindo II / Logistics Hubs 21

Successful economies ...

through inter-modal lagging regions to

Town Island Asia

Town Town Indonesia

1 Intra-island 2 Inter-island 3 International

WHAT PORT USER NEEDS

Pelindo II / Logistics Hubs 25

WHAT PORTS USER NEEDS

Terminal that can Handle the right size of ships;

Ports that do not make ships wait for berths

Pelindo II / Logistics Hubs 26

PORT POLICY FOCUS

Pelindo II / Logistics Hubs 27

PORT POLICY FOCUS

IMPROVE PRODUCTIVITY AND REDUCE COST

PROVIDE MORE PORTS AND TERMINALS

DEVELOPING OUR HUMAN RESOURCES

MODAL SHIFT AIMS TO REDUCE ENVIROMENTAL BURDEN BY FURTHER

Pelindo II / Logistics Hubs 28

Pelindo II / Logistics Hubs 29

Sources : Indonesia Infrastructure Inisiative

Sources : David Wignal Associates

Pelindo II / Logistics Hubs 32