• Mr. President, Batam Entrepreneur Complains Batam-Singapore Container Fares Expensive

    Batampos.co.id – Singapore-based company dominates container transport services. Rates set by them. Entrepreneurs complain of being too high. The complaint was also conveyed by investors belonging to Africa South East Asia Chamber of Commerce and Singapore Business Federation to BP Batam.

    ZAITUN just came home to attend Ngopi Business (Ngobis) at Batam Center that afternoon. He was immediately busy with work in his office, PT Zona Asia Forwarding. A freight forwarding and expedition company in Batam. Before long, her cell phone rang. A prospective client contacted. He asked for the delivery of goods abroad.

    “This is a request for shipments abroad,” he told Batam Post after hanging up on Tuesday (15/8) afternoon.

    According to Zaitun, he has served mostly domestic and inter-island shipping. Among others to Jakarta, Surabaya, and Medan.

    As for export-import, he admitted not much understanding because so far not been able to conquer the competition. He’s been trying to expand, especially the Batam-Singapore forwarding business or vice versa. However, this woman never gets a ‘part’.

    “I do not know where the problem. So all this time I only get a request for document processing only. While shipping containers never, “he said.

    In fact, according to Olait again, freight forwarding services for export-import easier than domestic or inter-island. Because goods from outside do not require physical examination because of the status of Batam as Free Trade Zone (FTZ).

    In contrast, domestic or inter-island shipping services require physical inspection if goods are shipped from Batam to other parts of Indonesia. For the cost per container Jakarta destination, Zaitun gave an example, the size of 20 feet he gave the tariff of Rp 5.7 million. While the container size 40 feet Rp 9.5 million.

    “That’s a price for Cy-Cy ya. It includes all fees such as THC and LOLO. Clean. No more charges or additional fees, “he explained.

    Cy to Cy Service is a type of service where the fee paid to the expedition is the cost of Terminal Handling Charge (THC) and Lift On Lift Off (LOLO) at the port of origin and destination, as well as the cost of freight or ocean freight.
    Ocean Freight is the basic tariff of container shipping by ship from the port of origin to the destination port that is priced per container unit.

    Various freight rates that many complain that employers through Honorary Chairman of the Indonesian Employers Association (Apindo) Riau and Batam, Abidin. Also complained about the Africa South East Asia Chamber of Commerce and the Singapore Business Federation.

    Abidin said that until now the cost of transporting containers from Batam to Singapore and vice versa remained high. There has not even been any change since he opened this issue to the media a year ago.

    “It’s still expensive, not down and down,” said Abidin who was in Singapore when contacted last Saturday.

    Abidin said the high cost of container transport Batam-Singapore can make Batam become less competitive, even though Batam FTZ status.

    “Production costs become swollen. Transportation of goods alone consumes 18 percent of total production costs, “said Abidin.

    He called the cost of freight containers 20 feet from Batam to Singapore USD 555. While the size of 40 feet of USD 750. In fact, the distance Batam-Singapore is only 28 kilometers. Can be transported container within 2 hours.

    While the cost of transporting containers from Singapore to Malaysia which is more than 374 kilometers and takes 20 hours, for container 20 feet only USD 122, and 40 feet only USD 277.

    In fact, the cost of transporting the Batam-Singapore container is much more expensive than the cost of transporting containers from Jakarta to Malaysia. Though the distance and travel time further Jakarta-Malaysia. The distance is 1,296 kilometers and takes 2 days 22 hours on the way. But the cost for 20 feet container is only USD 450, and for 40 feet only USD 595.

    Not only that, compared to the cost of transporting containers from Singapore to Hong Kong which is much farther away, still more expensive Batam-Singapore. According to data Apindo, Singapore-Hongkong distance 2735 kilometers takes travel time 6 days 4 hours. However, the freight cost of 20 feet container is only USD 261, while 40 feet is only USD 366.

    When compared to the cost of transporting containers from Jakarta to Hong Kong, it is still much more expensive to transport containers from Batam to Singapore. In fact, the distance from Jakarta-Hongkong reached 3,313 kilometers, with a travel time of 7 days 11 hours. However, the freight cost of 20 feet container is only USD 420, while 40 feet USD 545.

    “The period of Batam only 28 kilometers that can be taken 2 hours is much more expensive than Singapore-Malaysia, Jakarta, Malaysia, Singapore and Hong Kong, and Jakarta-Hong Kong. It does not make sense, “said Abidin.

    Abidin hopes there is a long-term solution for this freight cost can be reduced to competitive figures. Because, as good as and whatever the facilities provided by Batam to investors, will not make Batam become more competitive if the tariff of goods is expensive.

    “How investors want to enter if their cost is higher, while competitors in other countries the cost of cheap container transport, the more difficult we compete,” said Abidin.

    Batam-Singapore container tariff that supermahal it has lasted four years. Entrepreneurs have no choice because nine companies serving Batam-Singapore container transport in Batam all apply high prices.

    Data Apindo, nine companies serving the Batam-Singapore container services are: Duta Freight International Pte Ltd, Batamindo Shipping & Warehousing Pte Ltd, Yusen Logistics (S) Pte Ltd, Megastar Shipping Pte Ltd, IG Logistics Pte Ltd, PSC Express Pte Ltd, Bayswater Shipping & Forwarding Pte Ltd, Infiniti Marine Pte Ltd, and Toll Global Logistics Pte Ltd.

    “Container transport companies are all owned by Singaporeans,” said Abidin.

    Previously, the Singapore-Batam container cost was only USD 200 for size 20 feet and USD 400 size 40 feet. Yet at that time the price of oil (BBM) is more expensive. While today, fuel is much cheaper, but the cost of transporting container Batam-Singapore and vice versa even more expensive.

    ***

    Chairman of the Indonesian Forwarder and Expedition Association (Gafeksi) Batam, Daniel Burhanuddin, recognizes the high cost of transporting container Batam-Singapore and vice versa. Especially those who use transportation services with door to door system. With this service, all document processing and transportation from the original warehouse to the destination warehouse is done by the service provider.

    “If described, door to door this goods brought from the warehouse in Singapore, then boarded the ship, arrived in Batam directly to the warehouse owner of the goods. So the owner of the goods know it’s okay, “explained Daniel while drawing illustrations on paper, Thursday (17/7).

    Because the door to door service, continued this Esqarada boss, the cost is greater. For containers of 20 feet the tariff is 400 SGD and the 40-ft container fare is between 600-650 SGD. Not including the cost of processing documents 41 SGD and 60 SGD. If ditotal it can penetrate the number 500 SGD to 20 feet and 750 to 40 feet.

    “This is where Singaporean businessmen take profits. Because they are contract makers, “he explained in his office.

    Daniel confirmed that container transport services are controlled by Singaporean entrepreneurs. Start ship owner until forwarding. They then make a contract type of door to door service. So the cost becomes bigger. This is what distinguishes the container transport service from Jakarta to Taiwan or Hongkong which is cheaper.

    “The rate is cheaper because of the CY-CY service. Meanwhile, from Batam-Singapore door to door, “he said.

    Daniel also revealed, the high cost of transporting container Batam-Singapore is not due to the existence of other costs are not official or the cost of stealth. All costs incurred are in compliance. Even port charges are fixed. However, there is a minimum requirement to transport containers.

    “For example, a minimum of 50 containers. It turned out that only 20 containers were transported. Well, the cost is still calculated 50 containers, “he explained.

    Naturally calculated fully because the cost incurred by the transport service providers of Batam-Singapore and vice versa the same when transporting containers in the condition of the ship is full of no.

    Then what is the solution to lower the cost of transporting containers? Daniel suggested the government or related agencies could intervene. The door to door service is converted into a door to port service. That way, the container shipping that is controlled by Singaporean entrepreneurs is not what they want.

    “If the door to port, after arriving in Batam we take over, take care of the documents themselves with the support of relevant agencies,” he said.

    ***

    Expensive logistics rates are also justified by the Chairman of the Association of Customs Experts (ATAK) Batam, Sunaryo. Logistics tariff is very high and it is caused by the lack of capacity of Port of Batuampar.

    “But in addition, high tariffs are also driven by the expensive tariffs that exist within the port services tariff of BP Batam. Here it is very expensive, not to mention the levies are not clear, “he said.

    While shipping businessman who is also Secretary II INSA Batam, Osman Hasyim see this problem not only located in the type of service, but there are many fundamental issues that must be solved in the future, if still want Batam more competitive.

    First, the industry in Batam mostly produces only electronic components and assembles small components. Likewise the garment and other industries, so the volume of goods for export is relatively small. In contrast, the volume of industrial raw materials is also not large.

    This condition makes the container transport service provider from Batam to Singapore and vice versa still apply the full tariff of each carrier, even though the ship they use is not full of cargo. Because the cost of transport remains the same when the ship contains full containers or just a few containers only. In other words, small volumes triggered the high cost of carrying container Batam-Singapore and vice versa.

    Second, the condition of the port in Batam is not possible to be abandoned large bertonase ship. Large ships carrying cargo in large quantities can only lean on the ports of Singapore and Malaysia.

    Inevitably, the containers containing the raw materials of production and the material needs supplied for Batam, should use a relatively small sized launch ship. The average capacity is only 100 containers.

    This condition is used by Singapore companies to monopolize the path. Moreover, the port in Batam has not been eligible to be transshipment as in Singapore and Malaysia. The port capacity is very small, ie only 500 thousand TEUs (twenty-feet ewuivalent units) per year.

    If maximized it can be up to 1.5 million TEUs. But other infrastructure is not yet supportive. Starting from the limitations of the crane to the depth that does not allow large tonnage vessels to lean in Batuampar container harbors.

    North Pier Batuampar for example. The pier seet pile has a length of 305 meters with a width of 101 meters. While the pier pile pier is 365 meters long, 35 meters wide. On paper, the depth of 1-12 meters allows the 35,000 tonne DWT (General Cargo) berth to be docked. But the fact is, large bertonase vessels difficult to dock because the more shallow.

    Likewise with the South Pier. The size is pretty long. Reached 400 meters. But the capacity is less than 7,000 GT with a depth of less than six to nine meters.

    Compare with the port in Singapore which annually handles more than 30 million container TEUs, 30 million tons of conventional cargoes, 200 thousand tons of petroleum, and 15 million tons of non-oil and bulk cargo.

    Capacity of the Port of Singapore is also still being improved. It is even designed to be the largest container port in the world with a capacity of 65 million TEUs per year. Interestingly, the depth of the cargo port in Singapore averaged over 16 meters so that it can be vessed by a boat loaded up to 18,000 TEUs.

    Compare also with the port in Malaysia. Last year, Port Klang alone became the world’s 12th busiest container port. The port handles 13.2 million TEUs, up 10.8 percent compared to 2015. The maximum capacity is 16 million TEUs.

    In fact, Malaysia is now strengthening its status as the strongest maritime nation in Asia. They are building the Melaka Gateway megaproject that is estimated to be completed by 2019. This megaproyek is equipped with a giant port on Carey Island.

    Construction of the port alone, the kingdom of Malaysia poured funds of 200 billion ringgit or about Rp 600 trillion. The harbor has an area of ​​100 square kilometers, twice the size of the Malaysian government center, Putrajaya.

    Interestingly, this port not only serves as a transhipment, also combined two existing ports, namely Westport and Northport. Even this area is equipped with industrial park, free trade zone, commercial area, to shelter.

    This megaproyek combines five islands. Including reclamation of two large islands in Melaka. Its port is designed to serve 30 million TEUs of containers per year.

    Although it may be said to beat Singapore, Singapore has long thought of remaining the biggest by continuing to increase its cargo port capacity. In the next few years capacity will reach 65 million TEUs.

    Osman also suggested, Batam container port should be upgraded its capacity and infrastructure and depth. Even Osman suggested being made equal to container ports in Singapore and Malaysia.

    Not only that, Osman also hopes Batam cargo port function is returned to its original destination. Namely, as transhipment. Same with port function in Singapore and Malaysia.

    Thus, the port of Batam can compete with the two countries. At least close to the same role, the transhipment of ships passing through the Strait of Malacca, before sailing back to ports in various parts of the world.

    Just to note, the volume of containers through the Strait of Malacca reaches 80-90 million TEUs per year. But Batam only gets 5 percent.

    “Frankly, the high container transport tariffs because the local government failed to make Batam as a port of transhipment, whereas its potential is enormous and it is the ideal of Batam from the beginning that never reached,” said Oesman.

    If Batuampar Port can not be maximized, Batam has to think of a new location that is wider, deeper, and certainly with a more modern port infrastructure. If this opportunity is not utilized, whatever the status of Batam, still can not as fast as neighboring countries. (Uma / nur / leo)

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    Sources: https://batampos.co.id
    Translated by Aryaputra Pande

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