Maersk: Indonesia port access a problem

Jakob Friis Sorensen, president director of Maersk Line Indonesia, talks to FinanceAsia about the vital expansion of the country's ports.
Joko "Jokowi" Widodo tours Tanjung Priok port in 2014
Joko "Jokowi" Widodo tours Tanjung Priok port in 2014

Joko “Jokowi” Widodo, Indonesia’s president, has made upgrading the country’s ports infrastructure one of his priorities.

As an archipelago of more than 13,000 islands, the maritime industry is key to the fortunes of the country and to the continued development of its trade relationships.

Criticisms of the existing ports infrastructure include the limited size of second-tier ports, inconsistencies of rules, turnaround times and the lack of a nationwide framework.

However, the government is creating a “Sea Toll Road”, which it hopes will modernise the country’s ports system, as part of a Rp5,519.4 trillion ($429 billion) infrastructure upgrade over five years.

This programme will include expanding second-tier ports, as well as those in Jakarta and Surabaya, through which the country’s international sea-borne cargo passes.

Maersk Line, the world’s largest container shipping company, plays a key role in facilitating global trade and uses 15 ports across Indonesia.

FinanceAsia spoke to Jakob Friis Sorensen, president director of Maersk Line Indonesia, about the state of the country’s ports and what needs to be done to upgrade them.

How would you describe the port facilities in Indonesia compared to other Southeast Asian countries?

Jakob Friis Sorensen: In general, we have seen improvement over the past 2 years in terms of port facilities, productivity and infrastructure.

However, there’s still uneven focus between development of ports in west and east Indonesia, with more emphasis placed on the west.

This will be the task for the new government to look into and we are constantly engaging with the Indonesian government and other stakeholders in constructive dialogue to find solutions.

Is this a problem for the country in terms of trade and the movement of commodities/goods?

Infrastructure access in and out of ports is one of the main problems. For example, channel and road access in some ports are still inadequate and create difficulties for exporters/importers as well as shipping lines, and this impacts efficiency and increases the overall logistics cost.

There is a need to have better synergy on executing the master plan of where the ports should be located and to provide easy access for industrial areas.

The Tanjung Priok port in Jakarta, which is Indonesia’s main port, also remains congested during peak periods, for example during year-end and before the Hari Raya holiday [which marks the ending of the fasting month].

Plans are under way to build a new integrated port and industrial estate in Surabaya as well as a new container port in Jakarta to help ease the congestion at Tanjung Priok.

The new Kalibaru Port [an upgrade to the Tanjung Port complex] is looking to open the first of its three new terminals mid next year, which will offer a deeper draft.

The new port will enable shipping lines to [make] direct calls at Jakarta, so customers in Indonesia can benefit from faster transit times and reduced logistics costs.

This, however, needs to be supported by better inter-coastal connectivity so Jakarta can act as a main trans-shipment port and offer more competitive costs to shipping lines

How does Maersk Line manage the situation? is it a problem for the company in any way? (for example, can only certain vessels use certain ports as a result?)

We are adapting with the situation and limitations [at] different ports and carefully considering the type and size of vessels to deploy.

We are closely monitoring the port developments in Jakarta and Surabaya, to assess the possibility for us to upsize our ships. At the same time, we are working together with the port operators to improve the productivity at their ports.

What should be done to upgrade the infrastructure?

The new government has been focusing on developing new ports in rural areas, especially in the eastern part of Indonesia, and they have been actively promoting the idea to foreign investors in a bid to get this started.

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