Pressing Economic Losses On The Dominance Of Singapore And Malaysia, Minister Of SOEs Prepares Belawan Port To Serve Export Direct Calls:

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir revealed the fact that currently 95 percent of cargo from Belawan port in North Sumatra, does not go directly to the destination country. But you have to go through the ports of Singapore and Malaysia.

In fact, said Erick, the practice called transshipment is not only the port of Belawan, most ports in Sumatra are only as feeders. This results in significant economic losses for Indonesia. The domination of Malaysia and Singapore continues, to this day.

Based on his records, from January to May 2022, around 51 percent of the containers unloading or loading in Belawan headed for or came from Malaysia. The rest, 44 percent to Singapore and Thailand (5 percent).

"We at the SOE Ministry are trying to make Belawan an export port that serves direct calls," said Erick, in Jakarta, quoted on Tuesday, July 12.

As an illustration, a direct call for container ships from Indonesia to Los Angeles, for example, only takes 23 days. In contrast, with transshipment, the same route takes 31 days, plus an additional 20 to 30 percent more expensive.

According to Erick, the development of Belawan can be started by bringing large container ships to Belawan. Erick assessed that this step could be done by increasing the loading and unloading capacity and equipment at the Belawan Port to be adequate for direct call transportation (direct shipping to the destination country).

In addition, said Erick, the volume of container cargo must also be increased. The trick is to make Belawan a gateway for small ports around it.

"Cargo loads that are scattered in small ports in Sumatra, can be brought to Belawan and then transported together to the destination country," he said.

For your information, PT Pelindo noted that of the 550,871 TEUs of containers loading and unloading in Belawan in 2021, 59 percent came from or headed to ports in Malaysia. The remaining 25 percent went to Singapore, and another 16 percent went to Thailand, Taiwan, and several other countries.

According to the Central Statistics Agency (BPS), exports from North Sumatra have so far spread to more than 30 countries. Based on tonnage, in 2021, most exports from this area will be directed to China (16 percent), India (6.7 percent), Japan (6.2 percent), and the United States (4 percent). The share of Malaysia and Singapore as the final destination countries for exports from North Sumatra is very small (less than 2 percent).

"Exports of goods that transit to other countries are very detrimental to the economy. This practice makes Indonesian exports less competitive because they have to bear expensive and time-consuming logistics costs. In addition, Indonesia also has to lose a lot of foreign exchange," he said.

In addition to harming export players, said Erick, this transshipment makes Indonesia lose more foreign exchange. Container ship services have so far been paid for in foreign currency (US dollars).

Bank Indonesia data noted that of the US$6.286 billion deficit in Indonesia's transportation services balance in 2021, US$6.232 billion (99 percent) was contributed by a deficit in sea freight costs.