Exclusive, INSA Chairperson Carmelita Hartoto, Reveals Two Factors Slowing Shipping Business Growth

There are two factors that make shipping business growth is still experiencing a slowdown. According to the Chairperson of the DPP INSA (Indonesian National Shipwoners' Association) Carmelita Hartoto, the two factors are the COVID-19 pandemic has not yet recovered and even the emergence of new variants; omicron. And both global geopolitical factors such as the war between Russia and Ukraine.

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However, there is always hope for a better future. This optimistic attitude was expressed by Carmelita Hartoto. This is because the government has taken the COVID-19 pandemic very seriously. Cooperative community participation in supporting and undergoing vaccination helps build herd immunity in the community. People are increasingly aware of the importance of vaccination, which helps increase immunity, both individually and in groups.

For the current global geopolitical issues, it is rather difficult to predict. This condition also affects the action steps that will be taken by shipping entrepreneurs. “The current geopolitical situation, such as the one between Russia and Ukraine, makes shipping players still cautious about new movements. For example, to buy a new ship, so they are still waiting and see with the current situation," he said.

Indeed, the President of the Republic of Indonesia, Jokowi, has made efforts to approach the two warring parties. Ukrainian President Volodymyr Zelensky and Russian President Vladimir Putin have been visited separately. However, the two countries still have not shown strong signs of ending the dispute. After Jokowi's visit, attacks on each other are still happening. According to Meme, this external condition, as he is usually called, is difficult to predict.

Fresh air and added optimism to Meme and business actors, especially shipping entrepreneurs, because the figures for Indonesia's second quarter economic growth that were recently released by the government were very encouraging. As is known, the Central Statistics Agency (BPS) announced that Indonesia's economic growth in the second quarter of 2022 was 5.44 percent year on year. While the inflation rate in July 2022 reached 4.94 percent. This is still below the economic growth rate. "We hope that this conducive situation will be maintained so that this condition will also affect the shipping sector," he told Iqbal Irsyad, Edy Suherli, Savic Rabos, and Rifai from VOI, who met him at the Kadin Tower, Jakarta recently. Here is the full excerpt.

The COVID-19 pandemic is starting to slow down, for INSA members, has the situation recovered?

The situation is now starting to improve. Cooperation between the community and the government has contributed to making the situation more conducive. But with the emergence of a new variant of COVID-19 (omicron) we must continue to be careful. Then with the current geopolitical situation between Russia and Ukraine, shipping players are still cautious about new movements. For example, to buy a new ship, so they are still waiting and see with the current situation.

When the COVID-19 pandemic was at its peak some time ago, how big was the decrease in INSA member activity?

When the pandemic is at its peak, the decline is very drastic. For example, on roro ships (roll on roll off – usually for inter-island crossings) the decline can reach 75 percent from before the COVID-19 pandemic hit. With this situation, roro ship entrepreneurs are greatly affected by the pandemic. But the situation on other types of ships is also the same, experiencing a decline, but not as bad as roro ships.

So the situation is now better than before?

It has improved quite a bit, but this situation is not only COVID-19, there are also other situations, such as the war between Russia and Ukraine, which makes ship owners still waiting. The demand for cargo transportation has indeed started to increase, but the increase in my opinion is still not significant. Especially now that many countries are going bankrupt because they are affected by the pandemic and other situations. They find it difficult to meet their food and clothing needs. Meanwhile, inflation also increased. The problem is very complex. Therefore, ship entrepreneurs are still waiting for the situation to improve. Only then will they expand.

So how big is the increase for INSA members?

For cargo and boarding, it has shown an improving graph compared to the situation when the COVID-19 pandemic was at its peak yesterday. However, the current situation is not as expected. Hopefully the situation will improve and the situation will be more conducive. We are still waiting for the government to determine the status of the situation which was previously an endemic pandemic. Although there are new variants that appear hopefully this does not make things worse.

When the pandemic is at its peak, within the INSA environment, what does it mean to lay off employees?

All parties affected by the COVID-19 pandemic, as well as friends who are members of INSA. When asked if there were layoffs in our neighborhood, I said yes. Because the difficult situation did have an impact on the balance sheet. To make the company's finances healthy, several steps must be taken, including termination of employment (PHK) with employees. I thought it was undesirable but we had to do it. For employees whose contracts are renegotiated. We hope that as the COVID-19 situation progresses, there will be changes for the better. Moreover, oil prices are also rising, hopefully the flow of trade will also increase. The demand for cargo and passengers will hopefully continue to increase so that employees who were previously laid off or have been laid off can be re-employed.

There is news that Pelindo will increase port services, how do you and your friends at INSA react to it?

We fully understand the condition of Pelindo, it has been a long time since there has been an increase. Even if the decision goes up, it must be accompanied by better service. The increase also cannot be arbitrary, too high for example. Because it will affect our logistics costs. For international tariffs, we are still discussing it, while for domestic tariffs, we will soon come to an agreement with Pelindo. I think the figure is still within reasonable limits of the increase.

For ships operating in Indonesia, how many are foreign owned and how many are owned by domestic entrepreneurs?

Foreign ships do not exist in Indonesia only for export. Ships that do not yet have a red and white flag only have 3 to 4 percent, a maximum of 5 percent. That is also for work ships that have high technology. Such as dredging vessels, drilling and so on. It is very expensive and does not last long in Indonesia. The rest of the national ships have controlled the domestic market.

The majority of our ships operate domestically, because to compete outside, our ships are not yet capable. The policies of their countries make it difficult for us to enter, for example the tax for entrepreneurs outside is not much, unlike in our country. This sometimes makes us confused. They say we are a maritime country and cannot turn our backs on the sea. The reality is that we are still subject to a lot of difficult taxes.

Are there aspirations for the government to make it easier for domestic ship entrepreneurs to compete with foreign ship entrepreneurs?

We've talked about this a lot, but haven't heard of it. Compared to similar entrepreneurs from Singapore and Malaysia, they get convenience from their country. We have not received it from our government. The regulations are not pro to local entrepreneurs.

There is a sea highway program from President Jokowi, how far do INSA friends see this opportunity?

We also participate in this marine highway program. The goal is that people in the regions also buy goods at prices that are not much different from those in Java as a production center. But in fact we provide convenience to the brokers, after the goods are distributed the price does not go down. This means that they get a cheap price for transportation but when selling it, it is still at a high price. Is that fair? Not fair at all in my opinion.

How is cargo competition with other modes of transportation such as air, land and rail?

Each mode of transportation has its own advantages and disadvantages. There are specifications for goods that must be transported quickly and in live conditions, for example. There are also goods that are sent for a long time, it's okay, this can be at a cheaper price, ship cargo is an option. This is what determines the price or shipping costs. Please consumers just choose which one suits their needs.

What is the attitude of INSA to the proposed amendment to Law No. 17 of 2008 on Shipping, does it need to be amended?

In my opinion, there is no need for revision or amendment of Law No. 17, because there are still many rules in the Law that have not been realized. It is better to just implement the provisions in the law than to make changes. For example, about the coast guard, it should have been formed. But until now we do not have a coast guard. He said there was a discourse that Bakamla (Navy Security Agency) would become a coast guard? I've been waiting, where's the reality? There isn't any yet. The president said to be a little patient, but we have waited too long. We hope that the coast guard is not only a coordinator, but can actually protect our oceans. So far, many have played a role at sea, including the Indonesian Navy, customs, police, and others. In the future, we hope that there will be one who has the baton. So the law is clear, how do we apply the rules in the law.

The never ending pandemic has made Carmelita Hartoto always be on alert. Therefore he did three non-negotiable things. That is always taking a multivitamin, exercising and maintaining the right food intake.

“Actually, my health care is not complicated. In a situation like now when the pandemic status has not been revoked by the government, we are vulnerable to contracting diseases such as COVID-19. As a precaution, I regularly take multivitamins. In addition, I also exercise and eat a balanced diet with the right dose,” he said.

The problem is, continued Meme – as he is usually called –, under current conditions, no one can guarantee that someone will not be exposed to COVID-19 even though they have been exposed and declared cured. "No one knows when we might get hit. There are also those who have maintained by practicing health protocols, maintaining distance and avoiding crowds, sometimes they still get it," he said.

Even though the situation has started to slow down, the President Director of Andhika Lines still doesn't want to take risks openly like before the pandemic came. “Indeed, the situation has been sloping, but I still maintain and limit myself to be active. This means that as much as possible choose to meet with as many people as possible, except for the absolutely essential. For meetings, if possible, virtual is better," he continued.

Even if there are face-to-face events or meetings that cannot be avoided, he prefers the time between lunch (lunch) and dinner (dinner). “I still avoid meeting with clients during lunch or dinner. So the time is between those two times. Yes, I choose tea time, just coffee or tea," he said.

Even sports activities in this sloping situation Meme can't be like it used to be, when the COVID-19 pandemic hit almost the entire earth. “Whether we like it or not, we have to exercise or move the body, so the choice in a situation like this is to exercise at home. I did a run on the treadmill. If you exercise outside, your time will be taken up more. And what I'm most worried about is that I'll meet my friends if I'm exercising outside the house,” said the woman, who spends 30 to 40 minutes each running session.

Sometimes something we like, is not always good for health. It also happens to women who really like to eat meat. “I really like to eat meat, which is processed with various types of cuisine, of course. But now I reduce my intake of red meat (beef, goat). What I eat is chicken and fish,” he said.

Reducing red meat intake makes Meme motivated to eat seafood. “It turns out that by reducing red meat and replacing it with seafood, cholesterol can be controlled. I balance my seafood intake with vegetables and fruit,” continued the woman who completed her studies in these two countries. First at Central Manchester College, UK; for BA Merchandising at Webster University. And secondly he continued his studies in the United States. In Uncle Sam's country, Meme completed her MBA in Finance.

After studying abroad, Meme did not immediately return to Indonesia. He had worked at the Lewis & Peat company, London, in 1994. During his holidays he returned to Indonesia. But what could his father have to face the Creator because of a heart attack.

Circumstances made him have to choose to continue his career in London or help the family company that his father had started in the shipping sector. The choice fell on continuing the family business. Since 1995 until now he is in control of the family business.

Even though he is busy with company affairs as well as professional organizations, at INSA as General Chair and Kadin he still makes time for his family. In the management of KADIN led by Arsjad Rasjid 2021-2026, he will hold the position of Coordinator of WKU IV for Human Quality Improvement, Research and Technology, and Innovation. For him family is everything.

“I usually make time for my children and family. But if in the midst of a busy office I can find time to meet with the children, why not? As for the place of origin, it is still affordable, I will meet them,” he said.

Meme is grateful that her child is already busy, never complains about time and attention. "Kids have not complained so far. And children today are incredibly busy. So now we ask them when they can be together. Not those waiting for me. But the opposite happened," he said.

With this condition, continued Meme, as a parent, you must also understand the situation. Do not always demand to be together when circumstances do not allow.

As a parent, he advised his children and the younger generation in general to never slack off in learning. “You have to be enthusiastic and never give up in learning. Learn from anyone. Don't feel like you've had enough so you don't need to learn from other people," he said.

The success of others, he continued, could be an inspiration to be like what he achieved. “We often see other people succeed, wow that's cool. But don't stop there, you must also be inspired to achieve what he has achieved. That's just true," he said.

In addition, after success, don't forget to share with other people who are not lucky. “We must realize that what we have achieved is not all for us, we must sincerely share it with those in need. Sharing can be with knowledge or with the assets we have," said Carmelita Hartoto, ending the conversation.

“The majority of our business ships operate domestically, because to compete outside, our ships are not yet capable. The policies of their countries make it difficult for us to enter, for example the tax for entrepreneurs outside is not much, unlike in our country. This sometimes makes us confused. They say we are a maritime country and cannot turn our backs on the sea. In fact, we are still subject to a lot of difficult taxes,"

Carmelita Hartoto