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COMMENTARY: Still waiting for long-delayed reform of logistics services
The dwell time even at Tanjung Priok, Indonesia’s largest port that handles almost 70 percent of the country’s imports, remains one of the most inefficient in the ASEAN region.
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Giant arm: Workers oversee a crane moving a container to a docking cargo ship at Tanjung Perak Port in Surabaya, East Java, on Wednesday. Law enforcers arrested on Tuesday an executive with state-owned port operator Pelindo III for his alleged involvement in the practices of charging illegal levies at Tanjung Perak, the country's second largest port. (JP/Wahyoe Boediwardhana)
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raid by the police at the East Kalimantan port of Samarinda on March 17 uncovered massive rent-seeking practices and confiscated Rp 6.1 billion (US$450,000), believed to be illegal fees collected by stevedores from coal mining companies.
A preliminary investigation found that most coal companies had been extorted by stevedores organized under the Komura cooperative. Some firms even claimed having to pay up to $220,000 in monthly illegal fees, otherwise their coal exports were not loaded. Police also found that stevedores charged up to Rp 180,000 per 20foot container and Rp 350,000 per 40-foot container, more than 15 times the fees charged at other major seaports.
The massive illegal levies are only a small part of the labyrinth of seaport handling in Indonesia, which has made our logistics costs the highest in Southeast Asia.
But as the world’s largest archipelagic country with over 14,000 islands, ports as the key part of sea transportation play a vital role within the logistics system.
There are two main constraints in the system. One is the lack of physical infrastructure and the crumbling of a lot of existing infrastructure. This problem is being solved through the development of infrastructure, such as ports, airports and roads, which has been accelerated since 2015.
The second constraint, inefficiency caused by regulatory and bureaucratic barriers and corruption, is supposed to be the main target of the 15th reform package.
It is now almost four months since chief economics minister Darmin Nasution pronounced that “the 15th reform package, which will focus on the logistics system, will be issued within a few days.” Yet the launch date remains uncertain.
