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tate-owned ship operator PT Pelayaran Nasional Indonesia (Pelni) plans to launch shipment services along five new domestic routes by next year in an effort to support the government-initiated maritime highway program.

Pelni commercial director Harry Boediarto said the expansion would begin this month.

“We will add two new routes by the end of this month,” he said on Monday.

One of the new routes, Harry said, would connect Tanjung Priok in Jakarta to Biak, Papua, with stops in Makassar (South Sulawesi), Manokwari and Wasior (West Papua), Nabire and Serui (Papua), a total of 4,644 nautical miles for the return trip.

The other route will connect Makassar with Ternate and five other towns in North Maluku, a total of 2,608 nautical miles return.

The firm is also expecting to offer three additional routes next year, meaning the total number of Pelni routes will reach nine by 2016.

Harry considered the expansion plan feasible as, between June and July, the company would receive the delivery of six previously purchased used cargo ships. Each cargo of these cargo ships has a capacity of between 350 and 500 total equivalent units (TEUs).

“All of them are going to be allocated for freightliner service. The exact routes are still undecided but they will serve remote areas as well,” he said.

Financing to purchase the ships came from a state fund injection (PMN) of Rp 500 billion (US$38.1 million) that had been allocated in the 2015 state budget.

The latest route adds to the four routes already operated by the firm, including the latest connecting Tanjung Perak in East Java to Merauke in Papua, launched on March 28. Pelni currently operate a rented ship with a capacity of 350 TEUs along the Tanjung Perak-Merauke route.

Pelni was assigned by the government by way of presidential regulation No. 106/2015 to operate scheduled cargo ships to solve logistics problems in remote areas.

The Transportation Ministry committed to disbursing Rp 257.9 billion in public service obligation (PSO) funds this year in order to help the company operate six routes.

Indonesian logistics costs account for 24.6 percent of the country’s gross domestic product (GDP) and are among the highest in the ASEAN region, according to data from the World Bank. The high costs stem from a lack of infrastructure, in the form of seaports and roads, as well as schedule uncertainty.

The cargo ships are to carry staple goods such as rice, sugar, flour, cooking oil, eggs and steel. Such services are expected to facilitate goods distribution and reduce the price disparity between various areas in Indonesia, especially between the eastern part and the western part of Indonesia.

Citing Pelni data, Harry said the maritime highway program had resulted in a 30 percent price reduction in areas like Papua.

Based on the latest official data, Trade Minister Thomas Lembong also cited that in places like Fakfak and Kaimana, both in Papua, the steel price had dropped 6 percent, soybean prices were down by 14 percent and cooking oil by 21 percent as a result of the maritime highway initiative.