Indonesia's shipping costs remain expensive: Jokowi

Indonesia's shipping costs remain expensive: Jokowi

An Indonesian sea toll ship. (ANTARA FOTO/ABRIAWAN ABHE)

Jakarta (ANTARA) - Indonesia's shipping costs remain expensive, though the government has carried out a sea toll program to reduce the difference in staple food prices between the western and eastern parts of the archipelago since 2015, President Joko Widodo (Jokowi) said on Thursday.

Shipping costs for the Jakarta-Padang, Jakarta-Medan, Jakarta-Banjarmasin, and Jakarta-Makassar routes, for instance, are higher than those on the Jakarta-Singapore, Jakarta-Hong Kong, Jakarta-Bangkok, and Jakarta-Shanghai routes, he said.

The logistic costs for shipping goods from Surabaya to Makassar are also higher than those from Surabaya to Singapore. This has made the prices of goods outside Java Island tend to be less competitive, he said at a limited cabinet meeting here.

In addressing this challenge, President Jokowi ordered all related ministries and government agencies to find a comprehensive solution to enable the sea toll program to be implemented.

President Jokowi highlighted the importance of strengthening a linkage of the sea toll services to industrial estates and economic hubs in the regions to boost economic activities in the areas.

In this regard, the regional administrations and government-owned companies need to become involved so they can receive benefits from the sea toll program, he said.

In his remarks at the meeting, he noted that the contribution of the sea toll road service to Indonesia's gross domestic product was still recorded at 0.32 percent, as of September 2019, or lower than in 2014, which was 0.34 percent.

The contribution of sea transportation to Indonesia's economy has declined over the past five years, compared to land and air transportation, which were recorded at 2.47 and 1.62 percent, respectively, he said.

In improving the contribution of sea transportation to the GDP, President Jokowi highlighted whether the problems of the sea toll road service are rooted at seaports, such as being caused by the length of dwelling time or monopolistic practices in transporting and distributing goods that have increased inefficiencies and increased logistic costs.

ANTARA noted that the sea toll program is crucial for Indonesia, which is one of the world's largest maritime countries, with some 5.8 million square kilometers of sea territory, while its land covers only 1.9 million square kilometers.

Moreover, Indonesia has some 17,480 islands, and its coastline is approximately 92,000 kilometers long, making it the second longest after Canada.

The administration of President Jokowi, which aims to develop the country into a global maritime axis, has developed the sea toll road concept that will improve ports and shipping, in order to facilitate the transport of goods across the archipelago.

The sea toll road service, operational since 2015, is expected to help reduce the significant differences in prices between eastern and western Indonesian regions, which is caused by expensive shipping freight costs, as almost every ship returning from remote areas carries no freight.

(INE)

Related news: Sea toll road service contributes 0.3 percent to GDP: Jokowi

Related news: Indonesia will push digital transformation of sea toll system

Comments