Source: The Jakarta Post
Date: 27 July 2020
State-owned port operator PT Pelabuhan Indonesia (Pelindo) III has recorded a decline in ship traffic in this year's first half as the COVID-19 pandemic disrupts global trade and decimates the sea freight and logistics industry.
Pelindo III president director Saefudin Noer said Wednesday that the company's ports had seen an 8 percent year-on-year (yoy) decline in overall ship traffic and 10 percent annual slump in freight ship traffic in the first half of 2020.
The company manages 43 seaports in seven provinces, including the logistics hub of Tanjung Perak seaport in Surabaya, East Java, and the Semarang container terminal in Central Java, which is used for shipping routes to China, South Korea and Singapore, among other countries.
"We have seen a 15 percent decline in international container ship traffic to our seaports. However, the flow of goods to our Surabaya and Semarang seaports remained relatively stable as demand for goods is still growing in some regions," Saefudin said during a webinar held by media outlet Kompas.
Indonesia's sea freight industry suffered a double blow in May, as falling international trade and a global oil price slump put pressure on shipping demand, according to the Indonesian National Shipowners Association (INSA).
The association reported that container shipping revenue had fallen by 10 to 25 percent from normal levels. Revenue from bulk carriers, such as tankers, tugs and barges, had dropped by 25 to 50 percent.
Statistics Indonesia's (BPS) data show that Indonesia's exports plunged 28.95 percent yoy in May to US$10.53 billion, the lowest since July 2016, due to falling exports of coal, coffee and palm oil as well as oil and gas.
Meanwhile, imports fell even faster, dropping by 42.2 percent to $8.44 billion, the lowest since 2009, due to weak domestic demand for consumer goods, raw materials and capital goods.
Saefudin said Pelindo III projected an annual decline of shipped goods by around 9 percent to 15 percent by the end of 2020. The company recorded 75 million tons of goods being shipped last year.
"We made the projection based on the effects of lockdowns in Indonesia's export destinations and import source countries," he said.
To spur demand for transshipment services, Pelindo III is offering a 35 percent discount on the loading and unloading fees.
The company is also offering a 50 percent discount on the seaport service charge and 85 percent stevedoring charges discount for freighters that are part of the government's maritime highway program.
"We are trying to rebuild optimism by supporting our exporters, which effort will eventually stimulate economic growth" Saefudin said.
Saut Gurning, a maritime economy expert from November 10 Institute of Technology (ITS), said government support in the form of nontax state revenue (PNBP) exemptions, among other things, was needed to ease sea freighters' burden and keep the industry afloat.
"Because of the rising operational expenditure during the pandemic, combined with slumping revenue, many shipping companies are under intense pressure. What they need are fiscal incentives," he said.
Saut added that rules stipulated in Government Regulation No. 15/2016 regarding PNBP collection in the transportation sector needed to be reviewed to provide stimulus for the industry.
"PNBP has become a boogeyman in the business sector, and it needs to be reviewed. The government could help the industry by reducing [companies'] expenditure," he said.