Priok to Adjust LoLo and Storage Tariff for International Container

Tanjung Priok Port Container loading and unloading activities at Tanjung Priok Port, North Jakarta (Photo by beritasatu)

Source: Indonesia Shipping Gazette

Date: 8 April 2021

Tanjung Priok will adjust the LoLo (Lift on – Lift off) and storage tariff for international container (full load) per April 15. The LoLo and storage tariffs, on one hand, will be raised, while on the other hand, the existing recovery tariff will be cut, the State Port Operator PT Pelabuhan Indonesia II/IPC has just announced.

This new adjusted tariff, according to IPC, has got agreement from related stakeholders and approval from regulator (Ministry of Transportation and Coordinating Ministry of Maritime Affairs and Investment).

Talking to the press yesterday (Wednesday, April 7), Dini Endiyani, IPC SFVP for Corporate Communication, explained that Tanjung Priok will raise LoLo and storage tariff for international full container only, not for domestic and empty containers.

The LoLo tariff for 20ft container box will rise to Rp 285,500/TEU, from currently Rp 187,500/TEU, while the LoLo tariff for 40ft container box will rise to Rp 428,250/FEU, from currently Rp 281,300/FEU.

Meanwhile, the storage tariff for 20ft box will rise from Rp 27,200 to 42,500/TEU/day, and for 40ft box will rise from Rp 54,400 to 85,000/FEU/day.

"This new tariff is taken since there is no adjustment since 2008," said Dini.

Amending this, Arif Rusman, IPC SVP for Marketing, explained that this adjustment is needed in view of the currency inflation and the increasing operating cost for the activities of LoLo and storage. "This existing tariff was set up in 2008, 13-years ago. So, just imagine the currency inflation that has increased significantly while the operating cost has also increased, of course," Arif explained the reasons behind this tariff increase decision.

"Furthermore, in account of recovery cost cut-off, there is only a slight increase in total," Arif explained further.

In line with the LoLo and storage tariff increase, the recovery cost of Rp 75,000/box will be cut off. "So in total, the real number of increase is only more than Rp 23,000/TEU and Rp 71,000/FEU," Arif explained.

Still Cheaper than Neighbour Ports and Container Depos

According to Indonesia Shipping Gazette database, though getting increase, the new LoLo tariff at this Indonesia's main gateway for oceangoing trade will still be cheaper than other neighbour ports, both domestic ports and ports in ASEAN countries.

The LoLo tariff in Tanjung Perak Surabaya for example is Rp 280,000/TEU, while the LoLo tariff in Malaysian ports is more than Rp400,000/TEU.

This tariff is also cheaper than the LoLo tariff at some container depos around the port of Tanjung Priok. Data says that LoLo tariff at the depos ranges from Rp 600,000 to 900,000/boxes.

No Resistance

The new LoLo and storage tariff effectiveness predictably will run smooth without any resistance from transporters and cargo owners as representative associations of those business players have expressed their similar views on the reasons behind this decision and they have officially signed agreement in 2019.

Three associations that have agreed with this decision include Indonesia Logistics and Forwarders' Association (ALFI/ILFA), Indonesia Importers' Association (GINSI), and Indonesia Exporters' Association (GPEI).

To Indonesia Shipping Gazette, Chairman of ALFI/ILFA Jakarta Adil Karim affirmed that agreement on this tariff adjustment was actually signed in 2019, after a long discussion and negotiation for one year (since 2018). "This has been agreed since 2019, but will be effective this year," Adil said.

ALFI/ILFA, according to Adil, understands with the IPC proposal for this tariff increase. Adil confirm that the increase is by only around Rp 23,000/TEU plus put the component of cost recovery into LoLo tariff.

Echoing the view, GINSI Chairman Subandi, explained that GINSI did not mind with this decision, but hopes the terminals to increase their level of service. He even appreciates with this decision as the progressive tariff for storage will be limited at 600% at maximum, from the existing 900%.

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