Operational Issues in Reducing Dwelling Time in Port

Although the dwelling time at Tanjung Priok dropped to 4.7 days in early 2016, there are actually several other operational issues that still appear in Indonesian ports

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By: Ricky Virona, M.M. - Core Trainer PPM Manajemen

*This paper was also published in the magazine SOE Track No. 106 Year VIII, in August 2016.

One cause of high logistics costs in Indonesia are high dwelling time at the Port in Indonesia (including the Port of Tanjung Priok), which is the average for 7 days in 2015. Compare that with Singapore and Malaysia are at 2 and 3 days. Causes of high dwelling time of which this is poor infrastructure and storage of goods that are too long in the Port of Tanjung Priok.

One of the steps taken by the Government of Indonesia in late 2015 was to issue a policy issue fines of five million rupiah per day to the importer who accumulate goods in the port for more than three days. This was stated by Deputy Natural Resources and Services, Ministry for Maritime, Supreme Kuswandono.

Although the dwelling time at Tanjung Priok dropped to 4.7 days in early 2016, there are actually several other operational issues that still appear in Indonesian ports, the ship traffic / congestion (Groenveld, 2001, Delft University of Technology) caused by one or a combination of:

A storage area on the quay (wharf) is full.

  1. Queue vessel before berthing.
  2. Queues modes of transport which transport goods from the port to the location of industrial or consumer.
  3. The cost of inefficient, for example storage costs of goods at the port are cheap and unfinished tax payment when the ship will be docked.

If one of the causes arise then it can lead to other causes, so the effects are accumulate. For example, the unavailability of transportation mode transporting goods out of the port may result storage area is full. Thus, increased vessel queues. Likewise, the payment of fees which are still not finalized may cause the ship docked longer, and consequently lead to inefficiencies in cargo handling.

Thus the necessary planning of ports includes:

  1. Careful planning will support the long-term plan of the port, including a strategy to compete in the regional and international levels. Planning problems often arise because of the division management systems intersect and decision making was slow between the regulator (Ministry of Transportation), the port operator (IPC), a provider of funds (Ministry of Finance), setting land concessions, the interests of central and local governments, as well as environmental issues life as a result of the development of the port.

  2. Provision of land and facilities are sufficient to accommodate the goods for the needs of the present and forecast future needs. For example, by crane automation and warehouse locations grouping by type of commodities with the safety of the commodity itself and safety of employees.

  3. Increase the capacity of the mode of transportation from the port to the consumer, such as rail transport modes to the location of industrial and warehousing.

  4. Embrace the private sector to participate in managing port facilities, such as water supply, power plant, warehouse management. This is supported by the Economic Policy Package X where foreign ownership is permitted for cold storage of up to 100%, of the original range from 33% to 67%.

  5. Responsibilities include the harbor waters until a few kilometers from the port itself, so that the scheduled arrival of the ship can be managed according to land availability storage of goods. Efficiency is also applied in the care of an export license import goods, where the letters should have been declared available before the ship arrives in port. For transshipment goods in the Port of Tanjung Priok, the permit should have been otherwise available before the goods are received by other ports in Indonesia. This will reduce the working time of port administration.

  6. Improving the efficiency of tax payments, such as online payment while the ship is still in transit. Including notification type of goods shipped.

  7. Improving workforce skills. For basic capabilities, the training can be done internally or invite experts to share their knowledge and experience in Indonesia.