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Majalah IST Juni 2008

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					tRade : Against re-export of Chinese textile - p30                                 Round uP : Taiwan port official jailed - p41

                                                                                       PRofile
                                                                                       Maersk’s 50 Years
                                                                                       in Indonesia
                                                                                       p27



issue 01, June 2008                                       Price: Rp25.000 / uS$5




highlightS                                    gatewayS                                SolutionS
Impediment in                                 Gresik as                               Beefing up
adding ship capacity                          coal port                               export quality...
p6                                            p16                                     p34
                                                                                  sidelines


                   office
           PT Tetha Widya Utama
                                                 The dawn of
                                                 new maritime era
 Komp. Perkantoran Enggano, Blok B-9 Lt. 3
     Jl. Enggano No.15, Tanjung Priok
          Jakarta Utara, Indonesia

                  editorial



                                                 O
  Tel: (021)-43933667, Fax: (021)-4373416
      editorial@indo-shippingtimes.com                      n April 8, Indonesia created a    to walk together with stakeholders in
                                                            momentum that will be well-       building a great nation, through writing.
               Chief editor                                 booked in its maritime history.        This new magazine is born to
               Harson Mando
                                                 It was the day when the parliament           capture all shipping stories and images
             Managing editor                     enacted the new Shipping Bill, an            and envelop it from business point of
                Simon DJ                         amendment to the 16 year old 1992 law.       view.
                                                     No matter ‘how big the flame’ that            Indonesia Shipping Times is a
          Business development
               Karnali Faisal                    the bill may have sparkled, let’s put it     privately-run media with focus on the
                                                 straight: Indonesia’s shipping industry      business side of all events.
                   writers                       needs breakthrough, a chain-reaction              We all agree that our shipping
Ibnu Syafa’at, Kahar Basuki, Dany Ari Purnomo,   that will tear down all stumbling blocks.    is improved and moving towards
                                                     Indonesia’s maritime industry is         worldwide recognition. Here we are
               Photographer                      like a sleeping giant that has to be         walking together and keen on knowing
              Anggi Wisanggeni                   awakened to shake up the world.              and writing about the “story makers” of
                                                     Two thumbs up then for our               this industry.
                   lay out
                                                 Parliamentarians, particularly                    As you turn up the pages, you will
              B. Jagat Setiawan
                                                 Commission V, Government, and all            discover that shipping is not only about
                 Secretary                       stakeholders for making it through.          shipping lines, ports, trucks, regulators,
                 Lizda Yanti                         It is not only changing the old          etc.
                                                 paradigm of managing the country’s                It is the story of supply chain
                 finance
                Happy Maya                       shipping industry, but also educating        starting from packaging to end user’s
                                                 stakeholders and entire citizens to          door. It poses great complexity that
                 Circulation                     making sea transportation a culture, a       needs onerous act and commitment,
               Agus Duprihatno                   way of building a great nation.              leaving all differences behind.
    circulation@ indo-shippingtimes.com
                                                     In many parts of the world, say               As globalization has rived all
               Subscription                      advanced states, sea transportation          stonewalls and brought all nations into
   subscription@indo-shippingtimes.com           plays irreplaceable role in building a       one bowl, Indonesia’s shipping is no
                                                 powerful nation.                             longer a separate world.
                advertising
    advertising@indo-shippingtimes.com               They no longer talk of sea                    The magazine has a mission to
                                                 transportation alone, but a multimodal       tell all stories of Indonesia’s shipping
                   Sales                         transportation system, whether it is         industry to the world, particularly the
       sales@indo-shippingtimes.com              trucking, air transport, railway, -even      Asia Pacific. With your cordial support
                                                 since goods are packed to the end user.      together we can make a better change.
                                                     What about us here? Well, to say it           Are you ready to tell the world
                                                 frankly, Indonesia’s shipping industry       that you are important and that your
                                                 is very much fragmented. The advent          companies must be known by the
                                                 of new bill aims to defrag all these         world? You’d better be.
                                                 separate and dislocated entities.
                                                     The time is here, the time is now to
                                                 act for better sea transportation.              Chief Editor

                                                                                                                             o
                                                                                              Harson Mand
                                                     As journalists, we at the Indonesia
                                                 Shipping Times see this moment an
                                                 opportunity and challenge, and try

                                                            Issue 01, June 2008                                                       
contents
cover story
                                           Issue 01, June 2008



Shipping Bill
Despite mounting protest of stevedores, agencies, and over 10,000 Pelindo workers, the parliament finally
endorsed the new shipping bill on April 8. Many have believed it will transform the country’s shipping
industry. But what does it do and what is it going to change? ..................................................................... 20
Cover photo by Anggi Wisanggeni


highlights                                                                      trade
                                                                                industry woes re-export
                                                                                of Chinese textile
                                                                                The government blames officials in Karawang,
                                                                                Bali, Tangerang and Batam for allowing the
                                                                                re-export of Chinese textile products to the USA
                                                                                using certificate of origin issued by Indonesian
                                                                                government. ..................................................... 30

                                                                                furniture sees brighter end,
no money, no honey                                                              despite strong rivalry
Shipping companies blame banks for not giving                                   Indonesia’s furniture industry is on track to
loans. On the other hand, bank sees shipping                                    achieving $3 billion earning from exports this year,
industry is high risk. Or is it just simply because they                        despite stiffer competition with similar products
don’t sit down very often and talk it over? ............. 6                     from other countries. ........................................... 31

global Putra, Cosco tap coal growth
PT. Global Putra International (GPI) has agreed                                 logistics
with China Ocean Shipping Company (Cosco) for
transportation of coal transportation, especially to
China...................................................................... 8

Berlian laju teams up
with teekay on tangguh lng
Jakarta-headquartered PT Berlian Laju Tanker has
teamed up with Canada’s Teekay LNG Tanker, a
subsidiary of Teekay Corporation, to carry LNG from
Tangguh, Papua. .................................................. 10

solutions
Beefing up export                                                               expensive road transportation
quality with fumigation                                                         crumples economy
Along the line of increasing volume of export from                              The Asia Foundation concludes its survey saying
Indonesia to various destinations worldwide there                               that unreliable and expensive road transportation
is also question of quality. The borderless trade now                           is one of biggest constraints to Indonesia’s
speaks common language, quality of goods ........ 34                            economy. ......................................................... 25

                                                                                                 Issue 01, June 2008
gateways                                                                  finance
                                                                          Shipping bourse plunges,
                                                                          but still prospective
                                                                          The US credit crunch has severely hit some stocks
                                                                          at the Indonesia Stocks Exchange (IDX), including
                                                                          of shipping companies. The phenomenon probably
                                                                          will last up to, at least, June this year. .................. 32


                                                                          round up
Berlian Jasa spreads logistics wing
Terminal operator Berlian Jasa Terminal Indonesia
(BJTI) continues to spread its business wings in
Surabaya’s Tanjung Perak Port, East Java. ............. 11

Bigger challenge ahead of the river port
Though ravels in positive growth in both bulk and
container, Pontianak Port also registers plunged
export-import volume due to drop of international
ship visits. Will the port be able to maintain its                        the first China-made 10,000-teu ship
oceangoing services? ........................................... 12       The Cosco Oceania, the largest container vessel ever
                                                                          made in China, was recently delivered to Coscon in
                                                                          Nantong, Jiangsu province. .................................. 36
Putting Belawan into world trade circle
It’s been a shipping community discourse that Bela-
wan Port will be one of Indonesia’s international                         new technology cuts yard’s
hubs due to its strategic location within the range                       shipbuilding time
of the world’s busiest trade lane, Malacca Strait. The                    Hyundai Heavy Technology is using a new technology
potentials of North Sumatra and surrounding areas                         that minimizes preparatory dock work in shipyards...38
also play crucial role. ............................................ 14
                                                                          Saudi arabia tackles maritime boom
gresik Port mulls to be coal gate                                         Saudi Arabia is developing its shipping infrastructure to
As fuel price hike pounds, industries and manufac-                        capitalize on the international maritime boom..........42
turers turn to coal to save cost. In East Java, Pelindo
III maps the best place as coal port. ..................... 16            Box shortage hampers uS export
                                                                          boom, freight to China up
Priok’s domestic tonnage up,                                              US exporters no longer see the benefit of a low
but international cargo down                                              dollar because of a lack of containers to ship US
The tonnage served through Tanjung Priok                                  goods overseas.. ................................................... 44
conventional terminals in first quarter of this year
has grown by 6.8 per cent ................................. 19



profile
golden Jubilee
Fifty years ago, Maersk started operation in Indonesia with only
seven staff. Today, it has transformed into a solid company with
five business units and about 700 permanent employees in
seven offices nationwide. ....................................................... 27

                   Issue 01, June 2008                                                                                                        
    highlights



no money, no honey
Impediment in adding ship capacity
Shipping companies blame
banks for not giving loans.
On the other hand, bank sees
shipping industry is high risk.
Or is it just simply because they
don’t sit down very often and
talk it over? Harson Mando
peels it.



T
        he parliament has just passed
        a new Shipping Bill that will
        certainly boost investment
in shipping sector; an exorbitant
achievement of course.
     Or at least at the moment it ‘breezes
the winter chill’ to the country’s
                                                        Photo: indonesia Shipping times




shipping stakeholders that have long
been longing for fresh air.
     It includes tearing down the gap
that has put most shipping lines and
banks apart, a serious impediment so
far.
     It is money talk. No money, no
honey can simply mean that shipping                                                       shipping industry will be financed there               and local banks is a perfect joint that is
lines or shipbuilding firms cannot grow                                                   is no better way now than establish                    sought after, if cabotage –enforced in a
without the banking support.                                                              good communication with banks.                         2005 presidential decree- is going to be
     While waiting for details on how                                                         Cooperation among shipowners                       implemented impartially.




    The Cabotage effect
         DOT recorded as of December last year                                            shipment.                                                   In 2004, Indonesian flag carriers carried
    that 1,422 ships were added to domestic fleet.                                             Last year, local carriers handled 148.7 million   16.3 million tons or 3.5% of total 465 million
    Despite mostly from foreign to Indonesian                                             tons –accounting 65.3% of total 227.9 million tons     tons, while foreign carriers took care of the rest.
    registry, it made a total of 7,463 vessels from                                       of domestic cargo, while 79.2 tons or 34.7% by              In 2007 the portion for domestic carriers
    6,041 in 2005.                                                                        foreign carriers.                                      jumped to 31.4 or 5.9% of 532 million tons
         “Increasing by 23.5 percent,” Batubara said,                                          In 2004, domestic carriers transported 101.3      of international cargo, and foreign carriers
    thanks to the enforcement of cabotage in a                                            million tons or 54% of total domestic cargo, while     transported 500.5 million tons or 94% of the total.
    presidential decree in 2005.                                                          foreign carriers handled 86.3 million tons or 46%           Cabotage will further impact on the
         He predicted that by the end of 2010, local                                      of the total.                                          need for more ships, particularly to cope the
    carriers will transport a total 288.2 million                                              An increase also occurs in overseas shipments     increased shipment of oil, gas, coal and general
    tons of domestic cargo, including coal and oil                                        by domestic carriers.                                  cargo, and container. (see chart)


                                                                                                       Issue 01, June 2008
                                                                                                                                               highlights
    That is an itchy-hearty relationship,            affirmed local shipowners’ craving for
but to certain extent it looks like a                bank support to expand fleet.
matrimonial relationship.                                 To fully implement cabotage regime
    Shipowners often criticize local                 by 2011, DOT estimates US$4.6 billion
banks for lacking support for this                   (Rp43 trillion) on an average to buy 654
industry; while banks, as they have                  ships, he said.
abiding principles and probably over-                     These include general cargo,
scrutinized, are overriding these needs.             container, tanker and coal carriers.
                                                          However, local owners could only




                                                                                                   Photo: indonesia Shipping times
The missing link                                     afford Rp9 trillion, while Rp34 trillion
    Without pinpointing who is at fault,             weighs on banking prudence.
INSA chairman Oentoro Surya said has                      Bank Indonesia’s deputy governor
umpteenth times reminded members                     Muliaman Hadad once admitted that
to be ‘one heart and one soul’ in order to           shipping sector has shown remarkable
draw banks closer into this sector.                  improvement.
    “I often ask fellow owners to be                      Its non-performing loan rate has                                                          Mr. effendi Batubara
proactive,” he said, referring to internal           also declined from 11% in 2006 to 3.8%
pleas as an association as well as                   last year.                                                                          Though still inadequate, local banks
individual approach, which frequently                     These figures, he said, will push                                          have increased 88% in loans to shipping
not a success.                                       banks to actively channel loans to                                              industry from Rp5.2 trillion in 2006 to
    DG of sea transport Effendi Batubara             shipping industry.                                                              Rp9.8 trillion last year
                                                                                                                                         Hadad admitted that banks’
  eStiMated need foR veSSelS                                                                                                         insufficient knowledge of this sector
                                                                                                                                     has locked them up in the idea that
  Coal ShiPMent : 60,000dwt panamaxes (10 vessels); 40,000dwt
                                                                                                                                     shipping is high-risk, a slow yielding
                  handymaxes (13 vessels); Tug/barge of 8,000dwt (367 units).
                                                                                                                                     industry.
  tanKeR        : 30,000dwt (8 tankers); 20,000dwt (12); 11,500dwt (22); 6,000dwt (40);
                                                                                                                                         But he promised to train bankers
                  and 2,500dwt (143).
                                                                                                                                     and credits analysts on measured
  geneRal CaRgo : 6,000dwt (5); 1,500dwt (10 units); 300dwt (10)
                                                                                                                                     steps in dealing with shipping lines or
  ContaineR     : 15,000dwt (4); 6,000dwt (5); 3,000dwt (5).
                                                                                                                                     shipbuilders.


                                            Cabotage on 13 commodities 2005-2010
                                      Shipment (%)        Shipment (%)      Shipment (%)   Shipment (%)                                       Shipment (%)           Shipment (%)
  #    Commodity                          2003                2005              2006           2007                                               2009                   2010
                                    National Foreign National Foreign National Foreign National Foreign National Foreign National Foreign
                                     vessel   vessel vessel vessel     vessel vessel    vessel vessel vessel vessel       vessel vessel

  1    Oil/ Petroleum                  39       61         40       60       40       60    60                                        40       90         10         100        0
  2    General Cargo                   64       36        100        0      100        0   100                                         0      100         0          100        0
  3    Coal                            40       60         60       40       60       40    75                                        25       95         5          100        0
  4    Wood                           100        0        100        0      100        0   100                                         0      100         0          100        0
  5    Fertilizer                     100        0        100        0      100        0   100                                         0      100         0          100        0
  6    Cement                         48        52        100        0      100        0   100                                         0      100         0          100        0
  7    CPO                            62        38         80       20       80       20   100                                         0      100         0          100        0
  8    Rice                           48        52        100        0      100        0   100                                         0      100         0          100        0
  9    Mine and Quarry                23        77        40        60      40        60   100                                         0      100         0          100        0
  10   Other grains                   66        34        70        30      70        30   100                                         0      100         0          100        0
  11   Other liquid                   34        66        40        60      40        60    65                                        35      100         0          100        0
  12   Agri grain                     62        38        70        30      70        30    80                                        20      100         0          100        0
  13   Fresh product                  93        7         95        5       95        5    100                                        0       100         0          100        0
       Commodity                            2                   5                 5                      9                                          11                     13

Predicted annual growth per commodity is 10%                Source: Department of Transportation
                                                                Issue 01, June 2008                                                                                                 
                highlights


            Malacca strait improves,
            nigerian coast under siege
                                                                                                                                Security of Malacca Strait is very
                                                                                                                           import due to its status as the busiest
                                                                                                                           commercial sea lane linking Asia with
                                                                                                                           the Middle East and Europe.
                                                                                                                                More than 60,000 ships a year traverse
                                                                                                                           the waterway, transporting about 80 per
                                                                                                                           cent of the energy supplies to Japan and
                                                                                                                           China and other Asian nations.
                                                                                                                                IMB said global piracy on vital
                                                                                                                           merchant shipping lanes has jumped to
                                                                                                                           41% in first quarter year on year, with
                                                                                                                           Nigeria on top of pirate attack list.
                                                                                                                                The bureau reported that violent
                                                                                                                           attacks against ship crew were mainly off
                                                                                                                           the Lagos coast using guns and knives.
Photo: nn




                                                                                                                                From 36 vessels boarded by pirates,
                                                                                                                           one was hijacked with seven crew
                                               a patrol boat is securing indonesian waters                                 members taken hostage, six kidnapped,
                                                                                                                           three killed and one missing presumed
             By KahaR BaSuKi                                          dangerous trading lane and home for                  dead.
                                                                      piracy with 10 of the 49 global pirate                    Recently, the crew of CMA-CGM


            T
                  he International Maritime Bureau                    attacks in the first quarter of 2008.                vessel was abducted off Gulf of Aden
                  (IMB) has praised the littoral                          The Malacca Strait reported no                   which called for French government to
                  states of Indonesia, Malaysia                       incidents in the first quarter this year.            tighten cooperation with IMO. (See the
            and Singapore for their cooperation in                        The effort of Indonesian authority in            IMO story in Round Up section)
            patrolling along the Malacca Strait.                      curbing the number of piracy in the strait                Vessels off Aden were reported to
                The ‘Eye in The Sky’ program                          and other water territories is paid off.             have been attacked and then taken to
            launched in 2005 by the three states has                      There were only four attacks last                pirate coves in eastern Somalia.
            played significant role in diminishing                    year compared to 19 incidents in 2006.                    Indian waters were also under watch
            piracy in the strait in the following years.                  The IMB commended the                            list. But the attacks in India were low-
                On contrary, Nigerian shipping                        Indonesian police’s effective anti-piracy            level and comprised of goods theft from
            routes have become the most                               measures.                                            the vessels.




                Global Putra, Cosco tap coal growth
                 By iBnu Syafa’at                           CEO of Global Putra International    100,000 tons.                              He has also asked the
                                                       Group, Sumadi Kusuma, disclosed                It has planned to register the   government to give fiscal incentive in
                     Pt. Global Putra International    that this joint venture absorbed an       ships under Indonesian flag to        form of tax cut in shipping sector, as
                (GPI) has agreed with China            investment up to $1 billion, Bisnis       anticipate application of cabotage    it has been done in Singapore.
                Ocean Shipping Company                 Indonesia reported.                       by 2010.                                   Cooperation between GPI and
                (Cosco) for transportation of coal          It will be among other used to            Kusuma has informed Transport    Cosco actually was initiated in 1988,
                transportation, especially to          buy 8 to 10 coal ships, each with         Minister Jusman Syafii Djamal about   with the appointment of GPI formal
                China.                                 capacity to carry 50,000 tons to          the joint venture.                    agent of COSCO in Indonesia.


                                                                                     Issue 01, June 2008
                                                                                                                                highlights


simplifying security red
tape in coastal protection
 By KaRnali faiSal                                    run their tasks; and                                                   through seven
                                                      fourth, institutions                                                   activities: early warning


E
       stablishment of coast guard is                 directly involved in                                                   information system,
       absolutely urgent to ensure more               securing the sea certainly                                             law enforcement,
       coordinated safety and security                require adequate fleets,                                               customs, navigational
implementation in Indonesian waters.                  equipment, and a lot of                                                aids, environmental
    The existing body tasked to handle                money.                                                                 development, search




                                                                                          Photo: Karnali faisal
security at sea is said ‘not been fully                   “Now, there are at                                                 and rescue, and national
authorized’ to take over any security                 least two important                                                    defense.
system and operation at sea.                          matters that should                                                         “The complexity of
    Currently the coordinating board                  be considered in a                                                     those activities has called
of sea security or popularly called                   bid to support law                        Mr. Son diamar               for involvement of many
Bakorkamla, -founded through                          enforcement, security, and sovereignty              institutions,” said Son Diamar.
Presidential Regulation (Perpres)                     at sea,” he said.                                        The activities relating to law
81/2005, is responsible to plan and                       Those include integrating the civil             enforcement, security, shipping aids at
manage the execution of security at sea.              institutions involved with security at sea sea are carried out by various institutions
    An expert at the National                         into single institution, single command,            under different laws and regulations.
Development Planning Board                            but multi-missions. A new law is also                    “Consequently, there is different
(Bappenas) Son Diamar pinpoints                       required to be common denominator                   structure, system, and job procedure,”
several problems that have prevented                  for all stakeholders.                               he said.
the institution carry out its task.                       Comprehensive regulation is                          In bid to simplify red-tape and
    He underlined four basic pro-                     needed considering vast range of sea                create better operational system a new
blems that have pulled down the                       security dimension, such as measures of law is badly required.
implementation of security at Indonesian              safeguarding, supervising, preventing,                   Expectations are that in future, Indo-
seas. First, too many - at least eleven -             violation act, shipping safety, and                 nesian coast guard will be institutionalized
laws are interplaying or even overlapped.             protection of public and government                 as it is in the US charged with over all
    Second, a Presidential Regulation                 activities at sea.                                  responsibility of over security at sea.
alone as its legal basis will not be ade-                 Special regulation is also needed                    Future coast guard’s task will cover
quate to give full authority the existing             in management of other issues such as               maritime law enforcement, search and
board to control other institutions.                  international border, piracy, illegal fishing,      rescue at sea, environment protection,
    Third, the institutions legalized to              mining, and environmental protection.               shipping safety, fishery protection, as
enforce security at sea have partially                    So far, sea matters are handled                 well as customs and immigration.




 Coal’s bright prospect
       dot estimates that Indonesia   100.1 million tons in 2010.                    200 million tons annually, it means coal         In future, worldwide demand
  requires 390 coal carriers by             Department Energy and Mineral            reserve will be exploited in 26.5 years.   for coal will increase, amidst
  2010, of which 10 Panamaxes 13      Resources (ESDM) declares that Indonesia              But if the calculation is based     increased trend of oil price.
  Handymaxes, and 367 tugs/           conceives coal reserves of 5.3 billion tons.   on estimated reserves 13.411 billion             Coal is an alternative
  barges. (see chart on previous            About 4.395 billion tons or 83%          tons, it will be exploited in 67 years.    energy to replace fuel that will
  story No Honey, No Money)           is located in Kalimantan, and the rest         If it is based Indonesia’s coal resource   certainly push more companies
       It is anticipating coal boom   905 million is in Sumatera region.             which reaches 90.452 billion tons, it      –such as GPI and Cosco- to tap
  which approximately will reach            If national coal production reaches      will take up to 452 years.                 the growing needs.


                                                                      Issue 01, June 2008                                                                           
                                     highlights


                                  Berlian laju teams up
                                  with teekay on tangguh lng
                                                                                                                  cadets annually to meet the increased                LNG projects which is accelerated after
                                                                                                                  demands for crews from existing 1,600                six foreign banks –dubbed the Fujian
                                                                                                                  to 2,800 by 2012, along the expansion                Tranche- were selected last year to
                                                                                                                  line.                                                provide the remaining $884M for the
                                                                                                                      The company acquired Chembulk                    project.
                                                                                                                  Tankers LLC at $850 billion value. The                    The banks -two each from Europe,
                                                                                                                  acquisition nearly doubles BLT fleet.                China and Japan- together with
                                                                                                                      It now has 82 tankers comprising 58              project leader BP Indonesia will
                                                                                                                  chemical tankers -from 38 prior to the               complete the funding for the $3.5
Photo: indonesia Shipping times




                                                                                                                  acquisition, 15 oil tankers, 8 gas tankers           billion project.
                                                                                                                  and 1 FPSO.                                               Last year VP Jusuf Kalla visited
                                                                                                                      The area of operations includes Far              China among other to discus plans to
                                                                                                                  East, Middle East, Mediteranian Sea and              supply gas from West Papua’s Tangguh
                                                                                                                  Baltic Sea, Africa, and America.                     project.
                                                                                                                      It has ordered 12 newbuildings - 2                    Indonesia has become one of the
                                              Mr. widihardja tanudjaja                                            LPG tankers and 2 LNG tankers- from                  world’s top destinations for energy
                                                                                                                  Korean shipyards and 8 stainless steel               investments, and needs foreign
                                   By haRSon Mando                                                                chemical tankers from Japan’s Fukuoka                expertise to develop its LNG potential.



                                  J
                                                                                                                  Shipyard, Shitanoe Shipyard, Usuki                        Austrian investors have expressed
                                       akarta-headquartered PT Berlian                                            Shipyard, and Osakawa Shipyard.                      interest in Indonesia’s energy and
                                       Laju Tanker has teamed up with                                                 Four are scheduled for delivery in               mineral industry after Energy Minister
                                       Canada’s Teekay LNG Tanker, a                                              2008, three in 2009, four in 2010 and                Purnomo Yusgiantoro addressed the
                                  subsidiary of Teekay Corporation, to                                            one in 2011.                                         Indonesia-Austria Energy Forum in
                                  carry LNG from Tangguh, Papua.                                                      Tangguh is one of Indonesia’s largest            Vienna last year.
                                      The project itself is set to produce by
                                  the end of this year.
                                      A consortium which is spearheaded
                                  by BP Indonesia, requires seven VLCCs
                                  for shipment of LNG Tangguh.
                                      Berlian, the world’s third largest
                                  tanker operator after acquiring
                                  Chembulk, has won a 30-year contract
                                  and will operate two 155,000CM tankers
                                  with price value of $440 million.
                                      President director Widihardja
                                  Tanudjaja tells Indonesia Shipping
                                  Times the composition is 30% of Berlian
                                  and 70% by Teekay.
                                      “We cooperate with Teekay because
                                                                                Photo: indonesia Shipping times




                                  it has vast experience in handling LNG.
                                  Moreover, a vessel of this type is priced
                                  $220 million. Very expensive, isn’t it?” he
                                  adds.
                                      BLT and Teekay start crew training
                                  this year to be placed on both vessels.
                                      Last year BLT established training
                                  facility in Jakarta and trains 147                                                                      Students are using a simulator at Blt’s training center

                                  10                                                                                         Issue 01, June 2008
                                                                                                                                         gateways


              Berlian Jasa spreads logistics wing
                                                                                                 He explains that                     expects BJTI to improve
                                                                                             international and domestic               cooperation with other
                                                                                             container handling, as well as           Surabaya forwarders.
                                                                                             dry bulk service, contributes                The company continues
                                                                                             largely to BJTI.                         to improve and create more
                                                                                                 The company also handles             quality work at the terminal,
                                                                                             30,000DWT Panamax vessel                 says Commercial Manager
                                                                                             that boosts its productivity.            Eko Hariyadi
                                                                                                 Last year, it handled                    “We have progressed
                                                                                             750,000 containers and 2.5               certification here, and 40
                                                                                             million tons of dry bulk.                personnel have been qualified.
Photo: BJti




                                                                                                 Stakeholders at Tanjung              We are now preparing
                                                                                             Perak have supported the                 to certify stevedoring
                                                                                             company’s programs.                      equipments,” Haryadi adds, “to
               By SiMon dJ                         fumigation, container depot,                  The terminal’s adequate              make port users secure.”
                                                   and some other port related               facilities -deeper basin                     There were 8 to 10


              T
                     erminal operator              services into its business.               and berthing line, faster                companies operating
                     Berlian Jasa Terminal             In running those                      stevedoring process, fuel                equipments at BJTI, of which
                     Indonesia (BJTI)              businesses, BJTI has partnered            supply, fumigation, trucking,            most are of high-risk heavy
              continues to spread its              with private companies such               customs clearance and cargo              equipments, including
              business wings in Surabaya’s         as in operating stevedoring               consolidation for oceangoing             container crane and bulk
              Tanjung Perak Port, East Java.       equipments.                               trade, are benefits for                  handling equipment.
                  The terminal calls for               Cooperation with                      shipping lines.                              Certification entails
              participation of any interested      other firms -for instance- is                 It also opens service on             assessment of the strengths
              parties to grow together and         currently done in operating               Saturdays and Sundays.                   and weaknesses of
              develop the business that            rubber tyred gantry (RTG) and                 “Port users will always              stevedoring companies,
              will support the economic            harbour mobile crane (HMC).               find the best partner for                which include the age,
              development in the region.               “We provide complete                  cooperation,” says Prabowo               condition, and lifting and
                  The company has just             services in partnership with              Budi Santoso, INSA chairman              delivering capability.
              made a leap from a terminal          other companies, including                for Surabaya chapter.                        Haryadi says BJTI is ready
              operator to be logistics             with equipment operators.                     East Java stevedores                 to facilitate all certification
              services provider in the area.       Many customers have trusted               also expect BJTI to tighten              processes which will be done
                  With its core business as        BJTI to handle their cargo,               partnership with other                   in cooperation with Biro
              terminal operator, BJTI has also     thanks to the cooperation                 stevedoring companies.                   Klasifikasi Indonesia (BKI)
              added trucking, forwarding,          framework,” says President                    East Java Forwarders                 and East Java Manpower
              cargo consolidation,                 Director Rachmat Satrio.                  Association (INFA) also                  Department.



                TPS deploys new giant crane later this year
                     teRMinal Petikemas            Pelindo III and P&O Port/DP World.             “The shortest possible duration     engine will be done,” Sabatini said.
                Surabaya (TPS) will deploy a new        Spokesperson for TPS Iwan            of the berthing time is very                  The newcomer will bring the
                giant container crane in second    Sabatini said the new crane is expected   important for shipping companies,        total number of TPS giant cranes
                half of the year.                  to run according to the schedule.         so that their ships could reach their    to nine at the international pier
                     The $5.5 million crane             The new crane brings a total of      next destinations much earlier,”         and two at the domestic quays of
                ordered from Argentine will        11 cranes used at the terminal that       Sabatini said.                           Tanjung Perak port.
                replace the CC-07 that was         will boost its moving capacity from            The crane arrived at TPS on March        The flow of containers at TPS
                trampled by typhoon Viona on       40 to 50 boxes per ship per hour.         10 and is idled at quay 910-1000.        in 2006 reached 1,053,466 TEUs,
                February 7, 2002.                       Berthing time will also be                “It was imported in knocked-        and in 2007 reached 1,119,352
                     TPS is a joint terminal       shortened from 19.22 to 17.60 hours       down condition, and in the next two      TEUs and it is expected to reach
                between state port operator PT     per vessel call.                          months, commissioning and trial          1,250,000 TEUs in 2008.


                                                                                Issue 01, June 2008                                                                      11
                                     gateways
Photo: indonesia Shipping times




                                     Though ravels in positive growth in both bulk and container, Pontianak Port
                                     also registers plunged export-import volume due to drop of international ship
                                     visits. Will the port be able to maintain its oceangoing services?



                                  Bigger challenge
                                                                                                                          mostly a result from a drop in export
                                                                                                                          from 626,448 tons to only 376,339 tons.
                                                                                                                              The export-import box also fell from


                                  ahead of the river port                                                                 27,664 TEU in 2006 to 18,909 TEU in 2007.
                                                                                                                              It probably will plunge further
                                                                                                                          following the government policy to

                                   By SiMon dJ                                  has registered 35,256 TEU, of which
                                                                                3,971 TEU of export-import and 31,285      Port guide

                                  A
                                           s Indonesia’s largest river port,    TEU interisland trade.
                                           Pontianak Port has played key            Total tonnage has reached 1.06         facilities:
                                           role in desolating the areas in      million tons, 135,000 tons of export-      Berthing line        :   709 meter
                                  West Kalimantan, and has even served          import cargoes and 932,000 tons of         Warehouse            :   8,090 square meter
                                  as the most viable commercial entrance        domestic cargoes.                          Warehouse capacity   :   19,416 tons
                                  to the province.                                  At the backdrop of this, the port      Yard                 :   52,038m2
                                      A hinterland of 146,807 square            management expects the traffic to
                                  kilometers has contributed to the port’s      exceed 4.3 million tons and 150,000 TEU    equipments:
                                  over 4 million tons cargo and over            in 2008.                                   - 2x30.5-ton container cranes
                                  140,000 TEU in a year.                            Despite the positive trend, data       - 1 25-ton mobile crane
                                      Data shows that the port’s volume         also shows negative growth in export-      - 10x 2-5 ton forklifts
                                  reached 4.11 million tons in 2007, up         import of containerized and non-           - 7x40-ton head trucks
                                  from 4.01 million tons in 2006. Box           containerized cargoes.                     - 6x40ft and 5x 20ft chassis
                                  volume reached 143,443 TEU, up from               In 2007, total tonnage of export       - 2x7 ton and 2x15 ton side loaders
                                  138,991 TEU in 2006.                          import reached 505,912 tons, down          - 3x40-ton top loader
                                      In first quarter (Q1) of 2008, the port   from 730,773 tons in 2006. The drop was    - 3x45-ton super stacker

                                  12                                                      Issue 01, June 2008
                                                                                                                                                              gateways
designate certain ports as international
logistic hubs.
    Primary import commodities are
rice, sugar, fertilizer, and asphalt, and
exports are plywood, particle board,
rubber, and CPO.
    Main inter-island offloading include
cement, fertilizer, rice, fuel, powder,
sugar, CPO, and general cargo, while
main loading include CPO, plywood,
log, and general cargo.
    Abdul Wahab, Pontianak Port’s Head
of Legal Division and Public Relation,
explained that decreased number of
international ship calls has contributed
to the drop in volume.
    ‘River sedimentation hampers big
                                                    Photo: indonesia Shipping times




vessels to call at this port,’ he disclosed,
which has happened since 2006.
    There was only one call per month
last year, a decrease from around three
calls in previous year, he adds.
    In view of the facts, is it relevant for
the port operator to develop services
for oceangoing calls and to run some
programs for improved oceangoing                                                          ‘As of now, the berth for oceangoing                “We cannot easily close the port to the
services?                                                                             and inter-island ship calls is still mixed,             community.”
    In a recent discussion, the port’s                                                but soon will separate container yard,’                     Bahar expects all the programs will
General Manager Amris Bahar disclosed                                                 he added.                                               be ready in August this year.
that the port needs to expand quay and                                                    Separating the oceangoing from                          The management also targets
container yard, procure more facilities,                                              inter-island activity is still a difficulty as          to procure several facilities this year,
separate the yard for export-import                                                   the port has only a 709 meters berthing                 including 4 trontons, and one forklift.
containers from domestic, and enhance                                                 line.                                                       Asked if the drop in export import
human capability.                                                                         Moreover, the berth is not only for                 and the government plan to limit
    ‘Container yard expansion is so                                                   containership calls, but also for general               oceangoing ports will divert the
urgent. And, we have started the                                                      cargo, bulk, passenger, and fishing boats.              management focus to domestic service
program through container track                                                           The river as the local community’s                  only, Bahar says ‘still seeing high growth
improvement,’ Bahar said.                                                             main water way is also a hindrance.                     of export-import in future.’



 Fertile Shipping Lane
      ThE high growth at Pontianak benefits the                                       tight competition among the players,’ said Rosyidi      he said.
 shipping lines and other stakeholders.                                               Usman, chairman of INSA for Pontianak chapter.               Japanese and Chinese investors and
      As of now, 54 shipping lines are competing                                           He predicted a significant growth in export        more than five national investors have begun
 for West Kalimantan market, including 14                                             and import in view of enhanced investment in            exploration in the region.
 Pontianak-based firms, and representatives.                                          mining sector.                                               In 2009, export of iron ore, bauxite, and
      Temas Lines, Tanto Intim, and Samudera                                               Two regencies -Kendawangan (Ketapang) and          gold shell to Japan is predicted to reach 40
 Indonesia are the top three container carriers                                       Sanggau- are the most potential hinterlands with        to 80 boxes per month or more than 400,000
 conducting regular services to and from                                              their iron ore, bauxite, and gold shell that is ready   tons.
 Surabaya and Jakarta.                                                                for export in 2009.                                          He expected the operator of Pontianak port
      ‘In future, the shipping business in West                                            ‘In the last three years, the export-import has    to accelerate the development of yard and quay
 Kalimantan will be brighter, though now there is                                     been decreased, but it regain strength after 2009,’     for export-import.


                                                                                                    Issue 01, June 2008                                                                    1
 gateways


 Bank’s full support
     NaTiONal banks recognize the
 potencies that Belawan Port has and would
 finance its expansion. They say the port is
 feasible for any investment.
     Bank Mandiri director Abdul Rachman,
 said banks are ready to finance port
 projects, including Belawan Port and said
 would wait for the proposal from Pelindo I
     Pelindo I president director Prayitno
 said the port’s sedimentation hinder
 Belawan to develop as world class port.
     The basin sediments around 1.5 meters
 a year and needs Rp30 billion annually for
 dredging.
     About Rp1.2 trillion is required to
 relocate Belawan’s turning basin and
 around Rp1.6 trillion for the development.
 Pelindo can not self finance those
 programs.
     “Pelindo I could afford only around
 Rp400 billion. So, we really appreciate any
 financial institutions or banks that will
 finance the projects,” he appealed.
     The company’s short-term plan
 includes building a 300meter wharf,
                                                                        putting Belawan
                                                  Photo: Portrait




 develop a 13.5 hectare container yard, and
 relocate 13.5 km turning basin.
     Vice President Jusuf Kalla had asked
 Pelindo I directors seek loans from national
                                                                        into world trade circle
 banks to finance the development of
 Belawan Port as hub.                                               It’s been a shipping community discourse that Belawan Port will be
     ‘’I think banks can disburse Rp2 trillion                      one of Indonesia’s international hubs due to its strategic location
 or more,” Kalla said.                                              within the range of the world’s busiest trade lane, Malacca Strait.
     Kalla assured that the government is                           The potentials of North Sumatra and surrounding areas also
 committed to develop Belawan into hub                              play crucial role. Rizal Hasibuan reports what hampers the plan
 because it will drive up contribution to the                       including the USCG’s warning of incompliance with ISPS code that
 national economic growth.                                          could menace the progress.


                                                                    I
     He urged all parties, including banks,
                                                                      f Indonesia wants to have             says President Director of PT CMA
 to gear all efforts to develop this port to be                       international hub port, the choice    Indonesia Jean Charles Tassoni.
 world class port.                                                    goes to North Sumatra’s Belawan and      Compared to Tanjung Priok
                                                                    Batam as the most feasible locations,   –currently handles over 50% of the

1                                                                            Issue 01, June 2008
                                                                                                                            gateways
country’s export import, the two ports’              from 2,602,450 tons in 2002 to 2,890,164


                                                                                                            Tenau boasts in
location closer to the world’s busiest               tons in 2003, and rose to 3,380,845 tons
trade lane, Malacca Strait, is a plus.               in 2004, a 16.97% increase.


                                                                                                            strategic link
    Moreover, Belawan has been                           But it dropped in 2005 by around
nominated as hub by DG of sea                        7.60% to 3,141,865 tons and further
transportation, along with Tanjung                   plunged to 3,109,477 tons in 2006.
Priok, Tanjung Perak, and Bitung.                        Based on last year’s data also, CPO                 By SiMon dJ
    But being the nearest to Malacca                 contributed 86.17% or 3,285,893 tons of
Strait, will                                                                Belawan’s non-oil                    the government has designated Port
Belawan become                                                              and gas export                  of Tenau, Kupang, East Nusa TEnggara, to
Indonesia’s most                                                            which reached                   be one of four additional international hubs
competitive port in                                                         3,813,107 tons.                 in view of its strategic position in the Asia-
the future?                                                                     Apart from                  Australia trade lane.
    The answer                                                              CPO, container                       The government previously only decided
                         Photo: Portrait




to the question is                                                          handling is also                Tanjung Priok, Tanjung Perak, Belawan, and
not that easy. But                                                          the port’s strength             Bitung, but later Sabang, Batam, Sorong, and
take a look. This                                                           which is handled                Tenau were added into the list.
port is Sumatera’s                                                          at Belawan                           “The last four are expected to support
biggest gateway and Indonesia’s main                 International Container Terminal.                      the previous ones to ensure smooth freight
export gate for agricultural products,                   In a year, this port handles around                flow,” says Effendi Batubara, deputy minister
particularly CPO.                                    500,000-700,000 TEUs, most of which                    for sea transportation.
    Last year the port recorded CPO                  are shipped with feeder vessels to PSA                      Echoing the view, Kholik Khirom, director
export of 3,285,893 tons, an 18.45%                  Singapore and Port Klang.                              of port affairs says the four ports have strategic
increase year-on-year, from 3,109,477                    These facts -potencies and strategic               position to be international logistic hub as they
tons in 2006.                                        location- are reasons for Pelindo I and                are located at the international trade lanes.
    In the last five years, the port’s CPO           the government to develop it to be an                       “Their status as hubs will encourage more
export fluctuates. It increased by 11%               international hub, -but how?                           international shipcalls and then the cargoes
                                                                                                            will be distributed by national carriers to
                                                                                                            various destinations nationwide,” Khirom says.

 Three-phased expansion                                                                                          Khirom explains that the development of
                                                                                                            those ports into hubs will run in phases, in line
                                                                                                            with cargo growth and availability of commodity.
       PrayiTNO, President Director of PT                 The fund for this project will be a                    The ports will also have to adapt with
  Pelindo I explained that Belawan port will be      combination of the company’s internal fund,            the international shipping lanes. Tenau
  developed in three phases: short, medium, and      foreign loan, state budget, and JV with private        Kupang is close to Asia-Australia routes and
  long-term plans.                                   firm.                                                  Sorong is close to Pacific lane.
       Short-term program which runs from                 The turning line will also be extended                 Port of Tenau is chosen for several reasons,
  2006 to 2010 focuses on reorganizing and           from 100 meters to 250 meters to have a two-           particularly referring the existing port facilities.
  rehabilitation of Ujung Baru Citra.                way traffic. Works will also include dredging               It has four wharves: a multi-purposes
       It also includes relocation of passenger      of channel to 12 or 13 meters, and expand              wharf built on a 10,950m2 area (berthing
  terminal, development of cargo terminal,           container yard.                                        mouth of -19m LWS), a 3,345m2 national
  turning basin extension, dredging, and                  The port’s two new container cranes will be       wharf with berthing mouth of -13,5m LWS,
  improving berthing line.                           delivered in 2008 adding to two existing cranes        local wharf (1,600m2 and -7m LWS), and
       The medium-term (2011-2015) will focus        procured in 2007.                                      traditional wharf (500m2 and -4,5 m LWS).
  on development of liquid bulk terminal, while           However, failure to fully adopt the ISPS               The multi-purpose wharf will enable the
  long-term program (2016-2020) focuses on           Code remains a bottleneck that will slow down          port to accommodate the berthing of mother
  development of general cargo terminal.             Belawan’s international service.                       vessel.
       The container terminal, Prayitno adds, will        The USCG put Belawan International Terminal            Recently, Tenau handled only basic
  also be developed in three phases. Phase I is      in the list of six Indonesian terminals that had not   commodities such as rice, corn, wheat,
  dedicated to develop a 200-meter terminal.         complied with the IMO security code.                   cooking oil, and fuel for local consumption.
       Phase II will focus on construction of a           The USCG’s strict audits are made in                   Export and import commodities comprise
  300meter berth; and phase III (2016-2020)          preparation for the US ‘100-percent scanning’          only small number of forestry products (logs,
  will focus on procurement of the terminal          legislation due implemented in 2012 at all             plywood), husbandry products (cow, goat,
  equipment.                                         foreign ports bound for the US.                        pig), fishery, and mining (coal, gypsum).


                                                                   Issue 01, June 2008                                                                        1
    gateways


gresik port mulls to be coal gate
As fuel price hike pounds, industries and manufacturers turn to coal to save cost.
In East Java, Pelindo III maps the best place as coal port.
 By niRwanto




I
   NCREASED consumption by
   industries has catered for more coal
   demands.
    If need for coal stays on higher
footage, it will be a harvest time for
suppliers, carriers, port operators,
stevedores, and other related business.
    A number of companies in East Java
have abandoned fuel and turned to
coal, including leading manufacturers
–PT Tjiwi Kimia, PT Pakerin, PT Prima
Electric, PT KDI Driyorejo, sugar
producers PG Mrican and PG Jombang.
    Pelindo III, which runs state port in
                                                     Photo: nn




East Java, sighs with the trend.
    “Coal is a potential commodity
that boosts port productivity,” Robert
Sianipar, Pelindo III Marketing and
Business Development Director                                    also jump,” he said.                                    significantly from 1.13 million tons
describes the phenomenon.                                             Grabbing the opportunity, Pelindo                  in 2005 to 2 million tons in 2007. It
    “In turn the company’s revenue will                          III has dedicated Gresik Port for coal                  forecasts over 2.8 million tons in 2008.
                                                                 activities, due to its close connection                     Such productivity is another reason
    Port                        tariff per ton                   with industrial centers in the region.                  of port operator to have coals East Java
                                                                      The port is also preferred as it                   handled at this port.
    Gresik                        Rp17,784
                                                                 would mean to reduce pollution at                           Though the plan triggers stevedores’
    Tanjung Perak                 Rp15,000
                                                                 Tanjung Perak which is close to the city’s              protest whose livelihood mostly relies
    Tanjung Emas                  Rp10,000
                                                                 downtown.                                               on coal business at Tanjung Perak, the
    Cirebon                       RP10,000
                                                                      Coal volume at Gresik Port increased               strategy seems quite effective and will



 Stevedores resist the move
      ThE move to conjure up Gresik as primary                   6/2006 signed by Agum Gumelar, despised the                  “It’s so expensive,” says TF Sitorus, head
 coal gate has sparked protest.                                  situation.                                              of East Java stevedores. The tariff was decided
      Stevedoring companies say that removing                         With the existing framework Pelindo has            without due consultation with them
 from Tanjung Perak to Gresik is costly,                         breached the rules, while point 6 of circular forbids        General Manager of Gresik Port, Soepardi
 threatening their survival.                                     Pelindo to monopolize stevedoring activity.             acknowledged the protest on the policy.
      Besides, the existing share contract proves                     They also disagree with increasing tariff at            “We have no choice to improve our services.
 to be Pelindo’s strategy to perpetuate monopoly.                Gresik, from Rp14,872 to 17,784 per ton, the            Existing tariff was set up in 2002, and no
      Tariff adjustment set up last year is also a               highest among Pelindo III ports.                        adjustment ever since,” he stated.
 crucial issue.                                                       Tanjung Perak levies Rp15,000/ton, Tanjung              He said each port has its own policy and
      Agus Irwan of PT Matra Lestari Bahari,                     Emas and Cirebon, West Java’s main coal gate            port users are free to choose the port they can
 quoting Transport Minister’s circular No. SE                    charge Rp10,000/ton.                                    use. It is free market competition.


1                                                                             Issue 01, June 2008
Photo: Port of gresik
                                                                                                                                               gateways




                        run unhampered.                                       Gresik Port deploys two cranes                    Hanreng Laima disclosed it had invested
                            Consequently, Pelindo III will develop        with moving capacity 250 tons/hour,                   over Rp40 billion for wharf construction,
                        the port’s infrastructures -turning basin,        respectively.                                         and Rp10 billion has been used for
                        breakwater, and berthing line.                        The management also plans to add                  renovation.
                            Works will also include extension             one more crane, despite the existing                      In 2007 coal contributed 60% of
                        of port area, buying new facilities and           facilities have reached only 35% of total             Gresik port income, and in 2007 it
                        cooperation with third party.                     capacity.                                             earned net income of Rp20.5 billion.
                            Existing facilities can handle                    Pelindo has appointed stevedoring                     The port’s General Manager
                        2 million tons annually -or about                 firm PT Gresik Jasatama to build a new                Soepardi is optimistic that the revenue
                        58% of port capacity- but a jump in               coal wharf under a 20-year BOT scheme.                will increase parallel with predicted
                        productivity may require new ones.                    Jasatama President Director                       increased need for coal.




                          Mitra Sriwijaya, Bukit Asam plan coal terminal
                               PT Mitra Sriwijaya unveils         Bukit Asam will provide 20 tons   government support particularly for     here,” he said.
                          the plan for a $650M coal          of coal annually.                      permit and land clearance.                  Similarly, governor of
                          terminal in Tanjung Kalian,             In his presentation to Bangka          The regent of Bangka Barat         Kepulauan Bangka Belitung Eko
                          Bangka Barat regency -             Barat regent and House of              Farhan Ali in his speech promised       Maulana Ali is optimistic the
                          Kepulauan Riau Province.           Representatives, Mitra Sriwijaya       would facilitate the permit,            project will boost local economy.
                               In partnership with coal      president director Oki M. Yusuf        considering the project will have           He said it will certainly create
                          mining company Bukit Asam, the     explained the benefit of the project   positive impact on local people.        more commercial opportunities
                          project is scheduled to commence   to the area.                                “I hope this project will create   as more coal carriers come and go
                          in August this year.                    However, he expects               job opportunities for the people        through the region.


                                                                                        Issue 01, June 2008                                                                    1
gateways
                                                                                                                                                         gateways


                            Priok’s domestic tonnage up,
                            but international cargo down
                                                                                                                                      CPO, coal, sand, and chemical liquid.
                                                                                                                                          The loading cargo also increased
                                                                                                                                      24.5 per cent from 1,379,365 tons to
                                                                                                                                      1,717,796 tons, -mostly contributed
                                                                                                                                      by increased shipment of bag cement,
                                                                                                                                      general cargo, and clinker.
                                                                                                                                          Despite an over all growth in
                                                                                                                                      domestic shipment, the international
                                                                                                                                      trade through the port fell significantly.
                                                                                                                                          Export was down 25.9 per cent
                                                                                                                                      from 1,870,199 to 1,385,825 tons, which
                                                                                                                                      was mostly contributed by the drop of
                                                                                                                                      cement and clinker trade.
                                                                                                                                          Similarly, import was down slightly
                                                                                                                                      by 1.1 per cent, from 3,158,326 to
                                                                                                                                      3,122,777 tons, mostly due to the drop
Photo: tanjung Priok Port




                                                                                                                                      of sugar, rice, wheat, fat, animal food,
                                                                                                                                      iron, chemical, and fuel.
                                                                                                                                          Container handling also dropped by
                                                                                                                                      18.1 per cent to 246,418 TEUs (209,746
                                                                                                                                      boxes) from 303,229 TEUs (251,462
                                                                                                                                      boxes) in the same period last year.
                             By KaRnali faiSal                                   9,712,891 tons in similar period last year,              Meanwhile, shipcalls were up 13.7
                                                                                 according to a company report.                       per cent from 3,848 units (21,608,838


                            T
                                he tonnage served through Tanjung                    The volume of domestic offloads                  GT) to 4,377 units (22,169,920 GT).
                                Priok conventional terminals in first            increased 25.5 per cent, from 3,305,001                  This includes 1,298 foreign calls,
                                quarter of this year has grown by                to 4,148,423 tons, which was mostly                  2,991 units of domestic calls, and 88
                            6.8 per cent to 10,374,821 tons from                 contributed by increased shipment of                 state guest calls.




                              Call for rejuvenation of trucking fleet
                                   ShiPPing industry blames poor trucking             Average trucking utilization has deteriorated   blame trucking system as the single cause
                              system and damaged roads as the culprit of         from around 2.5 trips per day in the 1990s to only   of slow container movement,’ responds a
                              slow container movement at Tanjung Priok port,     0.58 trips per truck in a day in 2007.               spokesperson of truckers’ association at the port
                              Indonesia’s largest seagate.                            “A combination of all these factors has               Truckers ague that poor road access and
                                   Other problems include insufficient parking   resulted in a considerable deterioration of          lack of parking areas for container trucks have
                              space, manual documentation, and damaged           container movements through Tanjung Priok Port,’     derailed container flow.
                              access roads.                                      says Iskandar Zulkarnain, INFA deputy chairman.            On the other hand, shippers have blamed
                                   Apart from extended delays it could also           He expects truckers to renew their fleet        the schedule of shipcalls, which mostly during
                              void goods that need immediate delivery.           otherwise cargo delivery will not be optimized.      the weekends, for slow container movement.
                                   Data indicate that around 6,000 container          Trucking firms admitted their shortcomings            “Cargo deliveries are up to shipcall schedules.
                              trucks currently operating at Tanjung Priok are    but argued that the poor trucking system was not     It forces so many boxes delivered from industrial
                              above seven years old. As such has resulted in     the only problem.                                    centers approaching the weekend,” says Amiruddin
                              low efficiency and poor productivity.                   “The problem is quite complex. We cannot        Saud, chief of the importers association.


                                                                                              Issue 01, June 2008                                                                             1
cover story




shipping Bill
Hark! the message,
discover the opportunities,
face off the challenges



Despite mounting protest of stevedores, agencies, and over 10,000 Pelindo workers, the
parliament finally endorsed the new shipping bill on April 8. Many have believed it will
transform the country’s shipping industry. But what does it do and what is it going to
change? Kahar Basuki, Simon DJ, Harson Mando attempt to answer the enquiries.
                                                                                                                                                          cover story



                                    T
                                          HE new bill was born                  But luckily enough, the              ‘where is the new law leading
                                          out of concern over              House of Representatives                  us from here? Is it guiding
                                          the bad-shaped                   ratified the bill which was               us “to be master of our own
                                    industry which had been                drafted through a very long               land” or broadening the
                                    dragged into an extremely              process.                                  liberalization which for some
                                    costly zone.                                It’s quite natural though            peoples a nightmare?’
                                        The country’s shipping             that the industry welcomes                     For the moment just keep
                                    industry has been                      the new regime with mixed                 those questions. We are just




                                                                                                                                                          Photo: anggi
                                    agonized, overwhelmed                  feelings.                                 beginning. If the law proves
                                    by the so-called acute                      Some are optimistic that             to be unworthy, then we may
                                    mismanagement                          it aims to improving the                  have to neglect it. But for the
                                    syndrome. Once, business               country’s sea transportation,             time being, let’s see what the
                                    leaders said ‘were choked’             but there is also fear of ‘overly         law has seen.                                       in shipping business.
                                    as they could not turn else            liberalized’.                                  In comparison with the                              But at the same time
                                    where to find refreshing.                   Many have wondered                   1992 bill that contains only                        the industry players have
                                                                                                                     15 chapters and 132 articles,                       to be cautious of the
                                                                                                                     the new bill contains 22                            ‘threats’ that the law might
                                      CABOTAGE:                                                                      chapters and 355 articles.
                                                                                                                          The additional chapters
                                                                                                                                                                         impact.
                                                                                                                                                                              Apart from opening the
                                            THE bill as a matter of fact     to an extent only few ports are         regulate, among other                               door to the opportunities
                                      is strengthening the cabotage          open for international trade.           things, mortgages and loans,                        that the law offers, there
                                      regime that has been regulated         Other countries such as Japan,          maritime safety and security,                       is still a need to build
                                      in a presidential decree issued in     USA, Netherlands, etc., enforce         harbor masters and the                              “firefall” to screening the
                                      2005. It strongly emphasizes that      cabotage.                               establishment of a sea and                          unexpected tendencies
                                      no foreign carriers are allowed to          Indonesia, on the other            coast guard.                                        such as foreign domination
                                      carry passengers and/or cargo to       hand, has opened nearly all ports            So, what is it going to                        in port operations.
                                      and from islands or ports within       in 1988 to international trade.         tell us? It shows that the                               Though the new bill re-
                                      Indonesian territory.                  Consequently overseas carriers have     bill is very comprehensive,                         instates cabotage, there is
                                            Cabotage implies that            entered freely, causing a collapse of   covering a vast range of                            still question to ponder: ”Is
                                      Indonesian ports are closed-ports      domestic shipping companies.            aspects in the industry. It                         it strong enough to protect
                                                                                                                     sufficiently ensures certainty                      domestic interest?”




                                  it lures more investment
                                                                               He says it establishes
                                                                           solid foundation for the
                                                                           restructure of sea transport
                                                                           system to be more professio-
                                                                                                                      Ship as collateral
                                                                           nal and competitive globally.                   BANKS reluctance to give                           Shipowners further
                                                                               The bill legitimates                   loans was caused by the absence                    shouldered the burden as they
Photo: indonesia Shipping times




                                                                           government authority to                    of hypothec and arrest of ship,                    could not find long term contracts
                                                                           take control over all strategic            uncertain claim. Shipping was                      with shippers.
                                                                           assets such as ports that in
                                                                                                                      seen high risk and long yield.                          But the new law on hypothec
                                                                           turn will be used for a greater
                                                                                                                           Domestic bank then                            will help shipping lines out of the
                                                                           public interest.
                                                                               “It puts private and state             shield themselves by enforcing                     murky water. Indonesian registered
                                           Mr. oentoro Surya
                                                                           owned firms on the same level,”            complicated requirement to                         vessels [can be used] as collateral.
                                      iNSa chairman Oentoro                Surya says referring to the effect         shipwoners, high interest rates                    Grosse certificate will be issued
                                  Surya hails the new law as               that the new law will bring                (over 15pc), higher ratio (65:35)                  and has executorial power equal to
                                  it protects the interest of all          particularly private participation         and additional collateral.                         court’s decision.
                                  stakeholders.                            in managing ports.

                                                                                                         Issue 01, June 2008                                                                              21
                  cover story
                  cover story
     He is optimistic that                          On of main concern is
the new bill will lure more
investment in port and
shipping affairs as it unifies
                                                how to get bank loans. But
                                                the new law has responded it
                                                by regulating hypothec that
                                                                                   What will government ensure?
all stakeholders.                               will encourage banks to pour       in fleet expansion:                        & ship components;
     “It brings the same spirit                 in credits for fleet expansion.     facilitating funding and tax;           giving incentive to domestic
                                                                                    facilitating long term contracts         shipping firms that order/
to shipping lines, ship-                            Hypothec was not
                                                                                       between shippers and shipowners;       repair ships in domestic
builders, and other related                     regulated in the 1992 bill. But     ensuring steady fuel supply.             shipyard and/or those order
business to move together to                    now, Indonesian registered                                                    from overseas shipyards;
established a strong maritime                   vessel can be used as              in shipbuilding:                          ordering from local shipyard
industry,” he explains.                         collateral.                         determining integrated                   if a project is funded via state
     The new bill has also                          The industry projects              shipyard zone.                         budget;
brought new hope for                            significant increase of             building national ship design,          ensuring that building of
stevedores that previously                      investment because                     research and development center.       foreign-funded ship with use
had been against the                            Indonesia has ratified              developing standardization               of more local content and
                                                                                       and ship components with               know-how transfer;
amendment. They finally                         mortgage law, arrest of
                                                                                       more local contents, and know-        maintaining, repairing ships
admitted the significance                       ship and cabotage that will            how transfer;                          at local shipyards if funded by
of the bill in improving                        ensure long term contracts          developing industry materials            state budget.
professionalism.                                with banks.




                  ending monopoly
                  in port management
                                                                                  problems are certainly under                  “The parliament has
                                                                                  its responsibility,-though                done the right thing in
                                                                                  take note that not entirely its           separating the regulator
                                                                                  fault.                                    from operator. The rule
                                                                                       The most conspicuous                 applies anywhere,” Prof. Ir.
                                                                                  change in the new law is                  Soegiono, an analyst and
                                                                                  scrapping Pelindo’s authority             former ITS chairman tells
                                                                                  over port policies.                       IST Correspondent.
                                                                                       The bill seems to tell                   What matters in
                                                                                  that ending the operator’s                existing port management,
Photo: Portrait




                                                                                  monopoly is “the first                    he adds, is the arbitrary use
                                                                                  condition’ to improve the                 of state-owned lands by
                                                                                  country’s shipping industry,              Pelindo and its monopoly
                                                                                  because port is the heartbeat             over port activities.
                                                                                  of shipping activity.                         From now on, Pelindo
                      ONE of crucial            ports.                                 However, it does not                 will function as port
                  issues that have sparked          Poor port management          completely rip off Pelindo’s              operator only, not policy
                  controversy is ending of      has hampered the                  rights. It retains its authority          maker; and it is given three
                  Pelindo monopoly in port      competitiveness of                over 112 ports under its                  years to adjust with the
                  operations.                   Indonesian products in            management nationwide.                    new law.
                      It seems there is no      global market. Not only that,
                  other way to escape from      the image of Indonesia has          Change in port law aims at:
                  Indonesia’s ports that are    also been scarred.                  n separate regulator and operator       n eliminating monopoly [of Pelindo]
                  strangled by high cost and        Since Pelindo is the sole       n healthy competition                   n trebling port efficiency
                  inefficiency than to change   operator of the country’s           n more authority to local governments   n bolstering capital on ports
                  the paradigm of looking at    commercial ports, all of these


22                                                                     Issue 01, June 2008
                                                                                                                cover story
                                                                                                                cover story



  indonesian port
  and Maritime authority




                                                                                                                   Photo: indonesia Shipping times
      SiNCE Pelindo is              PMAI? Name doesn’t matter,            smooth flow of goods in and
  no longer policy maker            as long as there is port              out of ports,” the minister says.
  (regulator), the new law          authority].                               The details of its
  stipulates that port policies          Transport Minister               responsibilities include
  and activities will be the        Jusman Syafii Djamal says             providing land and                                                              Mr. Jusman Syafii djamal
  responsibility of port            port authority will be in             water areas, building and
  authority.                        charge of developing,                 maintaining breakwater,                                                         Port authority will
      [Will it be the               controlling, and guiding              channel, basin, and road.                                                  also supervise the use of
  Indonesian Port and               all activities of commercial              It will also provide                                                   port areas, manage vessel
  Maritime Authority/IPMA           ports.                                and maintain navigation                                                    traffic/pilotage service and
  or Port and Maritime                   “It’s charged with main          facilities, ensure security and                                            determine operational
  Authority of Indonesia/           responsibility to ensure              orderliness at port, maintain                                              standards of port services
                                                                          port environment.                                                               “In short, port and
    Regulations required:                                                     It prepares port                                                       shipping affairs will be in
                                                                          masterplan, proposes tariff of                                             the hands of Indonesian
    n   Multimodal transportation     n   Coast guard                                                                                                port authority,” the minister
                                                                          port and facility use to DOT,
    n   Seafarers’ welfare            n   Shipping accidents                                                                                         adds. Details of the scope
                                                                          manages and supervises the
    n   Maritime environment          n   Navigation                                                                                                 of its duty await specific
                                                                          use of land and water areas
    n   Port authority                n   Passenger safety                                                                                           regulation.
                                                                          at ports.




investment regulation a bottleneck
    ONE of the intentions of        to 49% is a bottleneck for port       European Business Chamber                                                  if they share composition is
the new bill is to invite more      development.                          of Commerce for Indonesia                                                  up to 70%, with concession
private investors in port               Government regulation             underlined the need for                                                    of 50 years
development                         (PP) No. 111/2007 stipulates          higher share.                                                                   Foreign investors also
    However, David Ray, Deputy      that foreign investors can                “Several well-known and                                                question the capability of port
Project Director of SENADA          hold a maximum of 49% in              highly credible European                                                   authority to accommodate a
says that one of obstacles the      port investment.                      companies are interested in                                                fair competition.
investment law that limits              That also applies to              Indonesia’s port. But they                                                      Poor infrastructure, poor
foreign share to only 49 percent.   investing in stevedoring,             expect higher composition                                                  access road, and government’s
    “Such framework                 sewerage management,                  of share,” Michael said.                                                   financial incapability to cost
menaces foreign investors           port facilities, warehouse,               He ascertained that many                                               infrastructure development
to participate in port              container terminal, liquid bulk       investors would invest in                                                  are also cited as reasons for
development,” he said.              terminal, and ro-ro terminal.         developing Indonesia’s ports                                               holdback.
    SENADA is an assistant              He further said the
program of the United States        limitation of oceangoing                obstacles to foreign firms:
Agency for International            ports will halt the opportunity
                                                                            n   Limitation of foreign share at maximum 49%
Development (USAID) to              of certain areas to develop
                                                                            n   Plan to cut number of oceangoing ports from 140 to only 25 ports, even less
build up competitiveness in         their own oceangoing port.
                                                                            n   Unclear and unintegrated port master plan
Indonesia.                              “This will also limit
                                                                            n   The capacity of port authority
    Though admitting                opportunity for investors to
                                                                            n   Government intervention in port tariff set up
that the new bill opens             do more investment,” he said.
                                                                            n   Unclear regulation on special port/terminal.
participation of private sector,        Earlier, Michael Olsson,
                                                                                                                                          Source: SENADA
he said, limiting foreign share     Deputy Chairman of

                                                               Issue 01, June 2008                                                                                                   2
                  cover story
                  cover story


                                                  scaling the opportunity
                                                  and possible threat
Photo: anggi




                                                  Times.                                            that forcing the cabotage                             “In such cooperation, the
                                                      Director General of                           could potentially create back-                    government has to tighten
                                                  Sea Transportation Effendi                        door deals by shipping lines                      control to avoid foreign com-
                                                  Batubara said new law widens                      with foreign companies.                           panies taking over,” he said.
                       Mr. Randy effendi          the opportunity to local                               He fears that under                              Local shipping sector
                                                  players.                                          ‘back door deal’ foreign                          might need at least three


               T
                       he bill’s enactment has        DOT reports that last                         firms would establish a                           years before it could expand
                       been corridor talks, but   year Indonesian flag vessels                      new company that will fully                       fleets, due to unfavorable
                       domestic shipping lines    carried 148.7 million tons                        control over local partner.                       policies such as tax and
               perceive it differently. Some      of domestic cargo, or 65.3                             “In the end we are only                      incentives.
               see it a good opportunity, but     percent of the total, while                       showcase-company,” he                                 Analysts say domestic
               some fear its impacts.             34.7 percent was served by                        challenged.                                       shipping lines need more
                    Randy Effendi, President      foreign shipping companies.                            He also suggested that                       time to prepare, at least until
               Director of Samudra                                                                  government and funding                            2015, unless the government
               Indonesia admits that the          Possible threat                                   sources to be more selective                      exempts the 10% VAT on
               new bill will certainly benefit          Despite all good talks                      in disbursing loans, to priori-                   vessel purchases and capital
               national shipping lines.           about the law, the small- and                     tize small shipping lines than                    gains tax (CGT).”
                    It provides them wider        medium-scale shipping firms                       the well-established ones.                            VAT has caused home-
               opportunity to expand              are still pessimistic of the                           As of now, national                          made ships become more
               business and increase market       good thing it will bring.                         banks are still reluctant to                      expensive than those built
               share, especially in domestic            They even question the                      disburse credit to shipping                       overseas; and CGT has caused
               shipment.                          new trend of shipping lines                       lines. So, doubts over full                       local shipping companies to
                    “It gives priviledge          that are secretly financed by                     implementation of cabotage                        suffer capital cutbacks.
               to national shipping               foreign companies.                                are reasonable.                                       “When a shipping
               lines to fully control all               They also doubt the                              Similarly, Sungkono                          company receives money
               domestic shipment,” he told        government programs                               Ali, INSA secretary general,                      from an insurance firm, for
               participants in a seminar          in empowering shipping                            underlined any hardship to                        example, 30% will be for
               conducted by Ocean Week.           industry, particularly the                        obtain Rp34 trillion needed                       tax. It is an irony because
                    He cited lacks of bulk        demands for at least 654 new                      for fleet expansion, in just less                 that amount can be used to
               carriers suchs as for coal         vessels, with total value of                      than two years.                                   purchase a new vessel,” Randy
               shipment from Kalimantan to        about Rp34 trillion.                                   He then recommends                           Effendi said.
               Java is something to tackle.             The unclear scheme of                       building a consortium                                 “Such policy hampers
                    The view was echoed by        financing the industry has                        through partnership with                          local shipping companies
               Widiharja Tanudjaja, President     created doubts, including                         foreign companies, but                            to acquire new vessels,” he
               Director of BLT, who said it       to Hyrman Soemadiredja,                           “maintain our majority share.”                    added.
               ‘legal basis to fully take over    Chairman of Maritime Com-
               the interisland shipments.’        munity (MPM). He doubts
                    It will help winning          if cabotage will run as
               back commodities that are          expected.
               still dominated by foreign               “It’s true that government
               shipping lines, he added.          has asked for banks’ support
               Foreign carriers are still         for shipping sector. But
               carrying 70% of domestic oil       it is inadequate, because
               shipment.                          banks will evaluate weather
                    “Pertamina is now             a shipping company is
               deploying more than                bankable,” he said
                                                                                     Photo: anggi




               100 vessels for domestic                 He then expects the
               oil distribution; and only         government to designate
               30 national flag vessels,          certain institution in charge
               including 11 units of BLT,”        of inancing shipping industry.
               he told Indonesia Shipping               Soemadireja also argues                     Shipping Stakeholders were discussing the opportunities and challengers of the new shipping bill

               2                                                         Issue 01, June 2008
                                                                                                                                             logistics


                  expensive road transportation
                  crumples economy
                                                                                                     The survey -supported               such as route permits and
                                                                                                 by Canadian International               retributions levied by local
                                                                                                 Development Agency (CIDA)               government have added
                                                                                                 and the World Bank- has                 more expenses for truckers.
                                                                                                 explicitly studied the cost of              Collecting fee illegally
                                                                                                 permit, levies on the road,             from truck drivers by security
                                                                                                 and expenses due to poor                officers, including police and
                                                                                                 infrastructure on those                 preman (=recruited civilian),
                                                                                                 routes.                                 has worsened the already-
                                                                                                     Neil McCulloch, director            bad-condition.
                                                                                                 of economy programs at                      The survey then recom-
                                                                                                 the Foundation clarifies                mends some crucial measures
Photo: Portrait




                                                                                                 that several key factors are            to Indonesian government,
                                                                                                 intertwined.                            including reevaluating all
                                                                                                     These factors shrink the            transport regulations on
                                                                                                 competitiveness of Indone-              national and local levels. (see
                   By iBnu Syafa’at                            The conclusion was                sian trade in comparison with           chart for complete recom-
                                                           made after conducting a               other Asian countries.                  mendations).


                  T
                        he Asia Foundation                 comprehensive survey on                    “High cost of goods
                        concludes its                      nine routes in Indonesia in           transporting in Indonesia
                        survey saying that                 cooperation with University           is not only due to poor                   Crucial findings:
                  unreliable and expensive                 of Indonesia’s Institute for          infrastructure, but also
                  road transportation is one               Economic and Social Research          retributions levied by local             n RI’s domestic transportation
                  of biggest constraints to                (LPEM-FEUI).                          government and illegal                      is higher than in Vietnam,
                  Indonesia’s economy.                         The routes are Bulu-              picking,” McCulloch explains.               Thailand, Malaysia and
                      Placed in a global                   kumba-Makassar, Pare Pare-                Indonesia’s topography                  China
                  logistics map and in Asia in             Makassar, Palopo-Pare Pare,           (long and winding roads)                 n	 The cost in Indonesia is
                  particular, Indonesia’s road             Mamuju-Pare Pare, Marisa-             and low quality of road infra-              Rp3,093 or $0.34/km, while
                  transportation is below                  Gorontalo, Kotamobagu-                structure have significantly                Asian average is $0.22/km.
                  par. The country’s trucking              Manado, Sumbawa Besar-                driven up operating cost for                It menaces Indonesia’s trade
                  industry is high cost and                Mataram, Malang-Surabaya,             fuel and truck maintenance.
                                                                                                                                             competitiveness worldwide
                  inefficient.                             and Rantau Parapat-Medan.                 Regulatory red-tape
                                                                                                                                          n	 Topography and poor road
                                                                                                                                             infrastructure increase fuel

                   Recommended Solutions:                                                                                                    & maintenance costs
                                                                                                                                          n	 Local govt. raises costs by
                                                                                                                                             issuing permits and licenses;
                         ReMedial measures                 model to abolish abolishing           eliminate reliance on road                  imposing user charges.
                    should focus on enforcing good         border charges. In China cross        charges, which is illegal.                  Other countries (China, EU)
                    legislation, while seeking to          border permits are illegal. While          Provincial governments are             ban illegal charges and local
                    eliminate unnecessary charges          Eurovignette abolishes common         encouraged to list and campaign all         govt. to issue permits.
                    that have hampered free flow of        rules for tolls and time-based user   legal charges and permits and their      n	 Insecurity in the road
                    goods in Indonesia.                    charges.                              costs in order that public will know.       transportation by police
                         The government should re-              Local government should               Support the efforts of DOT             and preman who routinely
                    evaluate all transport regulations     be able to understand that local      to monitor and enforce weight               demand truck drivers to pay
                    on national and local levels, such     regulations may not be for the sake   stations. Weight measurements               certain amount.
                    as prohibiting route permits or izin   of increasing revenue alone but       should be cross-checked and              n	 Police officers, the army,
                    trayek for trucks carrying goods.      should also think of smooth flow      punishment should be stringent.             and criminal organizations
                         Indonesia could adopt             of goods. Finding out alternative     Private firms could also be                 often work hand in hand to
                    Europe’s Eurovignette or China’s       incentive system to police to         involved in monitoring system.              exploit truck drivers.


                                                                                      Issue 01, June 2008                                                              2
                               logistics


                                                              dhl exel builds new
                                                              facility in lippo cikarang
Photo: dhl exel indonesia




                                                              July 2008 and will be one          inbound and outbound               partner in this multi-user facility.’
                                                              of DHL Exel Supply Chain’s         ordering processes.                    “We have a positive
                                                              largest facilities in Indonesia.       “DHL is committed to           relationship with DHL Exel
                                                                  Rahim Tahir, Managing          improving the services we          Supply Chain and I’m sure
                                                              Director DHL Exel Supply Chain     can offer our customers by         this cooperation will be a
                                      Mr. Rahim tahir         Indonesia says the facility uses   expanding distribution net-        success,” he comments.
                             By KahaR BaSuKi
                                                              environment-friendly features      work and infrastructure in             DHL Exel Supply Chain
                                                              such as skylights to minimize      Indonesia,” he adds.               Indonesia currently has more


                            D
                                    HL Exel Supply Chain,     use of electrical lights during        The company is in              than 15 facilities with over
                                    a logistics services      the day, combined natural          partnership with PT Presisi        100,000 sqm warehouse,
                                    provider, builds a €3     and mechanical ventilation         Rekayasa Persada for the           mostly located in the Jakarta,
                            million multi-user facility in    systems and 40% open space         construction of the facility.      Bogor, TAngerang, Bekasi
                            the Delta Silicon II Industrial   for greenery and better water          PT Ericsson Indonesia will     (Jabotabek) area.
                            Estate in Lippo Cikarang,         absorption.                        be one of the major tenants.           DHL Exel Supply Chain
                            Bekasi.                               The site will also be              Priyo Wiratno, President/      started operations in Indo-
                                The facility built on         supported by advanced              Director of PT Presisi Rekayasa    nesia in 2005, after Deutsche
                            32,000-sqm premises is            material handling equipment        Persada said ‘is delighted to be   Post World Net acquired Exel
                            scheduled for operations by       capable of facilitating the        chosen as the developer and        the same year.




                            2                                                       Issue 01, June 2008
“As long time player
Maersk continues
to repositioning in
Indonesian market,”-
Jakob Friis Sorensen
                         profile
                                                                                                                           commerce and bringing the world to
                                                                                                                           local bowl.
                                                                                                                               Jakob Friis Sorensen, President
                                                                                                                           director of Maersk Line Indonesia
                                                                                                                           describes it “a celebration of successful
                                                                                                                           business and commitment” to
                                                                                                                           improving the country’s economy
                                                                                                                           particularly in sea transportation.
                                                                                                                               The liner commenced operation in
                                                                                                                           Indonesia when its ship made maiden
                                                                                                                           call at Tanjung Priok port in the 1920s.
                                                                                                                               Probably not much to say about
                                                                                                                           those early days, but talking about
                                                                                                                           history is equally important as talking
                                                                                                                           about life, growth, and success.
Photo: Maersk line




                                                                                                                               So is the journey of a giant shipping
                                                                                                                           line such as Maersk, history speaks of
                                                                                                                           the seed that one day would grow into
                                                                                                                           a tree of live.
                                                                                                                               It’s been proved at all. Maersk
                                                                                                                           Indonesia has grown into an


                     golden Jubilee
                                                                                                                           organization comprising five business
                                                                                                                           units in seven offices, and has about 700
                                                                                                                           permanent employees.
                                                                                                                               Additionally, as part of coaxing
                     Fifty years ago, Maersk started operation in Indonesia with only                                      out local talents, the company has
                                                                                                                           five Maersk International Shipping
                     seven staff. Today, it has transformed into a solid company with                                      Education (MISE) undergraduates.
                     five business units and about 700 permanent employees in                                                  MICE is an entry level program
                     seven offices nationwide.                                                                             offering local graduates a career in the
                                                                                                                           group’s network.
                      By haRSon Mando                                long years have been a ‘proof of life’ as                 As of now Maersk has designated
                                                                     Maersk has survived –probably- the                    30 Indonesians working in the group’s


                     I
                        f I were there in those early days I would   most treacherous times sailing to and                 overseas offices.
                        have said “Welcome to Indonesia, a           from Indonesian waters.                                   In early days, the carrier started with
                        land filled with milk and honey, an               This year the company celebrates                 conventional cargo vessels loading
                     archipelago of thousand islands.”               its golden anniversary, fifty years of                wooden-crated or loose cargo. It then
                          It’s still worth repeating today. Those    connecting Indonesia to worldwide                     opened its own office in Jakarta in 1958



                       Maersk Indonesia facts
                       n It carries Indonesian products to EU,          South East Asia.                                      established, coping the increased
                         US, Mediterranean, and other global         n	 Offices: Jakarta, Surabaya, Bandung, Medan,           shipping and logistics activities. In 1999,
                         destinations, via transhipment ports in        Panjang, Semarang, Denpasar.                          it joint ventured with Mitsubishi Logistics
                         Singapore and Malaysia,                     n	 Opened first office in 1958, with name Maersk         Cooperation.
                       n Business entities include Maersk               Line Djakarta Branch Ltd                           n	 In 1999, A.P.Moller-Maersk Group
                         Logistics as SCM provider; Damco, a         n	 On Feb.19, 1978, Maersk Manggo, first                 acquired Sea Liner services and its
                         global freight forwarder; Sufmarine, a         container ship calling Tanjung Priok; also first      logistics arm. In 2005, acquired P&O
                         shipping operator specialising in Africa       container shipping line to carry containerized        Nedlloyd. In February 2006, Maersk
                         trade; MCC Transport, one of leading           Sumateran coffee.                                     Indonesia completed integration of both
                         intra Asia feeder service providers in      n	 In 1987, Mercantile Indonesia was                     which is now branded as Maersk Line.


                     2                                                            Issue 01, June 2008
                                                                                                                                                                        profile

                                                                                                                                                 n Profile
                                                                                                                                                 name:
                                                                                                                                                 Jakob Friis Sorensen

                                                                                                                                                 Born:
                                                                                                                                                 Denmark, 1966

                                                                                                                                                 family:
                                                                                                                                                 Married to Eny Syafrida Sorensen, one son.

                                                                                                                                                 assignment:
Photo: indonesia Shipping times




                                                                                                                                                 President Director of Maersk Indonesia,
                                                                                                                                                 since 2006

                                                                                                                                                 Responsibility:
                                                                                                                                                 Oversees container business and related
                                                                                                                                                 activities in Indonesia.

                                  with only seven staff.                             became the first container vessel to call                   Career with the group:
                                      It could be the best momentum,                 Tanjung Priok carrying 185 containers                       20 years, starting at the A.P.Moller Shipping
                                  so to say, as in 1956 the world                    onboard.                                                    School in Denmark
                                  had introduced Containerised                           Though insignificant, Indonesian
                                  Transportation, which substantially                market plays important role in Maersk’s
                                  reduced the cost of goods shipment.                global operation that grows about 9                      Indonesia with the “Best Liner Award”.
                                      In 1956, the cost of loading loose             percent annually from 1980 to 2010.                          It’s an appreciation of the liner’s
                                  cargo onto a conventional ship was $                   Larger export potential from SE                      consistent and reliable mother vessel
                                  5.86 per ton, when container ports can             nations, including Indonesia, with                       connecting LG cargoes to various
                                  load vessels for just under US 16 cents            container volume grew about 8 percent                    global destinations, via Malaysia’s
                                  per ton.                                           from 2004 to 2007, is crucial at the                     transhipment hubs.
                                      “Today, it only costs approximately            backdrop of its throughput success.                          “This award reflects Maersk Line
                                  $0.20 to export a t-shirt or a pair of                 “With increasing exports of locally                  Indonesia’s commitment to the
                                  shoes, from Asia to Europe on the Emma             produced commodity out of Indonesia,                     continuous improvement of customer
                                  Maersk container vessel,” Sorensen                 Maersk Line helps facilitate the                         service delivery,” Sorensen says.
                                  compares.                                          integration of the Indonesian economy                        Maersk Line is particularly strong on
                                      Maerks’ strive to offer cost                   into the global economy,” Sorensen says.                 the Europe bound cargo route.
                                  effective and reliable containerised                   Maersk provides essential links to a                     It plays key role in integrating
                                  transportation has become a key driving            global transport network and facilitates                 Indonesian firms like LG into the
                                  force, enabling nations like Indonesia to          the transfer of shipping industry know-                  global economy through its extensive
                                  reach global markets.                              how to local Indonesian enterprises and                  transport network worldwide.
                                      Its service was later stepped up               staff.                                                       It will continue to reposition itself
                                  following the containerization of Maersk               LG Electronics Indonesia –with 2007                  in Indonesian shipping industry, by
                                  Line operations in 1975.                           export of electronics, and information                   cooperating with local domestic
                                      In February 1978, Maersk Mango                 & communication products grew                            shipping lines. It would also establish
                                  made first visit to Indonesia and                  over 30%- has awarded Maersk Line                        more offices throughout the country.



                                    A.P. Moller-Maersk Group
                                    Subs                  : Maersk Line, Maersk Logistics, MCC Transport, Safmarine, APM Terminals.
                                    Employees             : 110,000 people in around 130 countries.
                                    Areas of activities   : (1)container shipping and related activities (2)tankers, offshore and other shipping activities (3) shipyards and other industrial
                                                            companies (4) oil and gas activities (5) retail activity


                                                                                                    Issue 01, June 2008                                                                          2
                  trade

                industry woes re-export of Chinese textile importing
                                                            soybean
                                                            from Brazil
                                                                                                                          ThE Ministry of Agricul-
                                                                                                                     ture is looking into possibility of
                                                                                                                     importing soybean from Brazil
                                                                                                                     to reduce dependency on the US.
                                                                                                                          Agriculture Minister Anton
                                                                                                                     Apriyantono says the quality
                                                                                                                     of Brazil`s soybean is good and
                                                                                                                     offered at good price also.
                                                                                                                          Apriyantono said Brazil
Photo: anggi




                                                                                                                     has applied a more advanced
                                                                                                                     system of cultivating soybean.
                                                                                                                          It has 21 million hectares
                                                                                                                     to grow soybeans. Each hectare
                By dany aRi PuRnoMo              ted a total $2-3 million.        with US customs to investigate     is able to produce 3 tons, while
                                                      It creates a circumstance   the re-export performed by         each hectare in Indonesia
                   ThE government blames         where Indonesia’s market         Indonesian firms.                  produces only 1.3 tons.
               officials in Karawang, Bali,      overseas is grabbed by other         Indonesian Textile                  “We hope private compa-
               Tangerang and Batam for           countries’ products illegally    Producers Association              nies will take this opportunity,”
               allowing the re-export of         using certificate of Indonesia   confirmed that the certifi-        the minister said, including
               Chinese textile products to       origin, says industry            cates found in transshipment       the Indonesian Cooperatives
               the USA using certificate of      department’s deputy for          cases were original and            Council (Dekopin) and Rajawali
               origin issued by Indonesian       metal, machine and textile       issued by trade department         Nusantara Indonesia (RNI).
               government.                       Ansari Bukhari.                  to 14 provinces nationwide.             On the long run, Indonesia
                   Re-export is an illegal            The government and              Authority unveils 8 of         will have to cultivate soybeans
               practice that has incurred        textile industry have asked      33 export companies are            at home to cut off imports.
               losses to domestic industry.      for legal process on such        fake,-investigators could not           Indonesia needs 1.7 mil-
               The transaction has aggrega-      transaction, and cooperate       locate their offices.              lion tons of soybeans annually,
                                                                                                                     while the farmers could only

                iran and indonesia trebling trade deal                                                              produce about 600,000-
                                                                                                                     700,000 tons.
                                                                                                                          To meet domestic demand,
                   iraN moves to win             million in 2006.                 around 150,000 to 180,000          Indonesia imports 1.2 million
               one per cent of Indonesia’s            Iran and Indonesia have     barrels of oil per day, equal to   tons of soybean annually, 90
               annual international trade        inked two projects. First        12-14 percent of Indonesia’s       percent is import from the USA.
               value. Iranian ambassador to      is a $6 billion refinery in      total oil demand, the report            Brazil has proposed to
               Jakarta Behrooz Kamalvandi        Banten and the second is the     added.                             accelerate bilateral trade with
               said Iran was on its way to       construction of a fertilizer         Some of the fuel               Indonesia to achieve 3 per cent
               achieving the target.             factory (Hengam project) in      produced from the refinery         of global trade, from currently
                   Currently, the trade value    southern Iran, with a total      will be exported to Iran with      below 1 per cent.
               between both countries            investment of $700 million.      the value of about $2 billion           As of today, Brazil’s export
               stands at around $500                  Indonesia and Iran will     annually.                          to Indonesia is only 0.43 per
               million, but “still a quarter     each finance 40 percent of           Iran will export about 1       cent of its total export and
               from our target,” The Jakarta     the refinery project and the     million tons of fertilizer to      imports from Indonesia only
               Post reported.                    remainder 20 percent will        Indonesia.                         0.65 per cent of total import.
                   Last year’s trade relations   come from Malaysia.                  Indonesia and Iran are              Indonesia’s export to Brazil
               between the two nations                For the refinery project    looking into possibility of        is about 0.69 per cent of total
               totaled $553.1 million, up        scheduled for completion         exploring other potential          export.
               37 per cent from the $404.4       in 2012, Iran will provide       sectors.

               0                                                      Issue 01, June 2008
                                                                                                                                                   trade

                                   furniture sees brighter end, despite strong rivalry fresh tuna
                                                                                        back on
                                                                                                      in a number of countries
                                                                                                      to provide facilities for

                                                                                        bowl again    promotional activities.
                                                                                                           The minister has also
                                                                                                      asked furniture exporters
                                                                                                      to expand to East Europe,                iNDONESia’S
                                                                                                      Central Asia, and Colombia,         fresh tuna export
Photo: indonesia Shipping times




                                                                                                      following the US downturn.          to Europe, Japan
                                                                                                           U.S. has been the main         and USA, though
                                                                                                      destination for furniture export    indicating growth,
                                                                                                      with 29 percent market share,
                                                                                                                                          but more work to
                                                                                                      followed by Germany (7.5%),
                                                                                                      England (7.24%), French (6.7%),     meet the standards
                                                                                                      and Japan (5.3%).                   set by EU’s Rapid Alert
                                                                                                           However, current               System for Food and
                                   By dany aRi PuRnoMo              and handicraft products are       economic downturn has cut           Feed, RASFF.
                                                                    known in Europe, US, Asia         the consumption, including              Fish export was
                                      iNDONESia’S furniture         and Africa.                       the demands for products
                                                                                                                                          banned in 2005 by
                                  industry is on track to               Asmindo will particularly     from Indonesia.
                                                                    invent products that are typi-         Asmindo will intensify         RASFF after discover
                                  achieving $3 billion earning
                                  from exports this year,           cally expressing Indonesian       penetration to the new mar-         it contaminated with
                                  despite stiffer competition       styles and ethnic designs.        ket in the other countries.         histamine.
                                  with similar products from            “These have proved to be           Trade Minister reported            Six tuna exporters
                                  other countries.                  of interest of foreign buyers,”   that furniture and craft            were rejected to
                                      Ambar Tjahyono the            he said                           export in 2007 was worth
                                                                                                                                          European Union in
                                  chairman of Indonesian                At the Shenzhen Interna-      $2.01 billion, increasing by
                                                                    tional Furniture Exhibition       8.8 percent from $1.7 billion       2004 and in 2005 there
                                  Furniture and Handicraft
                                  Industries’ Association (Asmin-   in March, the Chinese public      in 2006.                            was still a threat of
                                  do) said the export target for    showed great interest                  A spokesperson for             embargo.
                                  2008 was higher compared to       Indonesia’s furniture and         National Export Develop-                But after the RASFF
                                  $2.8 billion last year.           handicraft products.              ment Board (BPEN) said              concluded that the
                                      To boost the country’s            Trade Minister Mari Elka      that the US economic crisis
                                                                                                                                          products are safe
                                  furniture and handicraft          Pangestu said the government      would effect not only export
                                                                    would continue support to         to US, but also to England,         -containing lower
                                  exports, the association
                                  would participate actively        exporters, including furniture    Germany, France, and Japan.         histamine- the export
                                  in a number of international      and handicraft exports.                Exporters will have to look    volume steps up.
                                  trade exhibitions, such as            She said her ministry         for alternative markets such            As of now, 80%
                                  recently in Shenzen, China.       will continue cooperation         as East Europe, Central Asia,       of Indonesia’s tuna
                                      Indonesian furniture          with diplomatic missions          Colombia, China and India.
                                                                                                                                          exporters are under
                                                                                                                                          grade A and B, but
                                   indonesia-timor leste boost bilateral trade                                                           they will propose for
                                      iNDONESia and                 of 7.3 per cent annually.              Weakened demands and           approval code number
                                  neighboring Timor Leste               Indonesia’s export to         purchase ability of Timor           soon.
                                  will bolster bilateral trade,     Timor Leste among other           Leste have played significant           About 33 exporters
                                  following decreased trend         includes household ap-            role in slowing down the            are in quality A
                                  of goods flow to the newly        pliances, electronics, food       flow of commodities.                category, while 250
                                  established country.              and beverages and cons-                The country has also not
                                                                                                                                          fish producers fail to
                                      As of now 75% of Timor        truction materials. On other      been a favorite investment
                                  Leste’s imports are from          hand Timor Leste’s export         destination due to lack of infra-   comply with the RASFF
                                  Indonesia, but data shows         to Indonesia includes coffee      structure and uncertain regu-       standard.
                                  lately that there is decrease     and plywood.                      lation on trade and investment.

                                                                                           Issue 01, June 2008                                                      1
    finance


shipping bourse plunges,
but still prospective
20                                                                                                    coal for several national power plants,
                                                                                                        including long term contract to Tanjung
                                                                                                        Jati B, has made Arpeni’s shares more
                                                                                                        prospective.
20                                                                                                         It will also maintain investors’
                                                                                                        interest in Arpeni stocks at IDX.
                                                                                                             Compared to Arpeni’s, BLT share is
                                                                                                        much better.
20                                                                                                         The US crisis has not affected much
                                                                                                        on the company’s transactions. Though
                                                                                                        the stocks price has plunged, but many
                                                                                                        investors are attracted to buy BLT
                                                                                                        shares.
210 1/1               1/2       2/        2/1       2/2        /   /1     /2     /2    /1
                                                                                                             The fall was due to the market
indonesia Stock exchange last 60 days/composite index. Source: idX                                      sentiment only, comments BLT
                                                                                                        Finance General Manager Krisnanto
                                                                                                        Tedjaprawira.
The US credit crunch has severely hit some stocks at the Indonesia                                           He even assures that the company’s
Stocks Exchange (IDX), including of shipping companies. The                                             financial statement would be better this
phenomenon probably will last up to, at least, June this year.                                          year.
                                                                                                             He adds that the skyrocketing
Mohamad Rasul reports.                                                                                  price of both oil and crude palm oil
                                                                                                        (CPO) would potentially make the


I
    ndonesia’s shipping lines listed at                     compared to banking and construction        oil transportation business more
    IDX are Berlian Laju Tanker (BLT),                      sectors.                                    promising.
    Arpeni Pratama Ocean Lines (Arpeni),                         An analyst with the NISP Sekuritas          The demand for crude oil will also
Samudera Indonesia, Tempuran Emas                           Arief Budiman affirmed that Arpeni          increase, thanks to the increasing
(Temas Line), and Humpus Intermoda                          stocks are more fluctuated due to           demand from China and India.
Transportasi.                                               negative sentiment in the market.                In 2008, BLT procures 10 new
     “The index of IDX depends much on                           “Arpeni’s stocks are less liquid,      tankers, including 7 chemical tankers
the stocks flux in the US,” discloses Felix                 meaning that there is less daily transac-   and 3 ethylene tankers. Three have been
Sindhunata, Head of Equity Research PT                      tion. It can drastically drop when the      delivered.
Mega Capital Indonesia to Indonesian                        market is on a negative sentiment,” he           Foreign investors own around
Shipping Times.                                             says.                                       15% of BLT shares, but it does not
     The credit crunch in US, he says, has                       However, in his March report,          automatically trigger global market
significantly affected the global stocks                    Budiman still recommended Rp520             negative sentiment.
exchange, including Indonesia’s. Almost                     per share. But in the next 52 weeks,             “Even, higher interest of foreign
all stocks at IDX are volatile, subject to                  the price of Arpeni’s shares would          investors proves that the stocks are
abrupt change.                                              range between Rp450-Rp860 per               prospective,” Sindhunata argues.
     IDX data shows that Arpeni shares                      share.                                           However, BLT’s main problem is high
decreased from Rp600 on February 18                              In 2007, Arpeni booked Rp429           debt ratio, which can be adjusted with
to Rp 490 per share on April 17, while                      billion operating profit, a 36% increase    the stocks market.
BLT stocks dropped from Rp 2,425 to Rp                      from Rp314 billion in previous year.             Analysts are optimistic that BLT
2,030.                                                           Arpeni holds around 24% of             shares are prospective in a long run. Its
     Felix has notes that despite the crisis                domestic coal shipment, about half of       financial statement was quite stable,
severely hit the bourse of transport                        total national coal carrier capacity.       and the ability to pay its short-term loan
companies the risk is relatively small                           The company contracts to transport     will reduce its debt ratio.

2                                                                     Issue 01, June 2008
finance
                        solutions


                      Beefing up export
                      quality with fumigation
                                                                                              I
                      Along the line of increasing volume of export from Indonesia to            n principle, irreversibility of
                      various destinations worldwide there is also question of quality. The      commercial globalization has torn
                                                                                                 off the barriers that were dividing
                      borderless trade now speaks common language, quality of goods;
                                                                                              nations, forcing industries to spinning
                      Harson Mando stresses that fumigation will keep the business sigh.      off so quickly or self aligning, - so to say.
                                                                                                  Putting Indonesian companies
                                                                                              into wider perspective, who is
                                                                                              going to protect them in this era,
                                                                                              the government or the exporters
                                                                                              themselves?
                                                                                                  “Exporters will have to create
                                                                                              protection mechanism,” comments
                                                                                              Windi Hartono, head of fumigation
                                                                                              division PT Jessindotama Lintas Bahari.
                                                                                                  What defends Indonesia’s export
                                                                                              products is how they are processed
                                                                                              according to applied international
                                                                                              standards. Quality is the shield.
                                                                                                  Hartono says foreign partners will
                                                                                              play on the level of technical matters
                                                                                              when it comes to quality of products.
                                                                                                  Significant growth of export in the
                                                                                              last two years must be followed with
                                                                                              measured steps such as fumigation.
                                                                                                  He said the quality of fumigation
                                                                                              service will also determine the quality
                                                                                              of export products, particularly
                                                                                              agricultural products.
                                                                                                  Fumigation will prevent goods
                                                                                              from insects and diseases hazardous
                                                                                              to customers. Normally advanced
                                                                                              nations have quality control system that
                                                                                              monitors all import goods.

                                                                                              Exporters lack awareness
                                                                                                  The challenge is that exporters
                                                                                              should be conscientized on the
                                                                                              significance of fumigation as part
                                                                                              of improving the quality of their
                                                                                              products.
Photo: Jessindotama




                                                                                                  There were cases when Indonesia’s
                                                                                              banana and other agricultural
                                                                                              products were rejected in Japan,
                                                                                              after inspectors discovered they were
                                                                                              contaminated.
                                                                                                  “We don’t want this happen again,

                                                                 Issue 01, June 2008
                                                                                                                                                              solutions

                                                                                                                                                     “Exporters will benefit from services
                                                                                                                                                 that Jessiondotama offers, ensuring
                                                                                                                                                 exports flow smoothly,” Hartono says.
                                                                                                                                                     Standardized fumigation will
                                                                                                                                                 ensure that the commodities will not
                                                                                                                                                 be rejected. It also protects exporters
                                                                                                                                                 from paying extra charges such as for
                                                                                                                                                 holding order, and re-fumigation or re-
                                                                                                                                                 treatment.
                                                                                                                                                     If we follow internationally applied
                                                                                                                                                 procedures, the inspection on our
                                                                                                                                                 goods in destined countries will be
                                                                                                                                                 accelerated, -there will be no price
Photo: Jessindotama




                                                                                                                                                 remission for Indonesian export
                                                                                                                                                 products, he elaborates.
                                                                                                                                                     For more information about
                                                                                                                                                 Jessindotama’s profile and services see
                                                                                                                                                 www.fumigasi.com.


                      just because of ignorance on the                                                 international standards.
                      importance of fumigation,” Hartono                                                   Below standard fumigation services
                                                                                                                                                   n Profile
                      states.                                                                          will result in low quality of goods,            name :
                          “Yet many exporters still don’t care                                         and it will be surely hazardous to the          Windi Hartono
                      about quality. I get the impression                                              health of people or animals in foreign
                      that as long as their goods are needed,                                          destinations.                                   Current Post :
                      quality comes in second.”                                                            “If contaminated the goods from             Head of Fumigation Division
                          Choice of fumigation service is                                              Indonesia will be rejected. They will
                      also a serious matter in order that all                                          surely look for the products from other         achievement :
                      fumigation process is done according                                             countries,” he concerns.                        Leading to ISO 9001:2000 (QEC 24764)
                                                                                                                                                       February 2008
                                                                                                       Jessindotama highlights quality
                        Fumigation…                                                                         Of 96 fumigation firms nationwide,
                                                                                                       PT Jessindotama Lintas Bahari is the
                                                                                                                                                       Company :
                                                                                                                                                       PT Jessindotama Lintas Bahari
                                                                                                       first company that has been certified
                              Roughly speaking, is special
                                                                                                       ISO 9001:2000 for quality                       line of business :
                         treatment against insects/diseases on                                         management in February                             International fumigation, pest and
                         certain goods, by use of fumigant in                                          2008.                                                termite control
                         close-meshed containers with certain                                               Its services have been
                         temperature and pressure.                                                     in accordance with                                   establish :
                                                                                                       government standards                                 July 6, 2001
                              Types of fumigant: Ethylene Oxide
                                                                                                       and worldwide
                         (ETO), Phosphine (PH3), Sulphuryl
                                                                                                       practices.
                         Fluoride (SO2F2), and Methyl Bromide
                         (CH3BR).
                              Most effective: Methyl Bromide,
                         used worldwide, but producing certain
                         chemical that could deplete ozone
                                                                     Photo: indonesia Shipping times




                         layers. Indonesia’s trade department
                         has limited the use of Methyl Bromide
                         only for quarantine and pre-shipment
                         purposes, and performed only by certified
                         companies.


                                                                                                                  Issue 01, June 2008                                                          
                          round up

                       n china

                       the first China-made 10,000-teu ship
Photo: Cosco




                                                                                              Photo: Cosco
                           ThE Cosco Oceania, the          container vessel, with a total                    long, 45.6 metres abeam and            The delivery of Cosco
                       largest container vessel ever       capacity of 10,062-TEU, was                       27.2 metres high. It is not only   Oceania also made China the
                       made in China, was recently         part of Coscon’s order to                         the first 10,000 TEU vessel        third country in the world
                       delivered to Coscon in              Nantong Cosco KHI Shipyard.                       built in China, but the first      following South Korea and
                       Nantong, Jiangsu province.             The 118,000-ton (dwt)                          10,000-TEU vessel owned by a       Denmark to have the capacity
                           The super-jumbo                 Cosco Oceania is 348.5 metres                     Chinese shipping company.          to build a 10,000 TEU vessel.

                       Shanghai expects to overtake Singapore
                           ShaNghai is hoping              move to be an international                       8,000 by April 2008.               in December 2005 and the
                       to overtake Singapore to            shipping centre.                                      Yangshan port, the main        second phase in December
                       become the world’s busiest              Yangshan port handled                         work of Shanghai International     2006.
                       container port in 2008,             the first vessel in December                      Shipping Centre, is becoming           Shanghai surpassed
                       following the expansion of          2005 and by May 2006 there                        busier and busier and its hub      Hong Kong to be the world’s
                       business at Yangshan port.          were 1,000 calls at Yangshan.                     port position is sticking out.     second largest container
                           Yangshan port plays             The number jumped to 5,000                            The first phase project of     port in 2007 by handling 26
                       crucial role in Shanghai’s          by September 2007 and to                          Yangshan was inaugurated           million TEU.


                       transport and logistics fair 2008
                                                                                                             transport sector. It handles           Key players present their
                                                                                                             the largest volume of freight      products, and experts from
                                                                                                             in the world.                      industrial-manufacturing and
                                                                                                                 The trade fair’s exhibits      transportation sectors will
                                                                                                             range from logistics, tele-        bring a wealth of experience
                                                                                                             matics, and e-commerce             on the latest industry topics.
                                                                                                             to in-house transport and              Apart from focusing on
Photo: Shanghai Port




                                                                                                             material-flow solutions, freight   products, technologies and
                                                                                                             transport and related services.    services, they will also focus
                                                                                                                 “Now the Chinese market        on the decision-makers
                                                                                                             and those in the neighboring       themselves.
                                                                                                             regions can benefit from               “Thus the trade fair
                             ThE international trade       International Expo Center                         this concept and the               mirrors the potential for
                       fair for transport, logistics and   (SNIEC) from 17 to 19 June 2008.                  presentation of the entire         new forms of cooperation,
                       telematics in Asia will take            China has an enormous                         value-added chain in the           allowing partners to initiate
                       place at China’s Shanghai New       demand in the logistics and                       sector,” a statement says.         and transact new business.”

                                                                                Issue 01, June 2008
                                                                                                                         round up

n hong Kong
government insists 10th terminal by 2015
    ThE government of Hong                                                            handling facilities.             17 million TEUs from ocean
Kong insists the plan to build                                                            The Hong Kong                vessels last year, below its
the 10th container terminal                                                           Container Terminal Operators     maximum capacity of 25 to
after the loss of cargo to                                                            Association critized the plan    27 million TEUs.
China’s Shenzhen.                                                                     saying ‘ to increase supply          Port operators and
    But Hong Kong’s five                                                              before there was demand to       shipping lines have been
                                     Photo: hit




terminal operators are                                                                absorb it.’ New terminal is      blamed for shrinking Hong
opposing the plan.                                                                    not needed at this time, they    Kong’s competitiveness in
    They are Modern                               Cosco-HIT, DP World and             said.                            port cargo transport because
Terminals, Hong Kong                              Asia Container Terminals                The 24 berths in Kwai        they charge $100 per box
International Terminals (HIT),                    that run the nine container         Chung terminal handled only      higher than those in China.


ooil handled 1.16 million teu in first quarter
     OriENT Overseas                              period last year.                   Intra-Asia/Australasia trades         The transatlantic trade
(International) Ltd (OOIL)                            The group’s container           was also high, growing 34.3%     generated revenues of
reported 11.7 percent                             shipping arm, OOCL, booked          at $378.23 million, after        $168.95 million, up 19.1%
increase or 1.16 million TEU                      highest revenue gain on the         carrying 538,036 TEU or up       yoy, while the volume of
in global shipping during the                     Asia/Europe trade routes,           16.1% yoy.                       boxes transported increased
first quarter of 2008.                            generating US$343.5 million,            The group also booked        by 11.5% to 99,713 TEU.
     Its revenue also increased                   increasing 39.9% compared           $496.6 million, increasing            Over 2007 result, OOCL
by 27.9% to US$1.39 billion.                      to similar period last year.        19.6% from the transpacific      booked revenue of $5.15
     Average revenue per                              It recorded container           trade following a 12.4%          billion, up 21.1% compared
TEU increased by 14.5%                            volume at 191,904 TEU.              increase in volumes carried      to 2006 after transporting
compared with the same                                The revenue gain on the         to reach 329,496 TEU.            4.60 million TEU, up 18.2%.


  n india
  india to invest $25 billion on shipping and ports
       iNDia’S shipping                               The amount will be required         While the capacity of non-        Sharma says a subs-
  secretary APVN Sharma says                      over half for ports and for ship-   major ports run by govern-       tantial improvement in
  the country will double the                     ping and inland waterways.          ments will be increased to       cargo-handling capacity
  cargo handling capacity of                          The capacity of the major       500 million tons. The country    is crucial to sustain high
  its ports to 1.5 billion tons by                ports under the control of          will increase investment         growth in exports and
  investing about $25 billion                     the Ministry of Shipping will       through public-private-          imports as traffic in ports
  until 2015.                                     be increased to 1,000M tons.        partnership agreements.          has been going up rapidly.


Container traffic at major ports rises 19 percent
    ThE container traffic at                      TEU in previous year.               handled 1.51 million TEU,        Paradip, Vizag, Ennore, Chennai,
India’s 12 major state-run                            Jawaharlal Nehru (JN)           while the terminal jointly       Tuticorin, Kochi, Mangalore,
ports registered a 19 percent,                    Port in Mumbai handled              managed by APM Terminals         Mormugao and Kandla.
driven by strong demands                          4.06 million TEU, increasing        and Concor handled 1.29              Experts predict that India’s
for raw materials and the                         23 percent and accounting           million TEU. The third           container traffic will rise 19
export of finished goods.                         for over 61 percent of the          terminal operated by the         percent annually to reach 21
    In the 12 months ending                       total volume of containers          government-owned port            million TEU by 2016, up from
March 2008, the 12 ports                          handled by all 12 ports.            handled 1.26 million TEU.        about 7 million TEU at present.
handled 6.60 million TEU,                             JN’s container terminal             The other 11 ports are       In comparison, Chinese ports
increasing from 5.44 million                      operated by DP World                located at Mumbai, Kolkata,      handle 100 million TEU a year.

                                                                          Issue 01, June 2008                                                      
                          round up

                       age of vessels not more than 25 years
                           ThE Indian government          but would be brought under            Of the 29 vessels lost in      27% of the entire fleet 20 or
                       will limit the age of vessels      the purview of the proposed       the last three years, 18 were      more years old.
                       plying in domestic waters          guidelines later.                 25-year old. In case of 15             Indian shipping industry
                       not more than 25 year, to               The increasing number        vessels, machinery break-          has been on a high in the
                       ensure maritime safety             of older vessels plying in        down was the main reason           last few years. It is estimated
                       standards in line with global      Indian coastal waters is          for the loss.                      about 1,000 foreign flag
                       regulations.                       partly a result of the increase       Almost 95% of these            vessels transit Indian waters
                           Offshore vessels of over       in freight rate. In this case,    cases involved vessels more        every day and close to 12,000
                       25 years would be restricted       plying of older vessels is        than 25-year old.                  vessels call at Indian ports
                       to sail in Indian seas. Older      economically feasible.                The average age of Indian      annually.
                       cargo vessels engaged on                It is also partly a result   fleet is 18 years with 50.3% of        The government will oblige
                       charter will be barred during      of the tightening up by           the fleet having an average        offshore vessels older than 20
                       monsoon months.                    the developed maritime            age of over 20 years.              years to undergo mandatory
                           Gas carriers and dredgers      countries of their regulations        The world average fleet        inspection by the Indian
                       would be initially exempted,       for safety reasons.               age is about 12 years, with        Registrar of Shipping (IRS).


                         n Korea
                         new technology cuts yard’s shipbuilding time
                             hyuNDai Heavy                    The technology is now             HHT says time-                 percent.
                         Technology is using a new        deployed at HHT’s third dock      consuming removal and                   Expansion of the new
                         technology that minimizes        at Ulsan shipyard which has       installation of facilities         technology is planned with
                         preparatory dock work in         constructed seven 10,000-         and equipment means                its use at its 10th dock to
                         shipyards.                       TEU ships.                        dock time will decrease 20         be complete this October.


                       Seaspan orders two 13,000-teu ships from hhi
                           SEaSPaN Corp says                  The two vessels are part         The credit facility is          $2.2 billion of debt to support
                       it has secured a loan for          of eight ships ordered from       underwritten by Sumitomo           its expansion plans, and has
                       US$235.3 million to finance        the South Korean shipyard,        Mitsui Banking Corp. at a          $550 million in immediate
                       the purchase of two 13,100-        to be delivered in 2011 and       weighted average rate of 0.7       liquidity to capitalize on the
                       TEU vessels ordered from           later chartered to COSCO          per cent over LIBOR.               company’s future acquisition
                       Hyundai Heavy Industries.          Container Lines.                     Seapan has generated            opportunities.

                       n Malaysia
                       northport posts 17pc increase in first quarter
                                                          million TEU, increasing 7.5       confidence in its services.        Thailand and the Indian sub-
                                                          percent 2006.                         Several key shipping lines     continent boost its growth.
                                                              “The growth rate exceeded     have added new services and             Northport is transforming
Photo: northport Bhd




                                                          our expectation based on our      deployed bigger ships to the       its 370-metre Berth 8A and
                                                          key performance indicator of      port. It received 14 new major     will deploy three super post
                                                          5 percent growth,” deputy CEO     services last year of major        panamax cranes to handle
                                                          Haris Abdul Aziz told The Star.   mainliners and feeder operators.   the mega container ships
                            NOrThPOrT Bhd, one of             Northport recorded an 11          Fast growing intra-Asian       with capacity of 12,000 TEUs
                       the two operators in Port Klang,   percent increase in revenue       trades connecting Northport        to 13,000 TEUs.
                       posted a 17 percent increase in    in Q1 to RM165million.            with several ports in the               The cranes are capable of lif-
                       first quarter (Q1) this year.      Such high growth reflects         region, including those in         ting two 40-ft containers or four
                            Last year, it handled 2.86    Northport’s customers’ strong     Vietnam, China, Indonesia,         20-ft containers in one move.

                                                                               Issue 01, June 2008
                                                                                                                                round up

             tanjung Pelepas and MiSC ink Jv deal
                                             joint venture company that       to use PTP as its hub in the                    transshipment operations,”
                                             will serve MISC and other        region, after Maersk and                        MISC was cited as saying
                                             shipping lines calling at the    Evergreen moved to PTP in                       in a statement from PTP
                                             port.                            2000 and 2002 respectively.                     authorities.
                                                 In the JV PTP will hold           “Besides being within                          Last year, PTP recorded
Photo: PtP




                                             70% stake and the Malaysian      Iskandar Malaysia which                         5.5 million TEUs, increasing
                                             container shipping line          promises a growing                              14% from 4.8 million TEUs in
                                             holding the 30 per cent.         hinterland cargo, PTP is also                   2006. It offers 10 berths of
                 POrT of Tanjung                 MISC said that the deal      strategically located at the                    360 meters each, totaling 3.6
             Pelepas (PTP) and MISC          would benefit the shipping       confluence of the world’s                       kilometers in length, with an
             Berhad recently signed an       company greatly as it makes      shipping lanes, and this                        annual handling capacity of
             agreement to establish a        MISC the third major carrier     is a crucial factor for our                     8 million TEU.

             n philippines
             Subic Bay international terminal served first vessel
                 SubiC Bay International     terminal constructed by          developer of international
             Terminal Corp. (SBITC)          SBMA in cooperation              ports and terminals with
             recently serviced its first     with the Japan Bank of           a global port network
             vessel at the newly opened      International Cooperation,       spanning 11 countries in four
             New Container Terminal-1        is envisioned to become          continents.
             (NCT-1) at the Subic Bay        a major maritime hub in              Headquartered in the
             Freeport.                       Southeast Asia.                  Philippines, ICTSI is on its
                APL’s 1,200-TEU vessel           Subic Bay International      20th year of operation,
             Eagle Excellence arrived at     Terminal Corp. (SBITC) is a      and continues to pursue

                                                                                                               Photo: iCtSi
             the NCT-1 from Kaoshiung        subsidiary of International      container terminal
             port, Taiwan.                   Container Terminal Services,     opportunities around the
                NCT-1, a new container       Inc. (ICTSI), a leading          world.


             voluntary arbitration in maritime labor disputes agreed
                 ThE Department of           maritime labor disputes.             MILA would ensure the                       policies, programs, standards,
             Labor and Employment               Marianito Roque, acting       rights and welfare of Filipino                  qualifications, and manuals
             (DoLE), manning agencies,       DoLE secretary said an MoU       seafarers and address the                       of procedures pertaining to
             and Filipino seafarers agreed   has been signed for the          concerns of stakeholders in                     MILA operations.
             to establish a voluntary        creation of the Maritime         the maritime industry.                              They will screen, accredit,
             arbitration system, as          Industry Labor Arbitration           The council and the                         admit, and train voluntary
             an alternative in settling      Council (MILA).                  secretariat will formulate                      arbitrators.


               n singapore
               Q1 result: Singapore handles 7.12m teu, hK 5.3m teu
                   ThE Port of Singapore     the same period last year.       of 12 per cent over the 1.8                         Hong Kong’s first
               Authority (PSA) reported         Meanwhile, Hong               million handled in March last                   quarter 2008 results have
               a first quarter increase      Kong Marine Department           year, a 24.9 per cent increase                  increased 7.4 percent to
               of 12.1 percent to 7.12       revealed that Hong Kong          month to month against the                      5.7 million TEUs from 5.3
               million TEU increasing        port handled 2.04 million        1.6 million TEU moved in                        million TEUs it recorded in
               from 6.36 million TEU in      TEU in March, an increase        February.                                       the first quarter of 2007.


                                                                   Issue 01, June 2008                                                                      
               round up

             nol’s new appointments in the Middle east
                                            key appointments indicate         headquarters in Dubai.           Logistics, is responsible for
                                            the growing status of the             He was most recently         container shipping, terminals
                                            Middle East. They will help       vice president of APL            and logistics activities, and
                                            to capitalize on the many         Logistics for Asia, Middle       the development of logistics
                                            growth opportunities in the       East and South Asia. He          activities across the Middle
Photo: nol




                                            region.                           was also the managing            East.
                                                Gene Seroka, the new          director for APL Indonesia            Ajit Jangle, the managing
                                            VP for the Middle East, is        and APL’s director of Sales      director for Saudi Arabia and
                 SiNgaPOrE’S Neptune        responsible for the overall       and Marketing for North          Bahrain, oversees container
             Orient Line (NOL) has made     management of NOL’s               China.                           shipping and logistics
             some key appointments in       APL, APL Terminals and                Komol Roongruangyot,         activities, and is responsible
             the Middle East.               APL Logistics businesses          the managing director for        for building the company’s
                The group’s CEO             throughout the Middle East        the United Arab Emirates         terminal business in these
             Thomas Held said these         from the group’s regional         and head of Middle East          markets.


             PSa Singapore to buy 79 Rtgs from S Korea
                 PSa Singapore Terminals        They are also the first           “PSA Singapore               Singapore Terminals,
             (PSA) has awarded $117.8       batch of RTGs that will be        Terminals sees steady                PSA Singapore Terminals
             million contract for 79 RTGs   delivered equipped with           growth of 12.1 per cent          links shippers to a network
             to South Korea’s Doosan        energy-saving devices to          in the first quarter of          of 200 shipping lines with
             Heavy Industries and           help reduce fuel usage.           2008, year-on-year. We           connections to 600 ports in
             Construction.                      Kyung-Ho Park, executive      will continue to invest in       123 countries. In 2007, PSA
                 The RTGs will be           vice-president of Doosan          world-class port facilities      Singapore Terminals handled
             deployed at PSA’s new berths   Heavy Industries and              and equipment to ensure          27.1 million TEU, and its
             at Pasir Panjang Terminal      Construction said the RTGs        that we retain our value as      Multi-Purpose Terminals
             (PPT) in Singapore to cater    have been customized              an attractive hub port of        moved 18 million tons of
             to growing volumes from        to PSA’s specifications,          choice to the shipping lines,”   break-bulk and specialized
             shipping line customers        including fuel consumption        said Kuah Boon Wee, PSA          cargo and over one million
             calling at PSA.                conservation                      CEO for Southeast Asia and       vehicles.


               Maersk logistics appoints new asia–Pacific Manager
                   MaErSk Logistics, the    Group, has appointed Tony             Based in Singapore, Tony     driving strategies, ser-
               Forwarding and Global        Hotine as the new Regional        is responsible for all aspects   vice delivery, process
               Supply Chain division of     Manager for Maersk Logistics      of the logistics business,       excellence and product
               the A.P. Moller – Maersk     Asia–Pacific.                     with particular focus on         development.


             aPl expands asia-australia service
                  aPl adds two new loops    China to Australian ports.        growth between North Asia            APL, HMM and Hapag
             to its Asia and Australia          The two loops are jointly     and Australia.                   Lloyd deploy two ships each,
             services from May 2008.        managed by APL with                   The port rotation for CAN    while Hamburg Sud will
                  The northbound China      Hamburg Sud, Hapag Lloyd          covers Yokohoma, Osaka,          deploy three vessels, with size
             Australia North (CAN) offers   and Hyundai Merchant              Pusan, Qingdao, Shanghai,        of 2,300 TEU to 2,800 TEU.
             direct link from Japan,        Marine (HMM).                     Ningbo, Melbourne, Sydney,           The new services
             Korea and central China to         Jason Wong, APL’s vice        Brisbane and Yokohama.           complement the existing
             Australia.                     president for Intra-Asia, said        While CAS covers             APL network and provide
                  The southbound China      the launch of these two           Kaohsiung, Yantian, Hong         connectivity to major trade
             Australia South (CAS) offers   services helps the company        Kong, Melbourne, Sydney,         lanes via the key relay hubs of
             direct service from South      capitalize on robust trade        Brisbane and Kaohsiung.          Hong Kong and Kaohsiung.

             0                                                    Issue 01, June 2008
                                                                                                                           round up

                   n taiwan
                   two port officials jailed for faking annual report
                       TwO officials from Port         They allegedly received              Authorities have             bureau director Hsieh Ming-
                   of Kaohsiung in Taiwan have     US$62 million (NT$2 billion)         searched the offices of port     hui was also questioned, but
                   been jailed for allegedly       in bonuses, incentives and           and shipping companies,          released.
                   faking the port’s 2007          tax exemptions for reaching          seizing computers and five           Authorities first became
                   container throughput in         Kaohsiung Port’s 10 million          boxes of documents.              suspicious about the
                   a bid to reach a lucrative      TEU target set for last year.            Prosecutors have yet to      container volume in October
                   government target.                  Prosecutors ordered two          determine how much money         and prosecutors were tipped
                       Prosecutors originally      officials jailed after questioning   they may have received           off that the numbers were
                   sought to detain five people,   more than 50 workers at              through the fake annual          faked in January.
                   two staff from Kaohsiung        Kaohsiung Port and shipping          TEU report and will continue         Kaohsiung box volume
                   Port, two from Yangming         companies in connection with         investigation and raids.         reached 10.2 million TEU last
                   Marine and one from APL.        a statistics scam.                        Kaohsiung Harbour           year, up 4.93 percent.

                   evergreen named best intra-asia shipping line
                                                       The honor was announ-            replace ships now provided       Mexican west coast, a port
                                                   ced on the 22nd Annual Asian         by its old partner Cosco         viewed as an end run to
                                                   Freight and Supply Chain Awards      Container Lines to continue      beat possible LA-Long Beach
                                                   (AFSCA) held in Singapore.           its weekly Far East Mexico       congestion.
                                                       Evergreen was also               Panama service on its own.           The new rotation will
                                                   named the Best Shipping                  Before Cosco quits its old   be: Kaohsiung, Hong Kong,
Photo: evergreen




                                                   Line-Asia/Europe at the              joint service arrangement        Shanghai, Ningbo, Lazaro
                                                   event and was chosen by              on May 25, Evergreen             Cardenas, Cristobal and
                                                   readers’ survey from 13,000          has commenced talks              back to Kaohsiung.
                                                   readers of the fortnightly           with carriers over slot              The service will have a
                                                   magazine Cargonews Asia.             charters, said a company         round voyage of 55 days,
                       EvErgrEEN Marine                                                 spokeswoman.                     requiring eight ships for a
                   Corp. said it had been named    retains asia Mexico                      The revamped service         weekly frequency although
                   the Best Shipping Line-Intra    Panama service                       will call at the new port of     the current sailing schedule
                   Asia for the fourth year.           Evergreen Line will              Lazaro Cardenas, on the          only lists seven vessels.


                     n vietnaM
                     vietnam focusing on maritime industry
                         iN order to speed         management.                          north, centre and south.         Seaport in the city of Hai
                     up the development                With the long-term                   It will also develop Van     Phong; the Lien Chieu
                     of Vietnam’s maritime         goal to reform the marine            Phong International Seaport      Seaport in the central city
                     industry, the Vietnam         sector beyond 2010, the              after completing upgrade         of Da Nang and the Cai
                     Maritime Code has been        Vietnamese government will           and expansion of 10 key          Mep-Thi Vai Seaport in the
                     revised to encourage more     develop the shipping sector          ports.                           southern province of Ba
                     investments.                  as a leading industry of the             The 10 ports are Cai Lan,    Ria-Vung Tau.
                         It encourages             sea-based economy, further           Hai Phong, Cua Lo, Da Nang,          Vietnam aims to
                     Vietnamese and foreign        international economic               Nha Trang, Qui Nhon, Sai         increase port capacity for
                     organizations and             integration and ensure               Gon, Can Tho, Thi Vai and        incoming ships by 20% and
                     companies to invest in        sustainable growth.                  Dung Quat.                       cargo loading capacity by
                     developing the country’s          The Vietnamese maritime              The government will          12% to meet the increasing
                     shipping industry, port       sector will build additional         also develop key projects        demand in imports and
                     facilities, maintenance and   deep-water ports in the              including the Lach Huyen         exports.


                                                                            Issue 01, June 2008                                                    1
                       round up

                     visit the 6th aSean Ports and Shipping 2008
                                                                                            The two days conference       companies, ports, terminals
                                                                                        features 30 world-class           operating companies, port
                                                                                        business leaders analyzing        equipment and services
                                                                                        the latest global transport       suppliers.
                                                                                        and logistics issues.                 ASEAN Ports and
Photo: Cochin Port




                                                                                            Participants include 350      Shipping is the largest
                                                                                        senior executive delegates        annual Containerized Ports,
                                                                                        from over 25 countries.           Shipping, and Transport
                                                                                            They consist of shipping      Logistics Exhibition and
                         aS South East Asia’s         Asean Ports and Shipping          lines, shippers, cargo            Conference in Asean. See
                     fastest growing economy,         2008 in Ho Chi Minh City, 5-6     owners, importers/exports,        www.transportevents.com
                     Vietnam will host the 6th        June 2008.                        freight forwarders, logistics     for details.


                     vinalines plans to invest $1 billion on vessel and port
                         viETNaM’S national           vessels.                          investment by the worldwide       man the soon-to-be acquired
                     shipping Line, Vinalines, has        It also plans to develop      issuance of bonds, diversifica-   vessels.
                     planned to invest $1 billion     Hai Phong, Lach Huyen, Hiep       tion of some of its commer-           The national shipping line is
                     in vessels and seaports. The     Phuoc and the second phase        cial business and loans.          looking to open representative
                     carrier plans to purchase        of Tien Sa seaports.                  It also plans to train        offices in key markets like
                     more than a million dwt of           Vinalines will finance the    seafarers and mariners to         Japan, the EU and the US.


                       n Middle east
                       Saudi arabia tackles maritime boom
                           SauDi Arabia is            is in the expansion list,         expanded to increase the               He said port expansion
                       developing its shipping        particularly for upgraded         capacity to handle larger         is a serious business to
                       infrastructure to capitalize   equipment, tightened              ships and containers.             meet the demand.
                       on the international           security and infrastructure           Jeddah Islamic Port is             He said DP World is
                       maritime boom.                 changes to boost its              the Kingdom’s largest port        constantly evolving and
                           Dr Khaled bin Ahmed        operational efficiency.           and expected to handle a          moving towards its mission
                       Bubshait, president of the          The port currently           greater volume of containers,     to develop world class ship-
                       Saudi Ports Authority said     handles around 60% of Saudi       especially with its excellent     ping facilities and ports.
                       Saudi Arabia has envisaged     Arabia’s sea freight imports.     geographic location.                   DP World has made
                       $8 billion on modernizing           In 2007, Jeddah Islamic          DP World’s managing           significant achievement
                       and equipping its              Port handled 4 million TEU        director Mohammed Al Mual-        across the Indian
                       ports, involving private       and expects to handle 6           lem said the global demand        subcontinent, Far East,
                       partnership.                   million TEU in the near future.   for containers will reach 500     Europe, the Americas,
                           Jeddah Islamic Port             The port will be             million TEUs before 2009.         Australia and the UAE.


                     oSC to spend about $4 billion on fleet expansion
                          OMaN Shipping Company       spokesperson said.                to build another five VLCCs.      Company (NITC).
                     (OSC) will spend about $4            Recently OSC orders 10            The deals were valued at          However, the US-led
                     billion for fleet expansion in   VLCCs. Early this year, OSC       about $770 million each.          pressure and the imple-
                     the next three to four years.    ordered five supertankers             OSC is also seeking to        mentation of broad-based
                          The company is growing      from South Korea’s Hyundai        secure long term charter          sanctions on Iran, have ham-
                     its fleet particularly to        Heavy Industries Co and five      contract for at least five of     pered the country to access
                     meet demand for energy           from Daewoo Shipbuilding          the supertankers with the         funding from international
                     transportation, a company        and Marine Engineering Co         National Iranian Tanker           finding institutions.

                     2                                                      Issue 01, June 2008
                                                                                                                                                            round up

             emirates Shipping line quits Zim deal to uS ports
                 EMiraTES Shipping                                 ports of Mobile, Alabama and                       one provided by the Dubai           scrapped its India North
             Line has confirmed that it is                         Tampa, Florida.                                    based shipping line. The            America Express (IDX) service
             ending its participation in                               The last sailing on the                        port rotation for the joint         earlier this year, in which the
             the joint Asia Gulf Express                           AGX involving Emirates                             AGX was Shanghai, Busan,            carrier partnered with Zim,
             (AGX) which it operates                               Shipping was undertaken by                         Osaka, Yokohama, Cristobal,         Shipping Corp. of India (SCI),
             with Israeli carrier Zim to US                        the St Cergue which called at                      Kingston, Mobile, Houston,          OOCL and Evergreen Line.
             ports.                                                US ports at the end of March.                      Kingston, returning to                  However, Emirates has
                Launched in June 2006,                                 The weekly AGX                                 Shanghai.                           not ruled out returning
             the AGX offered direct links                          service used ten 2,900-TEU                             This development comes          to the US trades once the
             from the Far East to the US                           containerships, including                          as Emirates Shipping Line           economic situation improves.

             n europe
             iMo and france agree to suppress piracy
                                                                                                                          iMO Secretary-General,          within the UN Security
                                                                                                                      Efthimios E. Mitropoulos,           Council to protect shipping
                                                                                                                      praised French naval forces         off the coasts of countries
                                                                                                                      in releasing Le Ponant              susceptible to piracy
                                                                                                                      crew- hijacked by pirates           attacks.
                                                                                                                      in the Gulf of Aden, off the            Initiated by France and
                                                                                                                      coast of Somalia, on 4 April        subsequently undertaken
                                                                                                                      2008.                               by Denmark and the
                                                                                                                          French authorities and          Netherlands also, efforts are
Photo: iMo




                                                                                                                      government of Somalia               geared to protect vessels
                                                                                                                      resolved the incident without       carrying humanitarian aid
                                                                                                                      conflict, injury or loss of life.   delivered by the UNWFP to
             (l-R): Mr. J. audibert (Chargé d’affaires); iMo Secretary-general; Capt. J.n. gauthier (naval attaché)       France seeks agreement          Somalia.


             Ship scrapping regulations on process
                 ThE MEPC reports                                  international shipping and                         operational efficiency of ships.    certification and reporting
             substantial progress in                               for recycling activities.                              It will also provide rules      requirements.
             drafting the International                                It provides rules for                          for the environmental                   An intersessional meeting
             Convention for the Safe                               the design, construction,                          friendly operation of ship          of the Working Group on
             and Environmentally Sound                             operation and preparation                          recycling facilities, for           Ship Recycling will be held in
             Recycling of Ships.                                   of ships to facilitate safe                        the establishment of an             October 2008.
                 The new convention will                           and environmentally                                appropriate enforcement                 A diplomatic conference to
             provide globally applicable                           sound recycling, without                           mechanism for ship                  adopt the Convention will be
             ship recycling regulations for                        compromising the safety and                        recycling, incorporating            held in Hong Kong in May 2009.


                CefoR reports soaring claim costs
                    NOrway’S Central                               future, the industry has to                        US$386,000.                         in costs, covering claims in
                Union of Marine Underwriters’                      take further steps to manage                           The claims costs per            excess of US$7 million.
                (CEFOR) says last year was an                      costs without risking safety.                      vessel have risen from                  The CEFOR provides hull
                alarming trend of hull claim                           Nordic Marine Insurance                        US$58,000 to US$105,000             and machinery insurance
                insurance costs that rose 86                       Statistics (NoMIS) reported                        over the same period.               protection and indemnity
                per cent over five years.                          the average cost of a claim                            The International Group of      insurance, cargo insurance,
                    With claims costs likely                       between 1995 and 2003 was                          P&I Clubs members are faced         legal defense and war risks
                to continue growing in the                         US$210,000. In 2007 it rose to                     with a considerable increase        among other covers.


                                                                                                       Issue 01, June 2008                                                           
                                  round up

                                fefC lines raise rates on northern europe-asia routes
                                    ThE FEFC reported that           or spot cargo will increase from        and plastics per TEU will rise              Additionally, the FEFC
                                its members will increase            $100 to $200, which includes            from $250 to $350. Chilled              members also plan to imple-
                                rates from northern Europe           surcharges covering currency,           cargo rates will be reduced             ment a peak season surcharge
                                to Asia from June 1.                 bunker costs and terminal               from $1,700 to $1,600 despi-            of $158 per TEU from June 1 to
                                    The tariff rate per TEU          handling charges.                       te increased tariffs for deep           October 17 on cargo moving
                                loaded with basic commodities            The rate for waste paper            frozen cargo.                           from Asia to the Mediterranean.


                                  n united states
                                  Box shortage hampers uS export boom, freight to China up
                                      uS exporters no longer         freight rates, and bulk produce         $1,500 up 20% from last year.           not enough boxes.
                                  see the benefit of a low           has shifted into cheaper Ame-                The subprime crisis has                Philip Damas, the head of
                                  dollar because of a lack           rica-Far East container service.        caused consumer slump, which            container research at Drewry
                                  of containers to ship US           In turn they increased rates.           in turn reducing the number of          Shipping Consultants said
                                  goods overseas.                        The cost of shipping a              containers coming into USA.             some places, particularly in
                                      A global commodity             40’ft box from the US West                   Export opportunities               the Midwest, completely lack
                                  boom has increased bulk            Coast to China has jumped to            were lost because there were            of containers.


                                Sacramento to dredge channel to 35 feet
                                    SaCraMENTO, the                  provide US$10 million for the           approved by the CTC, the port           will enable approximately
                                capital of California, makes         project.                                will provide $10 million and it         75 per cent of the world’s
                                headway in funding the                   Dredging will be financed           is seeking up to $60 million in         shipping fleet to enter the
                                dredging of the port’s 43-           by the $2 billion Trade Corri-          federal funding through the             port fully loaded.
                                mile shipping channel from           dor Improvement Fund (TCIF).            US Army Corps of Engineers.                 Currently only 30 per cent
                                30 feet to 35 feet.                      The channel-deepening                    The channel runs from              of the world’s ships can enter
                                    The nod is made after            project is estimated to cost            West Sacramento to the San              the port with full loads. The
                                the California Transportation        up to $80 million.                      Francisco Bay near Rio Vista.           construction is scheduled in
                                Commission (CTC) voted to                Apart from the $10 million               Deepening by five feet             2010 with completion by 2013.

                                Panama Canal, virginia ports sign trade deal
                                                                     coast via the Panama Canal.             sharing and market studies              is vital to world commerce,
                                                                          ACP administrator                  exchange will continue to               the Virginia Port Authority
Photo: Panama Canal authority




                                                                     and CEO Alberto Aleman                  be essential elements of our            is also positioning itself
                                                                     Zubieta and VPA executive               collaboration.”                         for increased demand by
                                                                     director Jerry Bridges signed               Sharing information                 building infrastructure
                                                                     the new Memorandum of                   and best practices related              and incorporating the
                                                                     Understanding (MoU) to                  to modernization and                    necessary enhancements to
                                    ThE Panama Canal                 further enforce the alliance            improvement are key                     accommodate the growth
                                Authority (ACP) and the              between the Canal and the               benefits of this agreement.             that is to come.”
                                Virginia Port Authority (VPA)        port authority that was first           Both the ACP and the VPA                     Expansion will build a
                                have reaffirmed an alliance          initiated in June 2003.                 will continue to implement              new lane of traffic along the
                                to increase growth and                    Mr Aleman said, “Our               measures to increase                    Panama Canal through the
                                trade, facilitate the flow of        partnership with the VPA is             capacity and spur growth, a             construction of a new set
                                information sharing and              more important than ever. As            joint statement said.                   of locks, which will double
                                promote the “all-water-route”        we embark on the next phases                Mr Bridges said: “While             capacity and allow more
                                from Asia to the US east             of the expansion project, data          the expansion of the Canal              traffic and longer, wider ships.

                                            Round up links: www.chinadaily.com; www.schednet.com; www.thestar.com.my; www.imo.org; www.ictsi.com;www.apl.com;www.maersk.com
                                                         www.theeconomictimes.com; www.kaleej.times.com; www.gulfnews.com; www.pancanal.com;www.evergreen.com


                                                                                              Issue 01, June 2008
diary
                         captain’s quill


                                                                                                                 iSPS Code for traders
                                                                                                                     DirECTOraTE general of
                                                                                                                 International Trade recently
                                                                                                                 socialized the International Ship
                                                                                                                 and Port Facility Security (ISPS)
                                                                                                                 Code to trade community. Harmen
                                                                                                                 Sembiring, deputy for export and
                                                                                                                 import facilitation was acting as
                                                                                                                 moderator.
                                                                                                                     It aims to provide standards
                                                                                                                 for risk evaluation that enables
 Photo: trade Ministry




                                                                                                                 government to improve security
                                                                                                                 of ship and port facilities, as well
                                                                                                                 implementation of SOLAS Treaty
                                                                                                                 1974.




                                                                             Coaxing out
                                                                             the best...
                                                                                ShiPPiNg Bill
                                                                             2008 brings new
                                                                             hope amidst flawed
                                                                             regulations and
                                                                             practices in the
                                                                             country’s shipping
                                                                             industry.
                                                                                                  Photo: anggi
Photo: anggi




                         Competition yes,                                                                                       May day,
                         robbing assets no!                                                                                     May day
                             iT was a sunny day when over
                                                                                                                                   yOu go and
                         500 Pelindo II workers marched to
                                                                                                                                save the best for last.
                         the parliamentary headquarters
                                                                                                                                Never give up what
                         in South Jakarta, demanding the
                                                                                                                                you are fighting for...
                         House to heed their pleas.
                             They said ‘don’t mind’ if
                         Pelindo that has been giving them
                         daily bread to pay extra effort to
                         competition, but they just ‘don’t
                                                              Photo: anggi




                         agree’ if states assets have to be
                         traded off.


                                                                                   Issue 01, June 2008

				
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