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Govt looks to ro-ro ships for transportation

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by November 23, 2016 General

The Transportation Ministry is looking to expand the use of roll-on/roll-off (ro-ro) vessels to transport trucks carrying goods to islands across the archipelago in an attempt to reduce congestion and improve logistics.

Ro-ro vessels are expected to help move goods from the country’s economic centers, such as Jakarta and Surabaya, East Java, to remote places like Lembar in West Nusa Tenggara and Timika in Papua.

The ro-ro mechanism can save a significant amount of time as well. Transportation from Surabaya to Lembar, for instance, which normally takes up to 48 hours, could be reduced to 21 hours with the use of ro-ro vessels.

“Our land routes are so congested that we see worsening road conditions. On the other hand, there are many ships left unused that can potentially solve this transportation problem [by being put to use as ro-ro vessels],” Transportation Minister Budi Karya Sumadi said on Tuesday.

The worsening road conditions have forced the Public Works and Public Housing Ministry to allocate no less than Rp 2.4 trillion (US$178.78 million) in this year’s revised state budget for major and minor road fixes.

Budi said several routes — such as Panjang in Lampung to Jakarta and Surabaya to Lombok in West Nusa Tenggara — were already considered profitable routes that ro-ro vessels had begun plying.

For less profitable routes, the ministry plans to offer a subsidy for ro-ro vessels operators. However, no details were immediately available regarding the subsidy.

At present, logistics costs amount to 26 percent of Indonesia’s gross domestic product, twice as high as Singapore’s and Malaysia’s.

Indonesia has also slipped 10 places in the World Bank’s 2016 Logistic Performance Index to the 63rd place out of 160 countries surveyed, below some of its neighbors in Southeast Asia. Singapore sits in 5th place.

Improving logistics has become one of the priorities for President Joko “Jokowi” Widodo, and his administration has launched several policies to ease the flow of goods, including establishing bonded warehouses and setting up scheduled freighter services.

State-owned ferry operator ASDP — which runs 139 ferries on 195 routes — is looking to launch a Surabaya-Lembar route in early December to support the government’s ro-ro vessel initiative.

Most of its vessels are below 1,000 gross tonnage (GT) in size, allowing for just 12 vehicles, but the company also has five 5,000-GT vessels offering a transport capacity of more than 200 vehicles.

Business players say they are skeptical about the plan. Indonesian Logistics Association (ALI) chairman Zaldy Masita said several obstacles remained, pertaining to the limited number of vessels, the load factor and on-time performance.

“Sometimes the vessels would be delayed by hours, even by days. If they do not operate on time, the logistics costs will still be high for us,” he said.

Indonesian Truck Businessplayers Association (Aptrindo) vice chairman for distribution and logistics Kyatmaja Lookman voiced doubts as well, especially regarding costs on the Jakarta-Surabaya route.

“It costs Rp 2.5 million by land [to transport goods], but it can rise to Rp 4.3 million according to the pricing [from an operator]. So don’t let this shift result in prices being jacked up,” he said.

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