about us
11 October 2016

Cargo Stay Limit Sought to Cut Port Dwell Times

The government has intensified efforts to upgrade the country’s competitiveness in the logistics sector by imposing a stay limit for containers at major ports to further slash dwell time.

Dwell time refers to the time that elapses from cargo arriving at a port until all permits and clearances have been obtained and the goods leave the port.

Under the new policy, containers that have been held for more than three days at a major port, like Tanjung Perak in East Java, Belawan in North Sumatra and Makassar in South Sulawesi, are required to be removed from the port’s inner ring, with the exception of goods that are quarantined or are not permitted to be moved by the customs and excise office.

Transportation Ministry director general for sea transportation Antonius Tonny Budiono said the measure, formalized under the newly issued Transportation Ministerial Regulation No. 116/2016, mirrored what had been implemented at Jakarta’s Tanjung Priok, the country’s busiest port.

“But the technicalities would depend on Pelindo [Pelabuhan Indonesia] and the respective port’s authority. We just set the principles,” he said on Wednesday, referring to the state port operator.

Logistics costs account for 26 percent of Indonesia’s gross domestic product (GDP), twice as much as in Singapore and Malaysia. The country slipped 10 places in the World Bank’s Logistics Performance Index (LPI) this year to 63rd out of 160 countries surveyed.

President Joko “Jokowi” Widodo, a successful furniture exporter prior to entering politics, has intensified efforts to bring down stubbornly high logistics costs by issuing a series of policy packages aimed at reducing the country’s high dwell time.

Tanjung Priok has since become an exemplar for the campaign, as the government and Pelindo II, the port’s operator, have reduced dwell time at the port from 4.7 days last year to around 3.2 days currently.

President Jokowi, however, expressed criticism last month as Tanjung Priok’s success had yet to spread to other major ports, whose dwell time ranges from six to eight days. The government has since pledged to reduce the figure to around 3.5 days by October.

Meanwhile, Pelindo I, which oversees Belawan Port, stated that it had applied an even stricter maximum stay at the port of only one day.

“On the second day, as long as the container has been permitted to be released by customs, it can be relocated to the buffer zone,” Pelindo I corporate secretary M. Eriansyah said, referring to a temporary container stocking terminal.

Currently, Eriansyah said the unloading time, which is companies’ responsibility, made up 0.8 days of the total dwell time, claimed to be 4.6 days in August. The company asked for a similar commitment from other ministries and agencies.

Indonesian Logistics and Forwarders Association (ALFI) chairman Yukki Nugrahawan Hanafi, meanwhile, said the new policy would not have a significant impact without integration in the processing of import and export paperwork, which currently involves 16 ministries and agencies.

“If the container that is relocated has not even had its documents processed, we have to agree that it does not decrease dwell time figures, but only the yard occupancy ratio of the port. It will just increase logistics costs,” he said.

In March, the government announced the introduction of a mechanism that would allow businesses to process permits for export and import activities under one roof, in a coordinated effort to slash stubborn dwell times at ports.

The new mechanism, dubbed Indonesia Single Risk Management, is set to be integrated with the country’s export-import licensing portal known as the Indonesian National Single Window (INSW), where every registered business player will be given a single identity record to apply for export and import permits.


Source: http://www.thejakartapost.com/news/2016/10/07/cargo-stay-limit-sought-cut-port-dwell-times.html