World Bank: Optimizing Indonesia's Main Sea Port Tanjung Priok in Jakarta
Inefficiencies at the Tanjung Priok port, Indonesia's main port (located in the heart of Jakarta) and which handles about two-thirds of the country's international trade, are a major cause for logistics costs in the domestic economy. Indonesia's logistics costs account for about 24 percent of GDP, thus significantly higher compared to its regional peers. The long dwell time at Tanjung Priok is one of the largest concerns, particularly as trade flows continue to grow. The average import container dwell time increased from 4.8 days in 2010 to 6.4 days in 2013.
The Indonesia Port Corporation (known as Pelindo II) expects that container traffic in the Tanjung Priok port will grow more than 160 percent by 2015. Therefore, shortening long dwell times and introducing simple payment systems are needed. In late January 2014, Pelindo II launched a new ICT system to speed up document processing, while efforts to reduce the port's dwell time are on the way (the pre-clearance stage accounts for about 58 percent of dwell time).
As the extension of Tanjung Priok is expected to be finished in 2015, the year 2014 may be a difficult year for Tanjung Priok, according to the Head of the Indonesian Logistics Association.
Indonesia ranked 59th out of 155 countries based on the World Bank 2012 Logistics Performance Indicator report, thus being ranked behind other middle-income countries in the region. Poor logistics connectivity also constrains the potential of the regions, increasing general living costs.
Further Reading:
• World Bank Report: State of Logistics Indonesia 2013
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