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Three foreign shipping companies have stopped their operations at Belawan port, North Sumatra, over the past two years following the high congestion rate at the port and a decline in export productivity in the region, reported Bisnis Indonesia.
The three companies consist of two Taiwanese companies, which have been out of operation since August 2010, and one South Korean company, which has been out of operation since last year. Currently, there are only seven foreign shipping companies operating at Belawan port.
Asmari Herry, co-chairperson for container transportation at the Indonesian National Shipowners' Association (INSA), revealed it had been more difficult for foreign shipping companies to compete at Belawan due to the worsening congestion.
Therefore, he argued, it was understandable for them to stop operations in Medan due to high cost.
"Congestion at Belawan port, especially at the international container terminal, is very poor," he told Bisnis last week.
In addition to the poor congestion, export cargoes from Belawan and some other ocean-going ports have been sluggish, while imports have been surging sharply, especially from China, following the implementation of the Asean-China Free Trade Agreement (ACFTA)
Asmari added the ACFTA had bolstered the import flow from China to Indonesia, boosting container charge from China and at the same time lowering container charge from Indonesia.
At Belawan port, prior to the ACFTA, regional carriers were still able to carry 14,000 TEUs of containers per month, higher than 11,000 TEUs of import containers.
However, in the wake of the ACFTA, the flow of export container is declining, while that of import flow is on the rise. Data by the Central Statistics Agency (BPS) showed North Sumatra's export volume in the first semester of 2010 hit 3.36 million tonnes, down from 3.69 million tonnes in the first semester of 2009.
Cargonews Asia
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