As the new year of 2012 approaches, the Tanjung Priok port in Jakatora, Indonesia, is getting ready to start new measures. The state owned port is going to raise storage fees of steel storage containers by 200-300% starting January 1, 2012. Richard Joost Lino, the port’s President Director, explained that this measure would help lower congestion at the port. Lino compared the port to a “warehouse” because of the large number of units waiting to be loaded or unloaded at one time.
Major Increase in the Fee
The Tanjung Priok port has a unit volume capacity of 5 million TEUs (twenty-foot equivalents). If the 200-300% increase in fees does not alleviate congestion at the port, the port leaders are not opposed to raising the fee by another 200%. Fees will become progressively higher, increasing by 200%, after three nights of storing a cargo container at the port. Larger loads, upwards of 50 boxes, will also have a higher fee, especially after spending five days at the port. This increase would be 300% of the initial fee.
The current storage fee at Tanjung Priok is Rp 20,730, which is $2.30 in United States currency.
The average time that a cargo container is stationed at a dock is one day in the United States. The average unloading time in Malaysia is three days. The average unloading time at Tanjung Priok port is currently six days. This prolonged unloading time is causing the increasing congestion.
No Support from Chamber
The Indonesian Chamber of Commerce and Industry does not support the storage fee increase. Natsir Mansyur, the chairman for trade, distribution and logistics, said that the fee will “burden us and the increase will push up the logistics cost, which is already high”. The logistics cost is already at 17%, compared to Singapore’s 6% and Malaysia’s 8%.
Other measures have been made to couple with the increased storage fee to help ease the port’s congestion. The port has invested in $250 million for new loading cranes and 11 luffing cranes, which will be in use within the New Year.