Port Service Innovation Expected to Create Cheaper Logistics during Economy Recession: IMLOW

Ports should continue to innovate services, including fully adoption of digital based service at any kind of situation, including during this hard time when the economy and trade activity are slowing down, Indonesia Maritime Logistics and Transportation Watch (IMLOW) has said.

In a press statement today, September 28, IMLOW General Secretary Achmad Ridwan Tentowi admitted that Indonesia’s international trade of export/import, especially the trade of non-consumer goods, were under a serious pressure amid the pandemic covid-19 that hit all countries worldwide.

Indonesia, he said, was still benefited from potential domestic trade. “It is true we are facing a negative (minus) economy growth that may force us to an economy recession. However, our domestic trade is still promising. Our domestic consumption is high. So, no need to be over pessimistic.  Don’t worry about it too much,” Ridwan said.

Under this situation, Ridwan expects the port operators, including Tanjung Priok Port operator to continue do innovation to improve service. Fully adoption of digital based service, according to Ridwan, will support a more efficient and effective service. And, this even help the logistics performance during this hard time.

“An efficient service at the port will automatically make the logistics cost cheaper, thus creating a cheaper good price. So, the key is creating a more efficient service for logistics activities,” he said.

Prediction has said that Indonesia would soon come to economy recession, since the economy growth in the third quarter (Q3) would be minus.

Minister of Finance Sri Mulyani Indrawati has just stated that the Indonesia’s Q3 economy growth would range from minus (-) 2.9% to minus (-) 1%. This means that Indonesia’s quarterly economy growth would be minus for the second time, after minus (-5.32%) in Q2.

 

Terminal Operator Optimism

Meanwhile, the operator of Tanjung Priok’s busiest terminal – the Jakarta International Container Terminal (JICT), is still optimistic, though the economy is threatened with recession.

JICT’s market share is reaching 40% of total Tanjung Priok export/import, which is mostly dominated by the trade to/from China.

And since China is a country with positive economy growth (not in recession), JICT Vice President Director Riza Erivan is optimistic with the JICT growth.

“If a terminal handles the trade to and from the countries facing economy recession, no doubt, it must get a deep impact. But, fortunately, most of JICT’s cargoes are to and from China,” Riza said, adding that 75% of JICT’s market are cargoes to and from China.

However, Riza affirmed that the pandemic covid-19 has downgraded the community purchasing power, resulting in the slowdown of business activities, including the ones in the port.

“Prediction has said that the Priok throughput will drop around 16% for the whole year of 2020. But, overall, Indonesia’s economy is still better that neighbour countries that will face a deeper economy recession, including Singapore,” he said.

Riza also affirmed that the economy recession would affect the investment at the port. “Ports are forcedly to postpone some investments until the economy is getting better,” said Riza.

 

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