By: Bambang Sabekti, Professional in Maritime Industry and Asmari Herry, Container Shipping observer
It is interesting to observe the throughput growth of container at Tanjung Priok Port, the Indonesia’s largest port and the biggest contributor to the revenue of state port operator PT. Pelindo.
For YTD September 2021, volume for the Port of Tanjung Priok increased by 12.32% YoY, compared to the same period last year. Its YTD domestic throughput increase by 18%, while on International YTD throughput increased 9.7%. On month to month (MTM), the domestic volume in September also slightly increased, by 3.5% from August, but the international the volume dropped by (-10. 47%), according to data.
It was the first time in 2021 this port experienced international MTM volume drop in September. In the previous months, the international MTM volume always increased. Limited of space and lack of container availability which makes high ocean freight which perhaps become as obstacles why the international volume decreased in September compared to August.
Tobacco’s shipper in Garut, West Java has to stop exporting their tobacco to Europe, as ocean freight triples compared to normal rate. Many of the ships that served export to the U.S. were constrained by heavy congestion in Long Beach and Los Angeles and stuck in many other port outside Indonesia including port of Singapore (PSA) .
Another cause is of our trading partners, namely China and India experiencing an energy crisis that affects their production process and manufacturing activities.
The decline of throughput in Tanjung Priok as a barometer of International Trade affected Indonesia’s Trade Balance, which although still surplus because of increase of commodity price but the volume tended to decrease. In September both exports and imports decreased by 3.84% and 2.67% respectively.
On the other hand, based on the data, there is mis-match or imbalance trade in terms of container size for export and import. Import containers are usually size d20 while for export from Jakarta cargo is light and therefore using more containers sizes of 40HC and 45. So the carrier / MLO will repo in container d0HC and 45 and repo out d20 and empty reefer container.
In 2020, at Tanjung Priok Port, for all international container terminals, 6.8% of the total import is empty container (container repositioning – in) and in 2021, 5% of the imported volume is empty container. It makes Jakarta is more running out of the container. While the volume for export in Tanjung Priok for 2020 and 2021 contains empty containers of 17.8% and 14.6% respectively.
This mis-match container will also direct or indirect as trigger to increase freight rate which may contribute why the international volume are decline.
MLO must truck empty containers to empty depot containers from the Port and or from Port to Empty container depot, and use the ship’s space to load empty containers that are in fact no revenue, but incur the cost . The cost of container reposition will be charged to shippers who use containers that will be included in ocean freight components. So, it is not strange if there is a huge increase in ocean freight of container shipping, while if there is a surplus container the price of ocean freight will be relatively cheaper. Another problem is that not all shippers want to shift from 40 to d20, because the nature of cargo and the total cost of shipping will also be more expensive.
Since last month the human mobilities have increased, with the lowering of PPKM levels in regions. Tourism centres are already full, including Mailoboro Yogyakarta and slopes of Mount Merapi, such as Mbah Marijan Moseum, ‘‘ Moseum Hartaku” and Batu Allien which are filled with domestic tourists who use land routes, considering that the air route is very complicated because of PCR tests requirement. Bale Raos Restaurant (The Sultan’s Dishes), Mbah Marto’s Mangut Lele Restaurant in Sewon, Bantul, Kopi Klotok in Pakem, Sleman and Warung Soto Pak Soleh are also crowded with visitors for lunch.
Demand for inter-island ship’s space also increased. Domestic throughput in September increased by 18% compared to the previous month. As in previous years, the domestic shipping business trend will continue to strengthen in the second half. Demand in the second half increased, due to the increasing need for Christmas and New Year’s Day, as well as regional governments had to break their annual budget for the procurement of needed goods. Like economic law, if demand rises, cost of bunker increase significantly and supply of space is maintained or less, the price will adjust upward.
As reported, in recent months freight for domestic shipping has also a bit increased due mainly to huge increase of bunker price and the number of tonnage /capacity of domestic shipping vessels are slightly decreased compared to a few months earlier, because dozens of domestic ships were sold abroad or chartered out, considering they could sell their ships at 3 times the price, compared to the price when they bought. And the charter out price for 2,500 teus is around US$30,000/day. You could imagine if you charter out 3 ships only, how much billions every morning goes into your bank account?
Container shipping is lifetime business, very dynamic, competitive and follow the cycle of market mechanism, sometimes up and many times down.