With approximately Indonesian coal export volume reaching 25 million ton a month, the government policy of coal export ban for one month (January 1-31) will potentially make as many as 350 Panamax vessels idle, according to Indonesia National Shipowners’ Association.
The Ministry of Energy and Mineral Resources has officially banned coal exports until January 31, 2022 in securing supply for national power plant PLN.
Many parties have actually stood against the sudden export ban, including the coal producers and import countries. Even, Japan has explicitly stated protest and asked for revision. Kanasugi Kenji, the Ambassador Extraordinary and Plenipotentiary of Japan to the Republic of Indonesia has sent a letter asking the government to reconsider this policy (coal export ban).
Japan Embassy reported that there were at least five coal carriers (bulkers) which were stuck at some ports (coal terminals) but they have been loaded with coal and waiting for departure.
“We expect a special permit for the five coal carriers to depart immediately be issued,” Kenji said in a letter as quoted by kontan.co.id Kontan.co.i on Wednesday (5/1).
Meanwhile, Chiarwoman of Indonesian National Shipowners Association (INSA) Carmelita Hartoto noted that the ban would create business losses to coal producers, supporting businesses (including coal carrier/ shipping lines), until end users or consumers of coal itself.
How does it impact the coal carrier? “We don’t have any exact numbers yet. It is too early to get conculsion since this policy only took effect on January 1, 2022,” said Carmelita.
Carmelita also said that there has been no incoming data regarding the number of detained export coal ships stuck at the port/terminal so far.
“However, we can slightly calculate as a rough estimate (not official data). With average Indonesian export per month reaching approximately 25 million tons of coal, there will be more than 350 Panamax vessels in one month or 12 vessels per day getting impact or idle.”
“If the loading and unloading preparation process takes 5 days, there may be 60 ships stuck in all Indonesian coal terminals,” she explained.
Carmelita added, in supporting coal export activities, there are also other types of ships deployed, including tug & barge that serves transhipment to Bulk Carrier. “They also potentially suffer of loosing jobs,” she said.
Considering coal export activities are well-scheduled, if there is a disturbance in a logistics chain, especially in the coal production sector, it will certainly have an impact on other related activity sectors, including the shipping sector.
Carmelita explained, the contract of coal transportation is carried out using several schemes, both short-term (spot charter) to long-term and each scheme has risks for both parties.
All of this is based on the agreement of both parties and all the terms conditions have been stated in each contract scheme, including in the event of cancellation of shipments.
“The risk from the shipping sector is having to look for alternative cargo so that the ship is not idle,” said Carmelita.
Carmelita has not provided a more detailed description of the impact and anticipation of what shipping lines are doing in facing the challenge of banning coal exports until January 31, 2022.
But, she affirmed each shipping line was conducting an evaluation, studying the extent of the impact of the policy as well as looking for the best solution for all parties.
What is clear is that with the fulfillment of the need for coal supply to PLN which is quite large and in a relatively short period of time, it is estimated that there will be an increasing need for coal transportation vessels, especially domestically.