Preparing Jakarta’s Port for very Large Ships
The port of Jakarta, Tanjung Priok, is the uncontested gateway to Indonesia. It serves the country’s capital with more than 10 million inhabitants, but is also a regional hub for all of Indonesia. With a volume of 5.5 million TEUs handled in 2016, Tangjung Priok is the world’s 27th-largest container port. Its extension, the New Priok Port, the first phase of which came into operation in August 2016, has increased Jakarta’s attractiveness for large vessels.
As an archipelago state, Indonesia has much to gain from improving its maritime connectivity and attracting more direct liner services. These services rely on ever larger ships. What is needed to attract them, and how could Jakarta best handle them? A new report published by the International Transport Forum at the OECD assesses these questions.
The report’s recommendations include:
- Smart phasing in of next phases of the New Priok port project
In Jakarta, container volumes declined for most of the recent past, which increases the risk that new terminal capacity will cannibalise existing terminals. Careful phasing in of additional terminal capacity would be necessary.
- Stimulate port investment in other parts of Indonesia
Jakarta’s attractiveness as a port depends partly on the attractiveness of other Indonesian ports for large container ships. It will be important to coordinate with port investment projects elsewhere in Indonesia, so that other major ports in Indonesia can also accommodate very large container ships.
- Open up domestic coastal freight transport to international shipping lines
For an island nation like Indonesia, maritime connectivity is of great importance for domestic commerce as well as external trade, but also for domestic trade. Maritime cabotage regulations most likely constrain the development potential of coastal shipping. Although reforming maritime cabotage regulations have proved challenging in many countries, some have nevertheless opened up cabotage.
- Resolve bottlenecks elsewhere in the supply chain to reduce port dwell time of containers
Considerable political attention has focused on container dwell time and resolving bottlenecks in the port of Jakarta. While commendable, it could be broadened to bottlenecks elsewhere in the supply chain.
The report “Impact of Mega-Ships: The Case of Jakarta” can be viewed online and downloaded from https://www.itf-oecd.org/impact-mega-ships-jakarta
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