Maritime highway programme: Tough mission to the East
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Program tol laut: Misi berat ke timur
6 March 2023
By: Rahmad Fauzan
Arief R. Pabettingi is still quite furious. As a player in the transportation and the logistics sectors in eastern Indonesia, he sees that infrastructures in ports in Sulawesi and its surroundings have yet to be fully adequate.
Arief is the President Director of PT Raihan Perdana Abadi, a company that provides expedition services. He is also the Chairperson of South Sulawesi Indonesian Exporters Association (GPEI).
As a business player that engages in the transportation and the expedition sectors, Arief is familiar with the maritime highway programme that was initiated at the start of President Joko Widodo’s term.
The purpose of the maritime highway programme is to support balanced national development and strengthen logistics distribution routes that can balance the economy between western and eastern regions as well as between developing and underdeveloped regions.
The maritime highway provides infrastructures and sea transportation that constantly and regularly provide services with an adequate capacity, and they are affordable for everyone.
The maritime highway is the embodiment of President Joko Widodo’s speech at his inauguration on 20 October 2014. At the time, the President was enthusiastic to make Indonesia a maritime country with his motto ‘jalesveva jayamahe’, which means ‘at sea, we are triumphant’.
“The ocean, the sea, straits, and bays are the future of our civilisation. We have turned our backs on the sea, the ocean, straits, and bays for too long. This is the time for us to turn things around,” the President said at the time.
The maritime highway programme started in 2015. The enthusiasm to build connectivity at sea has been continuing until now.
“Infrastructures are the main priority. Our ports must be ready if we want to export in large quantities. So, port organisation must be the main priority,” Arief said to Bisnis on Thursday (2/3).
According to him, the maritime highway programme is not enough to reduce the price disparity of basic needs, especially in remote areas. Moreover, basic needs are often scarce in several regions.
This is caused by the limited access between regions and the limited load capacity.
“So, if the maritime highway access is expanded to reach several ports in remote areas, I think that the prices of basic needs, especially food, will go down further,” he said.
Seeing the data from the Trade Ministry, the maritime highway programme impacts the prices of basic needs and other essential commodities in remote, underdeveloped, and outermost regions.
For example, the price of flour in Supiori Regency has declined by 50% from Rp20,000 per kg to Rp10,000 per kg.
Then, the price of sugar in East Halmahera Regency has declined from Rp17,000 per kg to Rp10,000 per kg.
Assessment and Trade Development Agency Chairperson of the Trade Ministry Kasan Muhri stated that not all 3TP (remote, underdeveloped, and outermost) areas passed through by the maritime highway enjoy affordable basic needs.
He said that the reason for this is the imbalanced voyage and the long travel time.
“The tariff of stevedoring workforce is still high and unstandardised. Moreover, the number of containers is lacking, and their condition and capacity are not up to standard. Then, ship schedules are unclear as they tend to not be punctual,” Kasan stated.
For future organisations, he said that he expects an increase in shipping frequency so that there will be more arrivals with shorter travel time.
Besides that, his agency will be more active in conducting disseminations to the Trading Department regarding data collection, supervision, and evaluation so that the data delivered can be accurate.
According to Kasan, the Trading Department in regions has to be more proactive in encouraging business players to utilise the maritime highway optimally.
Wide collaboration
Indonesia Chamber of Commerce and Industry (Kadin) Logistics and Supply Chain Head Akbar Djohan reckoned that collaborations with state-owned enterprises (SOEs) and private companies are improving in the maritime highway programme.
That condition can be seen from the number of new routes opened to facilitate distribution between islands.
To strengthen that programme, he hopes that the government can establish wide collaborations with national shipping companies or other pioneers so that existing routes can be balanced with punctual delivery schedules.
Hence, there will be no lack of ships due to them taking too long on other routes.
An academician from Institut Teknologi Sepuluh Nopember (ITS), Saut Gurning, reckoned that the maritime highway programme affects private companies and existing private routes, which can be seen from the decline in cargo volume.
This is related to the new option of sea transportation to use the maritime highway programme that has received subsidies for its operation, ports, and some of its land logistics costs at the start of its implementation.
That condition started to change in the last 4 to 5 years. Moreover, the market share reduction has started to be compensated by synergising existing shipping programmes with the maritime highway programme, which is carried out by conducting route engineering where port to port service by maritime highway fleets and on maritime highway routes are combined with routes continued from main ports in Indonesia.
Hence, private shipping companies can take advantage of cargo movement from the port of origin to the destination port, which will be carried out by maritime highway fleets and on maritime highway routes in the future.
“In 2021, 2022, and 2023, on most maritime highway routes, selected private shipping operators have synergised with shipping SOEs, even though it has not been implemented on all maritime highway routes,” he stated.
