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Tanjung Priok demurrage levies to be revised

Tanjung Priok demurrage levies to be revised
The Tanjung Priok Port authority, along with terminal operator Jakarta International Container Terminal (JICT) and Pelindo II, plans to revise newly applied storage fees in the wake of complaints that they are financially burdensome and calls for a revision.

Under new regulations, which became effective on 1 March, cargo owners must clear their containers from Tanjung Priok on the day of arrival. Failure to do so will see a 900% penalty being imposed on the IDR27,200 ($2.07) per teu per day base tariff for stacking service.

But the new rule is being opposed by the Indonesian Chamber of Commerce (Kadin), as it may result in higher costs for businesses. "The Indonesian Chamber of Commerce and Industry [Kadin] complained about the new scheme. We will revise it," Tanjung Priok Port Authority head Bay Hasani said.

Previously, container stacking for the first three days of arrival was free, with a progressive rate afterwards.Tanjung Priok Port Authority will consider Kadin’s representations and will revise the new regulation within this month.

“We see that there have been protests from Kadin. We have had a meeting at the Office of the Coordinating Economic Minister. We will fix the scheme,” Bay said.

The revision of the new container stacking regulation is still expected to streamline the flow of goods and reduce dwell time at Indonesia's main port of Tanjung Priok, which currently stands at between 3.6 days to 4.5 days.

This week, a new scheme will be discussed with state port operator Pelindo II, and could start taking effect in the next two weeks. This scheme may charge container owners the IDR27,200 base tariff on the day of arrival, with a progressive rate on the following days, for example 500% of base tariff on the second day and 750% on the third day, and progressively more for longer periods of time.

“So this doesn’t mean the progressive tariff is eradicated. We don’t want the current dwelling time, which had done pretty well, to get worse again,” Bay added.

This would still be a significant change from the he previous system which gave three days of free storage, with an increase to 500% levy only from the fourth to 10th day, and 750% from the 11th day.

The Office of the Coordinating Maritime Affairs Minister dwelling time task force head Agung Kuswandono reiterated that the port was not a place to stack the containers and that Pelindo II business had never relied on that.

The move to jump straight to the 900% penalty levy had caused an uproar from businesses as they maintain that the imposition of higher fees had no immediate correlation to reducing dwelling times and ran counter to the government’s efforts to reduce logistics costs. Bay admitted that the policy might have caused a “shock among business players”.

He added that Pelindo II and the port authority would also change the basis for calculating the start of the first day, which would be based on the number of hours, not calendar day, and begin from the time the containers were actually offloaded from the vessels. Pelindo II was also likely to hold the levy on Saturdays and Sundays.

Kadin deputy chairman for logistics and supply chain management Rico Rustombi said that he appreciated the government’s move to respond to the protest. “But the new progressive tariff scheme should not be more expensive than the last regulation. We even hope it can be cheaper,” he added.