INDONESIAN SEMINARImprovement of Logistics in Eastern MPA

- Future Development of Cilamaya New International Port-

31 October 2013

Interim Summary ofThe Study on Efficient and Integrated Transport/Logistics

Development in Eastern MPA

Agenda1. Necessity of Multiple Seaport Development(1) Background of Cilamaya Seaport (2) Concern about Current Traffic Situation(3) Role of Cilamaya Seaport

2. Current Situations of Logistics in Eastern MPA(1) Logistic Demand(2) Traffic Situation(3) Container Terminal(4) Custom Clearance

3. Logistic Vision Toward 2020(1) Preference of Cilamaya & Tanjung Priok Port(2) International Cargo Flow

4. Next Step1

1. Necessity of Multiple Seaport Development(1) Background of Cilamaya Seaport

1. Priority Project of MP3EI• Cilamaya seaport is one of the priority projects of Master Plan of Acceleration and Expansion

of Indonesia Economic Development (MP3EI)

2. Flagship Project of MPA• 2010.12 Memorandum of Cooperation was signed between

Ministers of Indonesia and Japan• 2011.3 1st Steering Committee (S/C) (Ministerial Level Meeting)

Approval of Cilamaya as one of Fast Track Projects• 2012.10 3rd S/C Approval of Cilamaya as one of Flagship projects

3. MOT Tanjung Priok Master Plan (Jun, 2012)• Development of Cilamaya Seaport is included in the revised

Master Plan of Ministry of Transport

4. Joint Press Conference at Japan-Indonesia Summit Meeting (18th Jan, 2013)

• Japanese Prime Minister, Shinzo ABE, indicated the commitment of Government of Japan to support Cilamaya Project.

5. Joint Press Release at 5th Indonesia-Japan Joint Economic Forum (4th Oct, 2013)

• Coordinating Minister for Economic Affairs, H.E. M.Hatta Rajasaand Minister of Economy, Trade and Industry, H.E. Mr. ToshimitsuMotegi shared the recognition of promoting infrastructure development including development of Cilamaya Port.

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Source : Ministry of Economy, Trade, and Industry

1. Necessity of Multiple Seaport Development(2) Concern about Current Traffic Situation

1. “Now we have to face extra costs for our logistic that are over our expectation. We can make Cilamaya as an alternative port and it can be much helpful to our industry in Java especially to compete with our exports and imports of our local goods.” (by SofjanWanandi, Chairman of Employers Association of Indonesia (APINDO))

2. "If see on the growth, the industries in Jakarta and surrounding area was already saturated and jammed. Industrial zones in eastern Jakarta and West Java that was growing up to Cirebon needs a good service. The existence of Port Cilamaya also becomes a solution of load reduction in the road and the congestion in the capital city. In addition, the project will boost national economic productivity, the efficiency of logistics costs and increase private participation in the port sector (Chamber of Commerce of West Java) (Bisnis Indonesia, 9/9/2013)

3. “4 Km traffic congestion occurred in Sunter Toll road to Tanjung Priok due to long queue of container to Tanjung Priok.” (Detik News 13/7/2013)

4. “Importers are losing billions of rupiahs due to congestion in recent weeks. They must bear the cost of overtime usage containers. Delay of 5,000 containers (20 feet), for example, demurrage could reach 150,000 US dollars per day.” (Secretary-General of the Association of Indonesian National Importers) (Kompas, 19/7/2013) 3

MP3EI Priority Project1. Necessity of Multiple Seaport Development

(3) Role of Cilamaya SeaportMPA Flagship Project

(a) Correspond to Increasing Demand for Containers

The Container cargo demand is forecasted to increase from 5.3 million TEUs in 2011 to be 19.4 million TEUs in 2030, 3.6 times as much as the volume in 2011.

(b) Mitigate traffic congestionSource: Cilamaya F/S Study Report

(c) Contribute to enhance Connectivity

Phase 1: 3.75 Mill TEUPhase 2: 3.75 Mill TEU

Cilamaya Port

Traffic Condition in 2010 already indicated saturation exceeding its capacity in terms of VCR

Source: MP3EI

CilamayaPort

Source: Cilamaya F/S Study Report

Multiple Seaport Development is vital for the country of Indonesia:i) Increase of attractiveness to industrial users: good end-to-end transport time and competitive servicesii) Improvement of general road condition: reduce traffic flaw into Jakartaiii) Reduction of capacity shortage risk: diversified port construction completion risk 4

2. Current Situations of Logistics in Eastern MPA(1) Logistics Demand

Legend: Major industrial area

: Sea port

: Main cargo flow (estimated)

20%8%

47%

25%

Industrial Area: 940 ha

Industrial Area: 10,789 ha

Industrial Area: 4,141 ha

Industrial Area: 1,132 ha

EastSouth

West

DKISource : JICA Study Team※Cargo consists container of export & import

Logistic demand for Eastern MPA (Bekasi ~ Karawang ~ Purwakarta) keeps increasing.

- 3,292 tenant companies with the share of 66% in allGreater Jakarta Metropolitan Area in 2011.

- From 2006 to 2011, the number of tenants increased by 927.- The size (ha) will be expanded twice from 2012 to 2015. - As for 11 major industrial estates, there are approximately 1,100 thousand employees in 2011.

Source : BKPM (Sep 2012)

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Tj Priok Port

2. Current Situation of Logistics in Eastern MPA(2) Traffic Situation (Logistics Route from Eastern MPA to

Tj. Priok Port)

From Eastern MPA to Tj. Priok Port

Tj Priok Port

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2. Current Situations of Logistics in Eastern MPA(2) Traffic Situation (Jakarta-Cikampek Toll Road and Jakarta

Outer Ring Road)

Source: JICA Study Team

Average Travel Speed on hourly on the day of the week

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Source:JICA STUDY TEAM

Slow Speed from Cikarang Barat to Cawang. Heavy Traffic in Friday evening caused by many trailers going to Tanjung Priok port for weekend vessel.

CawangFrom MM2100 to JICT at

Tajung Priok Port3 hours 2 minutes

Heavier congestion in front of Tg. Priok Port :Distance : 5.05 kmTravel Time : 0: 42:03Average Speed : 7.2 km/h

JABABEKA

EJIP

Tj. Priok

Cilincing

Cikarang Barat

2. Current Situations of Logistics in Eastern MPA(2) Traffic Situation

Cikarang UtamaToll Gate

Date: Friday, 24 May 2013Time: 15:00 - 18:00

Number indicates average speed (km/h)

“If traffic situation is normal, turnover rate of trucking is 2 round per day, whereas in current heavy congestion, the rate is 0.7 - 0.8 round per day.” (By forwarder)

Voice of Users

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MM2100 Industrial Town

START

2. Current Situation of Logistics in Eastern MPA(2) Traffic Situation (Situation of Arterial Road in front of

Tj. Priok Port)

Heavier congestion in front of Tj. Priok PortDistance : 5.05 kmTravel Time : 0: 42: 03Average Speed : 7.2 km/hNumber indicates the travel speed

Source：JICA Study Team9

36

53 5564 70 74 75

10298

90100

107 110100

71 77 7481 87 90

85

0

20

40

60

80

100

120

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

37 39 44 40 42 42 4437

5144 45

48

91

69

87 93 9589 90

60

9691 96

72

5869 69 71 71 72

52

75 73 76

Export Yard Import Yard Average

2. Current Situation of Logistics in Eastern MPA(3) Container Terminal (Container Yard Density Import & Export)

Source：JICT

2012 2013%

Container Yard Density is concentrating year after year

11

2.1

2.3

3.9

3.5

5.9

4

2.4

0 200 400

Unit：Hours

2. Current Situations of Logistics in Eastern MPA(3) Container Terminal (Average terminal in/out time at JICT

and KOJA Terminal)

Average terminal in/out time Average duration on a day of the week

Source: JICA Study Team

Average duration 3.5 hoursOver 5 hours 24%

Sunday

Saturday

Friday

Thursday

Wednesday

Tuesday

Monday

< 1 hr,14% 1-2 hr,

9%

2-3 hr,29%

3-4 hr,14%

4-5 hr,10%

>5 hr,24%

12

75

87

150

51

0 100 200

2. Current Situation of Logistics in Eastern MPA(3) Container Terminal ( Track tracking inside terminal)

Queuing at Gate Entrance:1 hour

Lift On:2 hours

Terminal entry time: 9:21:18Terminal exit time : 12:53:18Duration : 3:32:00

Unit: Minutes

Average Duration on Each Activity in Container Terminal at Tj. Priok Port

Case study of Picking up import cargo in JICT 1

Source: JICA Study Team

Waiting/Slow Moving due to

congestion

Lift on truck (Import)

Lift off truck (Export)

Queuing for obtaining of E-

Ticket

21 - 25

16 - 20

11 - 15

6 - 10

km/h0 - 5km/h

km/hkm/h

km/h 13

Source: JJC Questionnaire survey & JICA PROTRAF Study Source: JJC Questionnaire survey & JICA PROTRAF Study** Data of Malaysia & Thailand are 2007

2004 2013

Red Lane 6.5 days 10.5 days

Green Lane 3.5 days 2.8 days

Malaysia Thailand Indonesia

Red Lane 2 days 2.5 days 10.5 days

Green Lane 1 day 2 days 2.8 days

Average Time for Custom Clearance Comparison of Average Times by Nation

2. Current Situations of Logistics in Eastern MPA(4) Custom Clearance

“Due to Long Process of Custom Clearance, manufacturers need to carry excess inventory, sometimes valuing up to 1 billion rupiah.” (By forwarder)

Red Lane : Having document & cargo inspection.Green Lane : Basically only document inspection. X-Ray inspection at Random. (cargo inspection if any trouble.)

Voice of Users

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3. Logistic Vision Toward 2020(1) Preference of Cilamaya & Tanjung Priok Port

Cargo owners in Eastern MPA mostly prefer Cilamaya, whereas cargo owners in DKI Jakarta andWestern & Southern MPA prefer Tanjung Priok.

Cilamaya PortTj Priok Port

※This analysis is still processing now, so the port choice ratio is subject to change until the final report

Blue: Tanjung PriokRed: Cilamaya

Criteria- On current road situation- On current transport cost

condition

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3. Logistic Vision Toward 2020(2) International Cargo Flow

Present Situation of Logistics Future Situation of Logistics

Source: JICA Study Team Source: JICA Study Team

Legend: Major industrial area

: Sea port

: Main cargo flow (estimated)

After starting operation of Cilamaya port, cargo owners will have much more options to select shipping services and cargo flow is diversified.

“The merit of using Cilamaya is easily predicting lead time to deliver containers. We expect to reduce more cost for stocking which is equivalent to around several million dollars.” (By trading company）

Voice of Users

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4. Next Step

Phase 1 Analysis of current transport and logistics4 5 6 7 8 9 10 11 12 1 2

Study Team will make recommendation for balanced development of Tanjung Priok and Cilamaya Port.

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Related policies, laws, and regulation of transport and logistics and development

Current conditions of land transport infrastructure

Regulation and restrictions related to protection of paddy field and water resources

Forecast on transportation and logistics sector

Identification of bottlenecks in Eastern MPA

Bottleneck of cargo, road, and railway

Issues for strengthening connectivity

Lesson learned through similiardevelopment projects to solve overconcentration

Jointseminar in Japan

Phase 2 Recommendation of Measure to establish Integrated and effective network

Outlines of Key measures for short term & long term

Extra issues related to land use

Necessary facilities to improve new port Development plan

Economic benefits to Eastern MPA

Workshop in Jakarta

Feedback Seminar

in Jakarta