CHAPTER 1

PRELIMINARY

1.1 Background

The port in its activities has an important and strategic role for industrial and trade growth and is a
business segment that can contribute to national development. This brings consequences to the
management of the port business segment so that operations can be carried out effectively, efficiently
and professionally so that port services run smoothly , safe, and fast at an affordable cost. Basically the
services provided by ports are services to ships and services to cargo (goods and passengers).
Theoretically, as part of the sea transportation chain, the function of the port is a meeting place
(interface) of two or more modes of transportation and interfaces of various interrelated interests.
Goods transported by ship will be dismantled and transferred to other modes such as land
transportation (truck or train). Conversely, goods transported by truck or train to the loading port will be
loaded onto the ship again. Therefore various interests meet at ports such as banking, shipping
companies, customs, immigration, quarantine, syahbandar and other centers of activity. On this basis it
can be said that the port as one of the transportation infrastructure can generate economic activity in a
region because it is part of the chain of transportation and logistics systems.

However, if we look at the reality, we must admit that indeed the ports in Indonesia have not been
managed properly. As we all know, two-thirds of Indonesia's territory is in the form of water. Thousands
of islands are lined up from Sabang to Merauke. The position of this country is very strategic because it
is in the crossing of world trade routes. Ironically, Indonesia is unable to take advantage of this golden
opportunity.

As an archipelago, the port's role is vital in the Indonesian economy. The presence of adequate ports
plays a major role in supporting the mobility of goods and people in this country. The port is the most
important means to connect between islands and between countries. However, ironically, the condition
of ports in Indonesia is very alarming. Almost all ports in Indonesia today are out of date.

Of the 134 countries, according to the Global Competitiveness Report 2009-2010, the competitiveness
of ports in Indonesia is ranked 95th, a slight increase from the 2008 position which ranked 104th.
However, Indonesia's position was lost to Singapore, Malaysia and Thailand. The weakness of ports in
Indonesia lies in the quality of infrastructure and superstructure.

Indonesia also lost in loading and unloading productivity, severe congestion conditions, and
management of old customs documents. Global Competitiveness Report 2010-2011 states, the quality
of ports in Indonesia is only worth 3.6, far below Singapore with a value of 6.8 and Malaysia 5 6.

Businessmen have long complained about the poor port facilities in Indonesia. For leaning and loading
and unloading, a ship must queue for days waiting for their turn.

Often, the waiting time to dock is much longer than the time to sail. Seeing the poor condition of the
port, it is not surprising that investors are reluctant to invest in shipping. As a result, the distribution of
goods between islands was stagnant.

The impact continued, the price of goods surged and economic development faltered. The high cost
economy continues to haunt this country. It feels difficult to understand why Indonesia can be 'calm'
witnessing the condition of an outdated port. Many parties are astonished that Indonesia has allowed
this economic inefficiency to last a long time. In the last 30 years, there have been almost no adequate
and significant port infrastructure development projects. In fact, Tanjung Priok Port was once the
flagship in the Asian region.

Due to delays in cargo handling, many ships avoid Tanjung Priok. For export-import purposes, foreign
vessels choose to dock in Singapore and Malaysia. The World Bank also noted that the system and port
efficiency in Indonesia were very bad. This condition clearly exacerbates the price competitiveness of
Indonesian goods. As a result, the potential for foreign exchange evaporated into neighboring countries.

The government must take appropriate steps to correct this serious problem. Because from year to year
there have not been significant improvements to the management of the port.

Therefore, through our paper, we want to identify ways that, if not significantly, can help resolve this
port management problem. We believe that if the port can be managed properly, foreign exchange
earnings for Indonesia will experience better growth as well.

1.2 Problem Formulation

1.2.1 Problem Identification

The purpose of the formulation of the problem to be examined and based on the description that has
been stated in the background of the problem above, the writer will identify the problem as follows:

a. General port management.

b. Port performance in Indonesia.

c. Strategy to improve and develop port performance in Indonesia.

1.2.3 Limitation of Problems

Based on the identification of problems, the problem limits in this study are what steps can be taken to
improve the performance of port management in Indonesia to be more efficient.

3. Principal Problems

a. How is port management in general?

b. How is the performance of ports in Indonesia?

c. How to improve the performance of ports in Indonesia and what are the steps?

1.3 Purpose of Writing

a. To provide an overview of the management of ports in Indonesia in general, as well as their
achievements.

b. To provide a solution to the problems of port management in Indonesia. With the aim to increase
productivity.

1.4 Benefits

a. For writers

To broaden the author's knowledge of port management in Indonesia in general and also to increase
awareness of the development of ports in Indonesia.

b. For Readers

To add insight to readers regarding port management in Indonesia and be able to create critical thinking
about the steps that must be taken to improve the performance of ports in Indonesia.

CHAPTER 2

DISCUSSION

2.1 Theoretical Basis

Port is a place that consists of land and waters around it with certain limits as a place of government
activities and economic activities that are used as a place for leaning ships, anchoring, boarding
passengers and / or loading and unloading goods equipped with shipping safety facilities and supporting
activities port and as a place for intra and inter modes of transportation.

Whereas what is meant by port is covering everything related to port operations and other activities in
carrying out port functions to support smoothness, security and orderliness of ship, passenger and / or
goods traffic flow, sailing safety, intra and place of transfer modes and encourage national and regional
economies.

The types of ports include;

• Public Port is a port that is organized for public service purposes

• Special ports are ports that are built and carried out to support specific activities and generally for the
benefit of certain individuals or groups

• Seaport is a place used to conduct sea transportation services

• The crossing port is a port that is used specifically for crossing activities from one port with another
port that has a connection

• River and lake ports are ports that serve the transportation needs of a lake or river
• Mainland Port is a certain place on land with clear boundaries, equipped with loading and unloading
facilities, stacking and warehouse as well as infrastructure and facilities for transporting goods by special
packaging and functioning as a public port

The purpose and objectives of the national port system where the National Port Order is the basis for
planning the development, utilization, development and operation of ports throughout Indonesia, both
seaports, ferry ports, river and lake ports, mainland ports and special ports aimed at:

• the establishment of an integrated, harmonious and harmonious network infrastructure in order to

compete and not interfere with each other in a dynamic manner

• the occurrence of link transportation efficiency nationally;

• realization of port services in accordance with the level of needs;

• the realization of reliable and highly capable port operations in the context of supporting national and
regional development

in addition, the order of the national port is also required to pay attention;

a. regional layout;

b. national transportation system;

c. economic growth;

d. national and international transportation service patterns / lines;

e. environmental sustainability

f. shipping safety; and

g. national standard, criteria and norms.

Besides that, the party also carries out the following tasks and roles;

a. government;

1) implementing the shipping safety function;

2) implementing customs and excise functions;

3) implementing the immigration function;

4) implementing the quarantine function;

5) implementers of security and order functions;

b. port service business:

1) Main business which includes ship, goods and passenger services;

2) supporting businesses which include leasing warehouses, land and others.

The port is divided into several types according to their hierarchy and function, namely;

a. The international hub port is the primary primary port;

b. International ports are secondary primary ports;

c. The national port is the main tertiary port;

d. Regional ports are primary feeder ports;

e. Local ports are secondary feeder ports.

Each type has its own function and role, all of which are divided specifically, namely;

(1) International hub port which is the primary primary port:

a. acts as an international hub port that serves national and international container transhipment
services with a world scale sea transportation service.

b. acts as the main port that serves national and international container transportation of 2,500,000
TEU's / year or other equivalent transportation.

c. acts as a port of loading of national and international container transportation with services ranging
from 3,000,000 - 3,500,000 TEU's / year or other equivalent transportation.

d. located close to an international shipping line of ± 500 miles.

e. minimum port depth: -12 m LWS.

f. has a minimum container container length of 350 m ', 4 cranes and a 15 ha container stacking field.

g. distance with other international hub ports 500 - 1,000 miles.

(2) International ports which are secondary primary ports:

a. has a role as the center of national container distribution and international container transportation
services.

b. acting as a place for overloading passengers and container transportation.

c. serving container transportation of 1,500,000 TEU's / year or other equivalent transportation.

d. close to the international shipping lane + 500 miles and national shipping lane ± 50 miles.

e. minimum port depth - 9 m LWS.

f. has a minimum container dock of 250 m long, 2 cranes and a 10 ha container yard.
g. distance from other international ports 200-500 miles.

(3) The national port which is the main tertiary port:

a. acting as a national container feeder.

b. acting as a place for loading and unloading of passengers and national public goods.

c. role in serving national container transportation throughout Indonesia.

d. It is close to the national shipping route + 50 miles.

e. minimum port depth - 9 m LWS.

f. having a multipurpose dock of at least 150 m 'in length, a mobile crane or skipgear capacity of 50 tons.

g. distance from other national ports 50-100 miles.

(4) Regional ports which are primary feed ports:

a. role as feeder of international hub port, international port of national port.

b. acting as a place for passengers and goods to be transported from / to the Utarna Port and the
Feeding Port.

c. role in serving the inter-Regency / City link transportation within the province.

d. located near the inter-island shipping lane ± 25 miles.

e. minimum port depth of -4 m LWS.

f. has a minimum dock length of 70 m.

g. the distance to other regional ports is 20 - 50 miles.

(5) Local ports which are secondary feed ports:

a. role as feeder of international hub ports, international ports, national ports and regional ports.

b. acts as a passenger service place in remote, isolated, border, border areas which is only supported by
sea transportation mode.

c. role as a place of service for sea transportation modes to support people's lives and serves as a
multifunctional place in addition to being a terminal for passengers as well as to serve the loading and
unloading needs of the surrounding community's life.

d. located in a location that is not traversed by regular sea transportation except pioneering.

e. minimum port depth -1.5 m LWS.

f. has mooring facilities.

g. distance from other local ports 5-20 miles.

In addition there are several types of special ports, namely:

1. National / international special port.

2. Regional special ports.

3. Local special port.

There are several provisions in its management, namely;

(1) National / international special ports:

a. ship weight served 3000 DWT or more.

b. pier length of 70 M or more, concrete / steel construction.

c. depth in front of the pier - 5 M LWS or more.

d. handle the service of dangerous and poisonous goods (B3).

e. serving cross-provincial and international service activities.

(2) Regional special ports:

a. ship weight served is more than 1000 DWT and less and 3000 DWT.

b. pier length less than 70 M ', concrete / steel construction.

c. the depth in front of the dock is less clan - 5 M LWS.

d. does not handle the service of dangerous and toxic goods (B3).

e. serving service activities across Regency / City in one Province.

(3) Local special ports:

a. ship weight is less than 1000 DWT.

b. the pier length is less than 50 M 'with wooden construction.

c. the depth in front of the dock is less clan - 4 M LWS.

d. does not handle the service of dangerous and toxic goods (B3) and serves cross-town service activities
in one Regency / City.

There are several basic and supporting facilities that must be owned by a port, namely;

a. the waters of the landing include the shipping channel

b. harbor pond

c. ship dock facility

d. load weighing

e. passenger terminal

f. passenger and cargo access to the dock

g. offices for government office activities and services

h. fuel storage facilities (bunkers)

i. water, electricity and communication installations

j. access road and or railroad tracks

k. fire fighting facilities

l. waiting place for motorized vehicles before boarding the ship.

And the supporting facilities are:

a. office area to support the smooth port services

b. waste shelters

c. business facilities that support port activities

d. port development area.

In addition, the crossing port classification is divided into 3 (three) classes, namely:

a. harbor crossing class I

b. class II crossing port

c. class III crossing port.

1. Determination of class I ferry ports:

a. Transport Volume:

1) passengers> 2000 people / day;

2) vehicle. > 500 units / day;

b. frequency> 12 trips / day;

c. docks> 1000 GRT;

d. operating time> 12 hours / day;

e. basic facilities at least include:

1) the waters of the landing, including the shipping channel;

2) port pond;

3) ship berth facilities;

4) cargo weighing facilities;

5) passenger terminal;

6) passenger and goods access to the pier;

7) offices for government offices and services;

8) fuel storage facilities (bunkers);

9) water, electricity and communication installations;

10) access roads and / or railroads;

11) fire fighting facilities;

12) waiting area for motorized vehicles before boarding the ship.

2. Determination of class II ferry ports:

a. Transport Volume:

1) passengers: 1000 - 2000 people / day;

2) vehicles: 250-500 units / day;

b. frequency of 6 -12 trips / day;

c. pier 500 - 1000 GRT;

d. operating time of 6 -12 hours / day;

e. basic facilities at least include:

1) the waters of the landing, including the shipping channel;

2) port pond;

3) ship berth facilities;

4) cargo weighing facilities,

5) passenger terminal;

6) passenger and goods access to the pier;

7) offices for government offices and services;

8) fuel storage facilities (bunkers).

3. Determination of class III crossings:

a. Transport Volume:

1) passengers <1000 people / day;

2) vehicles <250 units / day;

b. frequency <6 trips / day;

c. dock <500 GRT;

d. operating time <6 hours / day;

e. basic facilities at least include:

1) the waters of the landing including the service flow;

2) Harbor pool;

3) ship berth facilities;

4) cargo weighing facilities;

5) passenger terminal,

6) passenger and goods access to the pier;

7) offices for government office activities and services.

In its management, ports are also classified into mainland ports. The mainland port has a role as a
container terminal for the collection and distribution of goods on land which are connected to the
parent port by road or railroad.
Land port according to its classification, developed by taking into account:

a. class of its main port;

b. road and / or railroad network;

c. hinterland coverage;

d. traffic activities in the mainland port;

e. the frequency of transportation activities from the mainland port to the parent port or vice versa;

f. have facilities:

1) loading and unloading;

2) stacking yard;

3) warehouse;

4) infrastructure and means of transportation of goods;

5) equipment / equipment for packaging; and

6) port operator office.

Mainland ports are classified into 3 groups, namely:

1. Class I Land Port

a. volume of goods / container transportation> 20,000 TEUs / year

b. terminal area> 3 Ha

c. stacking area> 8,000 m2

d. stacking capacity> 1,000 TEU's

e. export warehouse> 450 m2

f. import warehouse> 450 m2

g. mechanical hangar> 350 m2

h. office building> 400 m2

i. loading and unloading area and trailer / heavy equipment traffic> 6,000 m2

j. runway length gantry crane> 250 m2

k. length of railroad for loading and unloading.

2. Class II Land Port

a. volume of freight / container transport <12,000 TEU's / year;

b. terminal area <2 Ha

c. stacking area: 5,000 - 8,000 m2

d. stacking capacity of 750 - 1,000 TEU's

e. export warehouse: 300-450 m2

f. Import warehouse: 300-450 m2

g. Mechanical hangar: 250-350 m2

h. office buildings: 250 - 400 m2

i. bonkar loading area and trailer / heavy equipment traffic> 6,000 m2

j. runway length gantry crane: 200-250 m2

k. length of railroad for loading and unloading.

3. Mainland Class III Port

a. volume of freight / container transport <12,000 TEU's / year;

b. terminal area <2 Ha

c. stacking area <5,000 m2

d. stacking capacity <750 TEU’s

e. export warehouse <300 m2

f. imported warehouse <300 m2

g. mechanical hangar <250 m2

h. office building <250 m2

i. cargo load area and trailer / heavy equipment <3,000 m2

j. gantry crane runway length <200 m2

k. length of railroad for loading and unloading.

In terms of management authority, the port is managed with several types of management according to
their function and hierarchy. The local seaport organized by the Government (Technical Implementation
Unit / Port Work Unit), is handed over to the Regency / City Government at the location of the seaport
as a decentralization task. Then regional seaports held by the Government (Technical Implementing
Units / Port Work Units), delegated to the Provincial Government at the location of the seaport are
located, as a decocentration task. For small-scale ports such as river and lake ports, the Regency / City is
implemented by the Regency / City Technical Implementation Unit or Regional Port Business Entity.
Whereas for the port that functions as a ferry port is carried out by the Government, the
implementation is handed over to the State-Owned Enterprises or by the Regency / City which is carried
out by the Regency / City Technical Implementation Unit or Regional Port Business Entity.

There are several conditions that must be met in terms of port management, namely;

a. The port must be located at a location that can guarantee the security and safety of shipping and can
be developed and maintained according to applicable standards;

b. The port must consider the ease of achievement for users;

c. Ports must be easily developed, to meet the increasing demand for sea transportation services;

d. The port must guarantee long-term operation;

e. Ports must be environmentally sound;

f. Ports must be economically affordable for port users and operators.

2.2 Port Management Performance in Indonesia

Port management in Indonesia can be said to be still not encouraging, let alone boast. There are still
many less professional management of port managers, which in this case is the government. There are
still many shortcomings that can be identified by stakeholders in this port area.

In addition to these shortcomings, there are several common problems that often arise in the context of
port management. These problems include:

1. The length of the loading and unloading process in ports in Indonesia

2. The duration of customs clearance in Indonesia

3. Poor quality port facilities

4. The length of waiting time at ports - ports in Indonesia

5. Depth of ports in Indonesia that do not meet requirements

In fact there are still many problems that can be identified from port management. But the 5 problems
above are common problems that often occur in terms of port management in Indonesia.

The entrepreneurs as the party who most often use the port's services often complain about the poor
facilities and infrastructure of the ports in Indonesia. One example is the port of Tanjung Priok. As
mentioned earlier, entrepreneurs whose goods are transported through containers through the port of
Tanjung Priok often face a long process of loading and unloading at this port. Due to delays in cargo
handling, many ships avoid Tanjung Priok. For export-import purposes, foreign vessels choose to dock in
Singapore and Malaysia. The World Bank also noted that the system and port efficiency in Indonesia
were very bad. This condition clearly exacerbates the price competitiveness of Indonesian goods. As a
result, the potential for foreign exchange evaporated to other countries neighboring Indonesia.
Another problem that often arises in terms of port management in Indonesia is the length of time for
customs clearance in Indonesia. This causes the low interest of investors whose activities are mostly
related to ports to enter Indonesia. They are reluctant to deal with the Indonesian bureaucracy which is
very complicated. Another reason is because they are aware, with an increasingly convoluted
bureaucracy, it will affect the stability of their products. Because they inevitably they will definitely
calculate the costs of Indonesian bureaucracy into their products, which is certainly a waste and do not
add any value to the products they sell.

In addition, the problem of the poor facilities available at Indonesian ports is also a general problem,
which until now has not been resolved.

Many port facilities in Indonesia are old and also not functioning properly because they are not
maintained properly. This of course greatly affects the operation and image of ports in Indonesia.

When compared with our closest neighboring country, Malaysia, Indonesia is far behind in terms of the
availability of adequate port port facilities.

One of the inadequate Indonesian port facilities is the depth of the port or deep see port in Indonesia.
Most ports in Indonesia cannot maintain sea level to 14 meters or more so that they cannot meet the
criteria of a sea port. As a result, ports in Indonesia only feed the ports of several neighboring countries.

The above problems cause port management to be ineffective. This results in a long waiting time for
ships to lean on ports in Indonesia.

The government is currently required to immediately correct this problem. Because ports have a very
important role and function in the movement and growth of a country's economy.

2.3 Strategy for Improving Port Performance in Indonesia

To improve the performance of ports, the government needs to take concrete steps in resolving the
problems faced by Indonesian ports as soon as possible.

There are several ways that can be used as an alternative to solving this problem. But before we have to
determine in advance the priorities of the development of existing ports. Of all the problems mentioned
above, the most important problem to be solved first is the improvement of the existing facilities at the
port. The first step is to revitalize major ports in Indonesia. At least, the government must seriously
develop 10 main ports such as Belawan, Tanjung Priok, Tanjung Mas, Tanjung Perak, Bitung, Pontianak,
Pangkalan Bun, Panjang, and several ports that have strategic positions. With a pool depth of only about
13.5 meters, the Port of Tanjung Priok is only able to accommodate small and medium ships. The vessels
are generally feeder ships from ports in Singapore, Malaysia and Hong Kong. During this time, 80-90% of
Indonesia's export-import activities must go through ports in other countries.

With the improvement of facilities at the 10 main ports, it is hoped that the economic potential of
Indonesian ports will not "evaporate" to other neighboring countries.

Of course this needs to be supported by large capital. To develop Tanjung Priok port, as a manager, PT
Pelabuhan Indonesia (Pelindo) II claimed to require an investment of around Rp 22 trillion. Such large
funds are needed to widen the terminal to be carried out in three stages. But the investment value is
relatively small compared to the benefits that will be obtained in the future. This figure is much smaller
than the balance of payments deficit of Indonesia from the shipping sector which reaches US $ 13 billion
per year.

In terms of repairing port facilities, in this case the port pool, shipping entrepreneurs propose to the
government to deepen the port pool in Indonesia up to 16 meters. Thus, this port can accommodate
ships with 6,000 TEUs. With the improvement of the port ponds, entrepreneurs believe that the port
manager can increase the loading and unloading productivity to 20-25 container boxes per hour per
crane.

If repairs (port pools) can be carried out evenly at least in 10 major ports in Indonesia, it is certain that
the productivity of Indonesian ports will also increase.

Another problem that needs to be taken seriously is the length of customs management at ports in
Indonesia.

Indonesia is indeed synonymous with convoluted bureaucracy, which opens opportunities for unethical
practices such as corruption.

These things have really reduced the added value of ports in Indonesia. With this in mind, entrepreneurs
(especially foreign investors) prefer to make ports in Indonesia a place for their feeder vessels. They
prefer to place their main ships in ports in countries such as Singapore and Malysia because the
administrative management there is much more efficient and effective. It is time for Indonesia to take
advantage of the economic potential that should be his.

Steps that need to be taken to solve this problem is to change the administration system at ports in
Indonesia. Ports in Indonesia have a slow performance in terms of administration because there are too
many files and also bureaucrats that must be passed before the system runs.

This problem can be overcome by equipping ports in Indonesia with an adequate information system.
Then it is necessary to evaluate the proportionality of management at the port. If we want to speed up
the running of a system, one way is to simplify the process of the system without ignoring its essence.
Therefore bureaucratic practices must be immediately removed to improve port performance in terms
of time management. But the most important thing to note is the development of human resources at
ports in Indonesia. This is important because, do not let the downsizing of the labor force at the port
actually reduce the level of productivity of the port itself. Therefore a skilled workforce is needed, in the
right amount, to carry out the functions and duties of port management. Of course the development of
skills in the use of information-based technology and technical ones is a priority. Because this is what
can encourage productivity.

But the port problem in Indonesia is a complex matter. The seriousness of each stakeholder is needed to
improve port performance. In addition, precise measurements are needed for each strategy
implemented. So that the large capital used to build the port can be accounted for later.

The government of course plays an important role for this. The government must act as a supervisor
who periodically monitors the application of all agreed and implemented strategies. Because in general,
even though it has been formulated very well, each existing strategy becomes chaotic when
implemented. This is of course due to lack of coordination. It is hoped that the government can carry
out this role well, not only worsen it.
CHAPTER 3

COVER

3.1 Conclusions

Port management is a very complex matter. Even though the government has very well established its
management provisions, the problem still persists. This is generally due to lack of capital to develop the
existing port. So that it causes poor port management, such as poor port facilities.

The port achievements in Indonesia are also not encouraging. We are still far behind when compared to
other Southeast Asian countries such as Singapore and Malaysia. Therefore we need to catch up with
our backwardness.

The first step that can be done is to improve basic facilities from the port, which have always been
complained of. Government participation is very important to ensure that this works as it should.

With this awareness in mind, there will undoubtedly be created a pattern of sustainable port
development, capable of improving port performance in Indonesia. But once again we emphasize, the
planning and supervision stages are factors that greatly influence the realization of this.

It is unrealistic to expect Indonesia to be able to compete with Singapore or Malysia in terms of port
quality. However, we must remain optimistic, ports in Indonesia will one day have proud achievements.

3.2 Bibliography

Maritime News. 2007. "Support Trade - Port Revitalization Needs" in http://www.beritamaritim.com,

accessed March 18, 2011.

Regional Secretariat Public Relations. Belitung Regency. 2008. "Tanjung Padan Harbor Master Plan" in
http://www.belitungkab.go.id, accessed March 16, 2011.

Investor Daily. 2011. "Irony of Ports in the Archipelago" in http://www.investor.co.id, accessed March
16, 2011.

Compass. 2008. "Indonesian Port Transportation" in http://www.pksplipb.or.id, accessed March 17,

2011.

Minister of Transportation. 2002. National Port Order - Decree of the Minister of Transportation
Number KM 53 of 2002.