International Port: Transportation Ministry Chooses Kuala Tanjung

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 - International Port: Transportation Ministry Chooses Kuala Tanjung

29 September 2022

By: Anitana W. Puspa & Hendra Wibawa

 

The Transportation Ministry has established Kuala Tanjung Port in Batu Bara Regency, North Sumatra, as a transhipment port that can accommodate large vessels from various countries.

Transportation Ministry’s Director General of Sea Transportation Arif Toha stated that a transhipment port is an export hub where cargo from small vessels from every direction is transhipped to large vessels docking at Kuala Tanjung Port to be sent abroad.

“Kuala Tanjung Port is projected to acquire a portion of the existing transhipment market in the Malacca Strait with a 5% market share,” he said on Tuesday (27/9).

According to him, Kuala Tanjung Port applies the concept of a self-generating port where its cargo is sourced from its own area.

Moreover, the cargo will be produced by industries situated in the industrial areas that are integrated with Kuala Tanjung Port.

Currently, Kuala Tanjung Port is managed by Port Authority and Harbourmaster’s Office 3rd Class Kuala Tanjung as the organiser and PT Pelabuhan Indonesia (Persero) as the operator.

He emphasised that Kuala Tanjung has a strategic location as it is one of the main global trade routes.

In addition, Kuala Tanjung Port will be connected to the Trans-Sumatra Toll Road that is currently being built as well as a railway, which will facilitate connectivity from and to the port.

Kuala Tanjung Port is planned to collaborate with Belawan Port that will serve as a container consolidator in the northern Sumatran hinterland, including Medan, Aceh, and North Tapanuli.

Kuala Tanjung Port will particularly serve as a logistics and supply chain hub in Indonesia.

According to him, Kuala Tanjung is developed in stages, starting from the construction of a Multipurpose Terminal that functions as North Sumatra’s gateway.

The development of industrial areas in Kuala Tanjung will drive the cargo of the Multipurpose Terminal, generating an optimal cargo volume as the basis for a hub port development.

Kuala Tanjung Port development phase I, namely Kuala Tanjung Multipurpose Terminal, has been operational. The port managed by Pelindo is equipped by a 500x60 m dock and a 2.8 km trestle for four truck lanes spanning 18.5 m wide.

Currently, Sei Mangkei Special Economic Zone (SEZ) and other industrial areas have been operational in North Sumatra.

He expects these industrial areas to utilise Kuala Tanjung Port as a centre for goods distribution to support Kuala Tanjung Port’s role as a hub.

In addition, several large companies are also operating around Kuala Tanjung Port, namely Wilmar, PT Domas Argointi Prima, PT Industri Nabati Lestari, Unilever Oleochemical Indonesia, PT Sumatra Tobacco Trading Company, and PT Toba Pulp Lestari.

Cargo flow

Meanwhile, the Indonesian National Shipowners’ Association (INSA) Central Executive Board Chairperson Carmelita Hartoto views that Kuala Tanjung Port’s success as a transhipment port relies on the facilities and ease that can be offered to the exporters and importers.

She believes that the appeal of a transhipment port depends on the cargo flow.

This aligns with a shipping principle that says “the ship follows the trade”, so success will heavily depend on the facilities and ease that Kuala Tanjung can offer the exporters and importers.

“In shipping, we follow the flow . Where cargo flows, we can make a call,” she said on Wednesday (28/9).

To realise Kuala Tanjung as a hub, she believes it is important to encourage the main line operators (MLO) to carry international cargo.

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