Economic and Trade Growth, Transport and the Latest Trends and Challenges in Port Development. Economic Growth.

the increase in the volume of goods and services produced by an economy is a factor in an increase in the income of a nation. Measured as the percent rate of increase in real gross domestic product,or GDP, it is key part of countries macroeconomic policies. Because with it comes the benefit of an increase in the standard of living, of higher employment stimulation i.e. higher utilisation of economy's resources, including labour. Indonesia Economic and Trade Growth Central Statistic Agency BPS trade data on February 2005 revealed strong exports and imports in non-oil and gas commodities that Indonesias economy grew 5.13 percent in 2004, higher than 4.8 percent forecast. Of total imports in 2004, within the non-oil and gas imports category, capital goods imports increased 41.3 percent, indicating a strengthening economy. Trade, the Driver of Growth The World GNP rose from U$1.3 trillion in 1960 to more than U$33 trillion by 1999, while the global trade to GDP ratio increased from 29% to more than 45% over the same period. World GNP is expected to grow at about 3% p.a. over the next decade, with trade continuing to grow at between 6% and 7%. Logistics --the organisation of supplies and services for any complex operation -- has always been the driver of increased trade, with transport its largest cost component. Worldwide logistics costs exceed U$1 trillion, of which U$390 billion is transport. Reducing cost, improving the quality of logistics and transport systems improves international market access and leads directly to increased trade, to higher incomes and the scope for significant reductions in poverty. Indonesia and some neighbouring countriess progress on logistics has not managed to keep pace with its growth in trade. They face daunting problems in addressing the logistics constraints. Transport Response Has Been to Reduce Costs and Time The development of containerized transport has allowed large cost reductions in cargo handling, in increasing cargo transshipment. In turn, this has induced the creation of hub ports that allow countries/ regions to take advantage of increasing return to scale and substantial reduction in transit time. The cost to move a container from East Asia to US has reduced 50% in the last ten years as shipping companies continue to seek economies of scale in a tight competitive market, making vessels able to carry 5000 to 7000 TEUs commonplace on the major Asia America routes. Constraints to Transport Cost Reduction Land access costs remain high e.g.: Transport to the US West Coast of a container from an inland province of China to Shanghai makes up more than half the total transport cost

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For these movements, logistics costs can be up to 60% of FOB export value, compared to averages of 15% in Europe and 11% in US

Role of Government in Transport and Logistics A comprehensive policy agenda that extends broadly to stimulating the evolution of transport services, promulgating product standards, licensing imports, and encouraging foreign investment; To create the infrastructure and conditions under which operators can best provide services; Transport networks with seamless links to national and global markets; Information infrastructure to facilitate inter-modal services; Reduced traffic congestion, better land access and efficient spatial development; Enhancement of human resources, institutional reengineering to meet changing market environment. Maritime Issues While the capacity of the container fleet on the East Asian routes increased at more than 20 percent a year between 1980 and 2000, the capacity of container berths to handle those ships increased at less than 8 percent p.a. Countries are responding to the shortage by adding new berths, converting general cargo berths to container handling, and developing new ports. Increased trade volumes have led liner services to introduce large container ships that require deeper access channels, which can often only be provided by voluminous dredging. Ports in river estuaries may become less competitive than coastal deep-water ports (such as Jakarta). Joint Venture of PT. (Persero) Pelabuhan Indonesia II and HPH in JICT Has Sucessfully Added the Necessary Facilities Complying with Characteristics of a World Container Port Wide access channels (thanks to Pelindo as port authority) Berth alongside depth of up to - 14 metres; Newly constructed deep-water berths dedicated for larger carrier serving direct services to Europe, Middle East and Africa; Super Post Panamax Cranes 50-60 metres (18-22 box across) om outreach; New equipment to better handle yard operations such as Rubber Tyred Gantry Cranes (RTGCs), Reachstackers, Head Trucks and Chassis Pavement of new container yard to support yard operations Good/fast handling speeds with optimum crane ratios Tailor made I.T. technology (Container Terminal Management System CTMS) for greater accuracy and efficiency and EDI for data exchange with other related parties Port Developments In The Emerging Asian Countries Global trades impacts on shipping demand across all regions.

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Larger shipping lines require even larger container terminals to build their hub-ports. The world container traffic reached 200 milion TEUs in 1999, with the bulk of increase (53 %) recorded in Asia. Evolution is taking hold in some Asian ports. Emergence of new rules and new competition resulting in: competitive pricing, port privatisation, strategic partnerships between public and private sectors; JICT under HPH/ Pelindo II is well on the way toward fulfilling these trends in port development. An important step for the country in establishing an efficient and effective National Hub Port to cater the demands for the countrys economic growth as well as anticipate further growth due to globalization. Today, the Port of Tanjung Priok plays important role as the largest port in the country. Many improvements have been made but many more are needed. The support from the Government and key stakeholders is vital to allow the Port of Tanjung Priok to achieve Hub Port status for the nation thus serving as the nations main gateway to the international market.

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