INSA raising eastbound freight rate 25%

INSA's hike on freight rate shocking ILFA
INSA's hike on freight rate shocking ILFA

Private shipping operators grouped in the Indonesian National Shipoweners Association (INSA) are raising container freight tariffs to eastern Indonesia by 25%.

JAKARTA (infologistic): Chairman of the Indonesian National Shipowners Association (INSA) Carmelita Hartoto said, the reason employers raise tariffs because the tariffs set previously were too low.

“It’s been up since early September, up 25% because the yesterday was very low,” he told Bisnis.com on Saturday (16/09/2017).

Previous shipping companies reduced tariffs to the eastern region by up to 30% due to sea toll programs.

However, the tariff reduction seems to have little effect on the logistics cost because the goods owner does not lower the tariff.

Previously, INSA has offered to the government to use private vessel in sea toll program. Thus the government does not need to spend the state budget to buy or build a ship.

The government is sufficient to provide long-term contracts or subsidize both pioneer and PSO (public service obligation).

Private entrepreneurs are only releasing subsidies provided by the government if the areas passed by these subsidies have become commercial areas.

As is known, the sea toll tariffs are subsidized by the government. Total subsidies disbursed for sea freight transport this year reached Rp380 billion.

The total fleet owned by INSA members reaches 20 thousand ships and serves approximately 57 large and small ports throughout Indonesia. (ac)

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