Evaluation of Container Terminal Efficiency Performance in Indonesia : Future Investment

Indonesia is one of the biggest archipelagic countries in the world and its strategic location between the Indian Ocean and the Pacific Ocean makes maritime sector of great importance. It can be seen from the volume of containerized cargo, which is increasing gradually at the rate of around 7.7% each year. Implementation of domestic law No. 17/2008 on Shipping, eliminates the monopoly power of Pelindo as the main terminal operator and allows new-comers to compete in port business. However, in order to maintain its competitive position as the main terminal operator, Pelindo should maintain its efficiency as that is one of its key success factors. This research uses three types of analyses: demand analysis, efficiency measurement analysis, and supply analysis for 18 container terminals in Indonesia using both time series and cross section data. A demand analysis is conducted by a container throughput projection for every 5 years using a GDP multiplier method, which is based on container throughput and GRDP from 2009 to 2013. The efficiency measurement analysis utilizes a non-parametric method, called Data Envelopment Analysis (DEA) that is based on the conditions of 2014. The DEA Constant Return to Scale (CRS) model with input oriented version is used for the measurement of the efficiency performance applying Stata software. Seven input variables are taken namely container yard area, maximum draft, berth length, quay crane index, yard stacking index, vehicle, number of gate lanes and throughput as an output. A port is categorised as efficient, if the outcome equals 1 and inefficient, if it is less than 1. Container terminal supply is evaluated using berth capacity and yard capacity. Berth capacity in TEU/year is calculated by multiplying berth lenght (m) by berth capacity per meter length (TEU/m). Berth capacity per meter lenght is assessed by multiplying call size (moves) with the berth occupancy ratio of each port and Teu factor. Yard capacity in TEU/ year is quantified by multiplying container yard capacity (TEU) by yard maximum utilisation (%) divided by separation factor (%), peaking factor (%) and dwelling time (days). Both throughput as a demand and as a supply capacity will be combined to assess the time when the bottleneck condition occurs. The results show that total throughput projections for 2020, 2025, and 2030 are 23 million TEU/year, 37 million TEU/year, and 58 million TEU/year respectively. In this case, the biggest contributors are Tanjung Priok Port and JICT (23% and 26%). Moreover, by looking at its efficiency score which is equal to 1, it reveals that 7 out of 18 terminals are efficient, namely, Tanjung Priok, JICT, Tanjung Perak, TPS, BJTI, Makassar Port, and UTPM. Furthermore, by looking at their capacity, it appears that 12 out of 18 container terminals carry over 80% of the current demand. Surprisingly, Tanjung Perak has the highest ratio, followed by Tanjung Priok, JICT, KOJA, and TPS. Finally, supply and demand analysis assesses the appropriate time for investment as an indicator of congestion issues. It appears that 7 out of 18 container terminals are not only identified as efficient container terminals, but are also indicated as having the worst congestion conditions. Therefore, in the future, they should tackle the bottleneck issues and consider infrastructure investments to alleviate these congestion bottlenecks.