Development of short sea shipping in the north coast of Java Island, Indonesia as a potential market

Abstract

The island of Java is the smallest of the six major islands in Indonesia. It is, however, the centre of national economic activity because 75% of industrial areas are located on this island, accounting for 59% of the national gross domestic product. The movement of goods on the island of Java reached 160.5 million tons, with trucks accounting for 90.3% of the total, contributing to traffic congestion. The ratio of road capacity to traffic volume on various major roads reached 1.3. This study aims to investigate how to reduce this ratio to 0.8 on the roads of Java by developing a short sea shipping transportation route from Jakarta to Surabaya. This study has never been conducted by the Ministry of Transportation of the Republic of Indonesia. According to the findings of the study, the potential cargo for short sea shipping reached 3.98 million twenty-foot equivalent units (TEUs). One of the most suitable types of vessels to be developed is the motorised container barge (MCB), which could operate on 88 voyages per year and have a capacity of 900 or 1,000 TEUs. The freight rate for short sea shipping ranges from $ 447 to $ 458 per TEUs, resulting in a benefit-cost ratio of 1.5 at a load factor of 70%. The freight rate is less expensive than the truck freight rate after adding the cost of trucking to and from the hinterland.