Research Article: 2021 Vol: 24 Issue: 3
Elfrida Ratnawati, Trisakti University
Mellisa Towadi, Gorontalo State University
Januardo SP Sihombing, Trisakti University
Endang Pandamdari, Trisakti University
Activities at the port must be regulated by service management and regulations related to activities carried out at the port. This article examines the role of services and the implementation of port-related regulations in Indonesia. The method used in this study is a normative legal research method analyzed descriptively from various sources of literature related to port development in Indonesia. The results showed that the policy's implementation had not been implemented optimally and the limited human resources who perform the field's performance so that the performance is not optimal. Therefore, cooperation between existing human resources in implementing policies is very important to increase ports' contribution to improving the national economy, where ports are development accelerators that spur Indonesia's socio-economic activities. Indonesian ports must regulate their performance by improving performance-supporting facilities and infrastructure, such as loading and unloading goods and services. Port development requires a large investment, but port managers are advised to invite domestic or foreign investors to provide investment in the context of port development if the available funds are insufficient.
Keywords: Opportunities, Challenges, Port, Indonesia, Regulatory.
As an archipelagic country, Indonesia, which consists of 17,258 islands with two-thirds of the sea, should receive a good response in the development of transportation infrastructure, especially sea transportation (Putri, 2015), apart from being a means of connecting one island to another island, it is also a driving force for the movement of social and economic activities in an area in the form of exports and imports of goods and other activities. The area is a port (Yossa & Zunaidah, 2013). Port is a place consisting of land and waters around it with certain boundaries as a place for government activities and economic activities that are used as a place for ships to dock, board, and disembark passengers and/or load and unload goods equipped with shipping safety facilities and port support activities. As well as various places of transfer between intra and between modes of transportation (Radhika, 2012). Every ship carrying out transportation, whether goods or people are being transported, definitely needs a port. As is well known, the port functions as a berth for ships, both domestic and foreign ships. Besides, it also functions as a place for passengers to get on and off and load and unload goods (Sari, 2020). The port's various functions are so many, it is clear that the activities that occur at the port every day are clear (Nirmala, 2017).
In serving the needs of its customers, the port of Indonesia has not been optimal, this can be seen from the queue of ships (Pelindo, 2016) which indicates a slowness in performance, which results in work results, that is the low performance of port workers (Nugroho, 2016), which of course results in delays in the delivery of the goods to the recipient of the goods. This is the cause of congestion or a situation in a warehouse or port where cargo or ships cannot enter or leave the warehouse or port because the outflow or entry is not balanced with smooth procedures (Pelindo, 2016). The Port of Indonesia is experiencing the worst dwelling time or ship waiting time for loading and unloading in Southeast Asia. This is suspected to be due to complicated regulations and the lack of coordination of a number of stakeholders at the port. Besides, due to the geographical location of the port (Nugroho, 2016).
Ships and ports in their activities have mutual relations as the main link in the marine transportation industry. To get to economical sea transportation, efficiency is needed to plan and manage the operational activities of ships and ports, without neglecting the role of other elements. If these two elements' efficiency is guaranteed, namely ships and ports, then costs in sea transportation will be kept as low as possible in the prevailing trade structure (Miftach & Pasek, 2018).
There are many complaints from consumers as port service users that port services in Indonesia as a company engaged in the service industry are not professional and have not been maximized. For example, at the Port of Tanjung Priok, ships that will carry out loading and unloading still have to wait a minimum of 2 (two) days for loading and unloading technical and administrative preparation (Sumardi, 2020). Even for other ports, that is Belawan, the port in Pontianak, West Kalimantan, shipping companies complained about the queue of ships to dock at the pier, which could take three to five days and this situation caused losses, and the cause was the ineffective crane readiness of the loading and unloading activities due to the age of the tool is quite old (Lubis, 2019).
Operators' delays at port terminals are always detrimental to shipping companies because there is no guarantee of ship docking. Often ships have to wait for days, which results in high costs at the port, and the loading and unloading costs at the Port of Indonesia are notoriously expensive. Up to now, the efficiency of the operation of ports in Indonesia is still relatively poor. Besides, port operational performance has not been able to meet the standards set by the government. Indicators of poor port performance can be seen from long waiting times for ships and guidance services, low ship effective times, and low loading and unloading productivity, resulting in high costs incurred. Even ship services at Indonesian ports are considered very bureaucratic so that every day, as happened at the Tanjung Priok port, it causes queues of ships outside and the port (Putri, 2015).
The result is feared if Indonesian ports experience congestion, and this has happened in the past (Aulia, 2011). Congestion is the worst conduit level for a port because the negative impact is far-reaching, both on the smoothness of shipping and trade traffic (national and international) (Aulia, 2011), as well as to the economy of the country concerned. Delays or waiting too long at the port (port delays) are very scary things for ship owners or entrepreneurs (Supply Chain Indonesia, 2016).
The main causes of congestion or delays at ports (delays), that is (Desfika & Lumanauw, 2015), low productivity of the port concerned; less port planning and facilities; labor performance slows down work; there is no cooperation between the 2 (two) elements implementing and executing port activities, among others, the transportation party in arranging the loading and unloading of goods; tortuous procedures for completing the required documents.
To perform its role effectively and consistently in the national economy, the maritime sector must have a broad, hierarchical port system, where all ports are designed, developed, and operated in a manner conducive to carrying out their respective roles in the hierarchy in a full, effective manner, and efficient (Setiono, 2010). One thing that must be considered in supporting the smooth operation of sea transportation in a port is loading and unloading goods from one link to another. The weakest link precisely determines this chain's strength, and it is endless. It will move as fast as the slowest moving part.
Thus, the weakness of one chain will result in a chain reaction. If the weak link in the chain is a port, then the chain reaction that occurs can be in the form of an increase in the volume of goods flow or a decrease in port productivity which will result in queues of ships waiting for the dock (Putra & Djalante, 2016). Therefore, many efforts are currently being made by the Government to improve port performance, including maintaining the stability and balance of the service market through a proportional regulatory mechanism for both the benefit of operators and the user community, reducing excess additional costs that arise from the government, which actually good, but in fact it actually adds to port operations and business expenses (Ardhitia, 2019).
Indonesian ports can also not compete with Singapore ports, which are currently still used as transshipment ports. This is because the Singapore port focuses on seaport facilities, which are utilized by seaport service users. Indonesia experiences a waste of around UD $ 850 million per year due to additional transshipment costs to Singapore ports. Meanwhile, Indonesia's national ports and national shipping are still as Feeder Port and Feeder Vessel (supporting port) (Idris, 2017).
One of the reasons for a country to be categorized as a developed country is that it is seen from its world-class national logistics system, which can be seen from its logistics performance index. A world-class national logistic system will not be realized if it does not start from managing its world-class ports or terminals, and it will never be realized if it does not start from good, effective, and efficient services. PT. Pelabuhan Indonesia (Persero), which is divided from I to IV according to region, is committed to continuously improving healthy performance and sustainable growth. The enactment of Law no. 17 of 2008 concerning Shipping increasingly opens competition in port management. Various aspects related to service quality need to be improved in terms of quality and quantity, both from the internal side, namely from compliance with procedures, and from the external side, namely feedback from customers. Customer satisfaction will be achieved if the company can provide quality service and following customer expectations. Customer loyalty is a behavioral impetus for using products/services repeatedly. And to build customer loyalty to a product/service produced by this business entity, it takes a long time to go through a process of using the product/service over and over again (Aulia, 2011).
Every activity carried out by a port should become land for the largest foreign exchange earnings because it is one of the important elements that can help the state's needs to meet the people's welfare. However, based on data from the Central Bank of Indonesia, namely Bank Indonesia, revenue from services originating from port service activities is only approximately 5%. The facts that have been presented above have become common problems in national ports. The Indonesian government does not want to allow ports to deteriorate due to various obstacles. For services to remain prime, the Government continues to cut service time and procedures, which are deemed inefficient and time-consuming (Miftach & Pasek, 2018). Based on the explanation above, this encourages the researcher to write in-depth about the importance of re-service Indonesian ports to smooth the supply chain. Performance is better, and the results are superior, so that goods arrive at consumers quickly, effectively, and efficiently-performance of Indonesian ports.
Port Duties and Functions
The important role of ports is as a chain of transportation for goods and services to consumers or users. The factor that determines the cost of sending these goods and services is the logistics costs incurred in chain activities at the Port. Realizing the importance of ports as one of the supporting factors for the smooth running of sea transportation, the Government regulates ports in Law Number 17 of 2008 concerning Shipping Jo. PP Number 69 of 2009 concerning Ports, and other regulations issued by the Minister of Transportation and the Directorate General of Sea Transportation of the Republic of Indonesia (Adam & Dwiastuti, 2015).
The regulation regulates the formulation of duties and authorities of each implementing activity and policy, formulating norms, standards, procedures, and criteria, providing technical guidance and supervision, as well as evaluating and reporting in the field of port development planning and structure, designing and building port facilities, dredging and reclamation, ship guidance and delay, port services, and operations (The Minister of Transportation, 2017) (Indonesia's port development plan is the government's main plan because it is aware of the importance of port activity performance that requires facilities and infrastructure to support economic growth. The following is a table regarding the recapitulation of port location plans; from 2022 to 2037, it is planned to build 1322 ports and 55 terminals as part of the port (The Minister of Transportation, 2017).
To support the smooth operation of activities related to the implementation of port functions, security and orderliness of the flow of ship, passenger and/or goods traffic, sailing safety, as well as places for intra and/or intermodal transfer, carried out in coordination between government activities and service activities at the port. Implementation of Government Activities at ports includes shipping safety by the Port Administrator; Customs and Excises; Immigration; Animal and Plant Quarantine; and Security and Order. Meanwhile, the management of port services is carried out by PT (Persero) Pelabuhan Indonesia as a state-owned company which is divided into four management areas, namely I-IV covering Medan, Tanjung Priok, Tanjung Perak, and Makassar, as confirmed in article 33 paragraphs (1) and (2). PP NO. 69 of 2009, while the delegation of port services to a Port Business Entity, namely PT (Persero) Pelabuhan Indonesia is regulated in Law no. 17 of 2008 concerning Shipping jo PP No. 69 of 2009 (Yossa & Zunaidah, 2013).
The strategic port function plays a very important role in supporting and strengthening the development currently being carried out by the Indonesian government. A seaport is one of the links in the seaport sub-sector that has played a role not only as infrastructure and means to smooth the flow of ship, goods, animals, and passenger traffic both between islands and abroad but also plays a role in advancing Indonesia's economic growth (Gateway Port). As confirmed in the Law on Shipping; A port is a working environment equipped with berths and berths of ships for the loading or unloading of goods and passengers from one mode of sea transportation to another mode of transportation or vice versa (Nirmala, 2017).
So far, the interest in Indonesian ports has been confirmed in the research report that shows the quality of services provided by Indonesian ports is ineffective and inefficient, causing a high-cost economy. Current thinking, how to find solutions to improve port services to compete with foreign ports' performance because, currently, it has entered globalization, where competitiveness, efficiency, and effectiveness are the main points that must be pursued. Port functionalization is necessary for Indonesian ports to improve their performance to be effective and efficient because it will increase the national economy (Herdian, 2019).
In providing services to the community who use port services, they are faced with several obstacles that have a huge effect on the smoothness of their services. As for the problems faced, among others (Setiono, 2010; Yamanie & Syaharuddin, 2016); Low productivity and competitiveness, this is due to facilities as infrastructure for carrying out activities at the port; Limited loading and unloading facilities and equipment to support activities at the port; also lack human resources; TKBM and PBM readiness is not sufficient in using loading and unloading equipment; Performance of the Port services management from the perspective of government agencies and Pelindo; Regulations as a support for implementing port activities not as well as culture or bad behavior habits carried out by the organizers of port function activities.
A port's very important task is to provide services to ships that will lean on to carry out activities such as loading and unloading, loading and unloading passengers, and others. The services of Indonesian ports seem slow, chaotic, and congestion is severe, causing a high-cost economy (Nugroho, 2016). Port performance has never progressed because its services are not optimal and are influenced by the government's performance that is too bureaucratic and the interests of certain parties. Currently, 50% of the approximately 150 international ports in Indonesia are inefficient and not profitable for the national economy's interests (Putri, 2015).
Thus, the function of ports is not only as a gateway (gateway) for trade with the outside world, a link in the flow of goods and services but also as a means of connecting (interface) for trade and regional economic development as well as the national and even international economy. Therefore, in anticipation of future economic growth, all ports in Indonesia are expected to seize all the opportunities that exist by preparing all port facilities and equipment according to market demand (Miftach & Pasek, 2018).
The ease in international trade in the era of globalization will provide conditions for increasingly fierce competition in entering the business world (Putri, 2015), including for the management of Indonesian ports. The strategy adopted by the port is efficiency in all aspects of service and providing satisfying services to service users so that they will always use the services offered (Nirmala, 2017). Of course, this fairly tight competition must be anticipated immediately by preparing all the infrastructure and equipment needed to develop an effective and efficient port so that competitiveness can be achieved as well as possible (Miftach & Pasek, 2018). This anticipation needs to be seen from the growth in economic, industrial, and trade conditions, which will also be followed by ship visits and the flow of goods through Indonesian ports (Kusrini & Parmanasari, 2020).
When connected between the classification of customer satisfaction levels with data on the effective time of Indonesian ports, it turns out that the level of port services in Indonesia is very low (Muninggar, 2008). As a result, transporting goods (freight) by ship from or to Indonesia is becoming expensive. Another factor is the loading and unloading of equipment that often jams. The results of fieldwork, namely TKBM and low port management elements, damage goods, resulting in goods owners' claims (Nugroho, 2016). Therefore, the factors inhibiting the function of Indonesian ports in services are analyzed to obtain solutions or solutions for developing the functions of Indonesian ports to be more advanced and support national economic growth (Idris, 2017).
Port is related to port functions' implementation to support the smooth, safe, and orderly flow of ship, passenger, and/or goods traffic, safety, and security in sailing, intra and/or intermodal transfer places, and encouraging the national economy (Nugroho, 2016) and a region with due observance of regional spatial planning; meanwhile, the definition of a port is a place consisting of land and/or waters with certain boundaries as a place for government activities and business activities that are used as a place for ships to dock, board and disembark passengers, and/or unload loading goods, in the form of terminals and berths equipped with safety and security facilities for shipping and port support activities as well as places for intra and intermodal transportation (Admin, 2013).
Based on different points of view, ports have different roles and functions, including as a node in the transportation network, as a gateway for economic activity, a place for the transfer of transportation modes, supporting industrial activities and consolidation of cargo or goods, as well as a role in realizing insight into the archipelago and state sovereignty. When viewed politically (Miftach & Pasek, 2018). The role of ports in terms of transportation is a part of the total transportation or transportation system, as a series of processes for moving transport from the sender to the recipient of goods involving various processes of transfer and transportation modes (Admin, 2013). In carrying out its port functions, a port is a complex system covering various things, such as port authority, warehousing facilities, mooring officers, tugboats, pilots, customs, storage, distribution, cargo handling, container terminals, and police officers at ports (Yossa & Zunaidah, 2013). Law No. 17 of 2008 concerning Shipping states about legal service businesses that can be carried out to support the well running of port activities, which include several types of businesses, namely loading and unloading of goods; transportation management services; port water transportation; leasing marine transportation equipment or service equipment related to sea transportation; independent tally; container depot; ship management; intermediary for sale and purchase and/or ship charter; ship manning agency; ship agency; care and repair of ships (ship repairing and maintenance).
Provision of Support Tools Facilities
Based on field research results, ships coming to Indonesian ports to carry out loading and unloading activities, loading and unloading passengers, etc., where the average growth increases each year. Hence, it is not comparable to the facilities available as port facilities and infrastructure. Ports in Indonesia to carry out their activities serve port services because they are very minimal, and most of them do not meet the modern standards required to serve the arrival of modern generation ships to carry out their activities such as; loading and unloading activities, boarding and disembarking passengers and so on. Most of the tools used are inherited from the Dutch era and need repairs here and there. The increase in port activities is not balanced with the addition or construction of ports, only repairs or renovations of equipment (Herdian, 2019).
Peter Drucker, one of the writers in management, argues that there are two important concepts so that a company can advance and be favored by its customers in providing services, namely efficiency and effectiveness. Efficiency means doing something right, and effectiveness means doing something right. Efficiency is an input-output concept. An efficient manager achieves output or results measured by the inputs (labor, material, and time) used. Managers who act efficiently can minimize the cost of the required resources. Effectiveness, on the other hand, is choosing the right target (IPC Learning and Consulting, 2020). A manager who chooses an inaccurate or ineffective target, for example, produces a large car when at that time small cars are in vogue. No amount of efficiency can make up for lack of effectiveness. Pelindo actually said that effectiveness is the key to the success of an organization. Before doing an activity efficiently, you must first be sure you have found the right thing to do (Pelindo, 2016).
Indonesian ports must also make improvements to their optimal performance, through efforts (Admin, 2014; Setiawan, 2016);
Increasing Productivity through Human Resources
The economic progress of a country cannot be separated from the work productivity of its population. The productivity itself must be supported by an adequate level of investment and human resources. In addition to high productivity, for a country's economy to grow rapidly, it must be supported by efficiency in the production process so that the economy can produce more optimally (Mudrajad, 2003). Human resource practices are equally important in playing an important role in changing old habits that are not conducive to being consistent with effective and efficient forms of performance. Compensation, training, development, and performance management systems must be combined to convey clear and consistent messages that stimulate and support behavior in achieving business goals (Tan, 2020; Anggraeni, 2019).
Improving customer satisfaction is an important tool by which human resource management practices can demonstrate success (Berita, 2020). Reducing costs and improving product quality are two ways commonly used to meet consumer satisfaction (Tan, 2020). Human Resources are a very important part in increasing work productivity and waste and efficiency in various forms because it gives attention to the human element is one of the demands in the overall effort to increase work productivity. One of the hopes for improving the Indonesian economy is to improve performance services for parties related to port activities, namely government functions and business functions. In connection with this, the business function is left to State-Owned Enterprises (BUMN), in this case, PT Pelindo which is engaged in the port sector (Anggraeni, 2019).
Port as Main Support for Supply Chain
Ports have great potential in supporting supply chain activities and functioning as connectivity. This is due to Indonesia's geographic condition, consisting of thousands of islands, and most of them are waters. One of the ways of connectivity between islands in Indonesia is supported by the availability of ports. The function and role of Indonesian ports are very important and the development of an export-oriented industry because ports are one of the determining elements in trading activities (Nasution, 2017), which in essence the function of the port is to facilitate the movement of goods and services between land transportation modes (inlad transport) and sea transportation modes (maritime transport) and to distribute goods into and out of the customs area as quickly, effectively and efficiently as possible.
Ports have a strategic position for a country's economic growth because seaports can provide direct access to world markets, which is a good opportunity for developing countries to trade with many countries without any intermediary fees; seaports can also be a source of obtaining foreign currency or foreign exchange through exported goods or commodities; a large seaport can also guarantee economic or political independence from other countries and a sea port has the activity of importing consumer goods, raw materials, and capital from industrialized or developed countries (Domestic Trade Policy Center, 2015).
Port activities begin when the ship requires a berth at the dock and requires various services while at the port. Cargo requires terminal services at the port in the transition from ship to land transportation; then, the port provides services for ships and cargo so that there are no obstacles in shipping the ship and the flow of goods and passengers flow (Putri, 2015). The executors of activities at the port, namely the Port Authority, policymakers, and implementers in the field, must think that activities at the port can be carried out smoothly, effectively and efficiently, because all are inseparable links so that the transfer of goods and services in port can smoothly enter and exit the port without obstacles (Idris, 2017), because automatically the smooth activity in a port will certainly reduce costs, so that the smooth movement of goods and services from a port can determine the cost of a product or service (Purnomo & Suyanti, 2019), and the many port activities are very helpful for Indonesia to be able to increase its income, provided that it must be supported by facilities and infrastructure as well as potential and maximum human resources in carrying out all activities at the port.
Things to remember, apart from infrastructure and human resources, are also needed policies that do not obstruct the smooth flow of goods in and out of the port, namely convoluted, ambiguous and dubious policies for port customers so that port services are deemed to be detrimental, it will not be a good conversation for customers, and of course, ports that are not optimal in carrying out their services will no longer be used by their customers because things that hinder the implementation of activities at the port can result in high costs and affect the price of goods and services that will be marketed. Therefore, activities at the port must be in harmony between the policies that are the basis for its implementation with those who carry out their duties and authorities in the field to become in line between policies and their implementers.
This research confirms the great potential of a port if its function is properly organized and utilized through a properly organized and correct arrangement that can make a major contribution to improving the country's economy. According to its purpose, a port's activities can be linked to economic interests and other government interests, where a port is significantly positioned as a spur (accelerator) of development and economic growth. Therefore, a port with all its activities has a very close relationship with the industrial, agriculture, tourism, and trade sectors. The port is also the node of the transportation system chain. It is the gateway), especially for sea transportation in the context of goods traffic activities, containers, and passengers and animals' movement; thus, ports have an important role and function in supporting economic growth.
The important role of ports in trade, among others, is as a total transportation chain (transportation system), which is a series of processes for the movement of goods transport from the sender to the consignee or consumer, which involves various points of the transfer process and modes of transportation. The policies governing the implementation of activities at the port are harmonious and good between fields in port activities, but the implementers in the field, namely the human resources when carrying out the activities, are still disharmonious. This is proven by the smooth entry and exit of goods at the port, too long time, ineffective and efficient, even though the arrangements are well-organized and correct.
Through harmonious regulations supported by good human resources, it can contribute to improving the country's economy, where ports are significantly positioned as spurs (accelerators) of development and economic growth. Rearranging the appropriate port roles and functions is necessary to improve the condition of Indonesian ports, which is not conducive and professional, resulting in ineffective and efficient performance in serving its customers. Indonesian ports must organize their performance by developing means and infrastructure to support port activities if limited funds can invite domestic and foreign investors through investment.