A New Era For Indonesian Ports: The Pelindo Transformation

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The merger of Indonesia’s four main port operators into PT Pelindo has significantly strengthened the country’s maritime logistics sector. This consolidation has led to improved efficiency, reduced costs, and enhanced connectivity between ports. Pelindo is now the second-largest container terminal operator in Southeast Asia, after PSA. Additionally, the Integrated Port Network (IPN) initiative aims to balance trade flows and reduce logistics costs across Indonesia, according to Drewry.

Pelindo port Transformation

The development of end-to-end integrated logistics service is one of the main goals of the Pelindo merger. This end-to-end integrated logistics service includes container and non-container services, maritime services, logistics and hinterland services. Customer orientation is at the heart of Pelindo’s transformation as the company focuses on a client-oriented culture to meet the diverse needs of customers. 

Before the merger, port services operated by four state-owned port enterprises (Pelindo I, II, III, and IV) in Indonesia faced various challenges that needed to be addressed, such as non-standardized port operations with different business processes, IT system standards and branch classifications across ports; limited port infrastructure, with inconsistent standards across facilities, inadequate capacity for large vessels, and a shortage of essential equipment such as pilot boats and tugboats; lack of synergy among customer-focused state-owned ports with minimal coordination in customer service management and limited attractive service offerings; limited financial capability and synergy, declining financial strength, insufficient capital investment, and limited ability to support government projects.

Operational Standardisation

The standardization initiative aims to improve Pelindo’s core port services through several key strategies. These include HR development and competency building via standardised business processes and advanced training programs to enhance operational performance. The initiative also focuses on restructuring the organization based on planning and control (P&C) principles, creating clear, accountability-driven structures that align teams with organizational goals.

Additionally, optimizing existing crane and yard infrastructure with standardised designs enhances compatibility and efficiency. The implementation of P&C functions, supported by applications like TOS Nusantara and PTOS-M, streamlines planning and control operations, from vessel scheduling to cargo management, enabling real-time monitoring, data analysis, and quicker, more accurate decision-making. 

Achievements So Far

Standardisation and systemisation have improved Pelindo’s services. Key improvements include enhancing HR skills, refining Planning & Control (P&C) processes, and adopting digital systems. In the short term, standardization has not markedly improved cost efficiency for most samples (measured by cost/teu, cost/ton, or BOPO) due to its limited focus on cost and external factors affecting economies of scale. Long-term efficiency gains are expected with better commercial performance.

The operational transformation has benefitted Pelindo, its customers, and the maritime ecosystem. Pelindo gained cost efficiency, increased traffic potential, and enhanced competencies. Customers enjoyed reduced port and cargo stay times, optimized berthing, and lower ship rental costs, while the maritime ecosystem saw lower logistics costs and improved connectivity.

Customer Views

The improvements in operational performance, efficiency and service at Pelindo post-merger have garnered positive customer feedback, reflecting the company’s success in enhancing service quality. An international shipping line noted:

“Overall, there has been an improvement in service performance, with roughly a 10% increase in BSH at several ports and reduced port stay times, leading to savings on berthing fees and fuel. Additionally, infrastructure quality and human resources have improved.” 

Meanwhile, a domestic shipping line highlighted, “Since the merger, Pelindo’s operations have continuously improved. Berthing times have been reduced, saving fuel costs due to shorter port stays. New services have been introduced, customer service has become more responsive with clear contact points, and ground staff now have a better understanding of operations. Digitalisation has also boosted efficiency.”

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Source: Drewry