Jepara Furniture Exporter Dizzy, Rare Empty Container in Central Java

The entrepreneurs of Jepara furniture exporters in Jepara Regency, Central Java, are now confused by the scarcity of empty containers for shipping

The entrepreneurs of Jepara furniture exporters in Jepara Regency, Central Java, are now confused by the scarcity of empty containers for shipping their production furniture via ships. Even if there is an empty container, the price skyrockets unreasonably, with the rental price increasing up to 500 percent even more than normal conditions.

Ironically, the furniture entrepreneurs, who are generally SMEs, have submitted this complaint to the government, but there is still no solution. Entrepreneurs say, even if there is an empty container, and the price skyrockets, they will have to wait months.

Such conditions make furniture export activities to be disrupted. This is also experienced by furniture MSME actors in Jepara Regency.

Since early 2020, the Indonesian Furniture and Handicraft Industry Association (Himki) in Jepara has submitted this complaint to the government. However, so far there has been no follow-up. In fact, the relevant agencies often hold discussions and seminars to solve this problem.

Hasyim, one of the furniture MSME players and a member of Himki in Jepara Regency, explained that the increase in freight costs could reach 500 percent. He compared before the pandemic, the cost of loading the ship was only about 2,800 US dollars to be sent to Germany.

"Since the pandemic, it has increased to 12,800 US dollars to send to Germany. Meanwhile, to send it to the United States, it can reach 20,000 US dollars," he said.

"Actually, the European market is very promising because they still need a lot. But how can it be, conditions are still like this," he said.

Based on his experience, in January 2021 Hasyim should be able to send one container containing his furniture products to the European market. However, because there were no empty containers, he had to wait until May 2021.

"Six days before Idul Fitri my goods were only able to leave. Even though I should have left in January," he said.

"The wait was too long because there were no empty containers. Even if there were, they had to wait together for the ship to depart," he said.

Before the pandemic, in a month Hasyim could send four furniture containers for the European market. But now, not necessarily in a month he can send one container. To get around the high cost of renting and loading ships, Hasyim packs the product in pieces so that it can fit a lot.

Alan, a furniture entrepreneur in Jepara Regency, also complained about the high cost of containers.

"Yes, it's true that the cost of the container is now super expensive. But it is still accepted by the buyer. It depends on us how to deal with the high cost," he said.

Alan is still lucky because in a month he can send up to 3 containers of furniture products to Europe.

To get around the high cost of renting and loading ships, Hasyim packs the product in pieces so that it can fit a lot.

Alan, a furniture entrepreneur in Jepara Regency, also complained about the high cost of containers.

"Yes, it's true that the cost of the container is now super expensive. But it is still accepted by the buyer. It depends on us how to deal with the high cost," he said.

Alan is still lucky because in a month he can send up to 3 containers of furniture products to Europe.

For example, the export destination to New York City is usually 10,000 - 12,000 USD, now it is 22,000 USD. Few ships run but many want to export.

"In addition, the current state of the customs system is down, which makes operational costs expensive," he added.

Mayang said that most of the products sent included furniture, toys, raw materials for pesticides, and cosmatic packaging.

The delivery destination is mostly New York City in the United States.

Central Government Responsibilities

Last December, exporters, importers, and the shipping industry experienced problems of rare and expensive containers. This happened because several countries had locked down so that the supply and demand for containers was not balanced.

In 2021, the fact is that the problem has not yet been resolved. In fact, it is exacerbated by the increase in the cost of loading the ship (freight). The spike can reach 400 to 600 percent.

According to some exporters, this is the result of the second wave of the Covid-19 pandemic.

It is appropriate that the government needs to facilitate the transport contracts of exporters and importers with the main line operator (MLO).

In addition, there is a need for incentives for empty containers from surplus areas to deficit areas.
Head of the Central Java Industry and Trade Office, Arief Sambodo, said that his party had already sent a letter to the Ministry of Industry regarding the scarcity and high cost of containers.

Many SMEs, exporters, and importers have complained about this situation to their side.

He said the rare container issue was related to policies issued by the central government.

"We ask for a policy to reduce container (freight) costs. Overall, this problem still has no solution," he said.

Arief also asked the parties to be patient. This is because this pandemic has had a significant impact on all sectors of the economy.

However, he also did not want to wait too long for concrete policies from the government.

"While waiting for the emergence of the policy, we continue to pick up the ball against MSME players. Through virtual activities to introduce their products to local consumers.

So that the local market can be a backup when export costs are high," said Arief, who is also still undergoing self-isolation.

Exports up

Based on BPS data in February 2021, Indonesia's exports will be 15.265 percent. Up 8.56 percent compared to February 2020.

Meanwhile, Indonesia's imports in February 2021 have reached 13.264 percent.

Up 14.86 percent compared to February 2020. Most non-oil and gas exports went to China, followed by America, Japan, and Malaysia.

The Indonesia National Shipowners Association (INSA) once said that in 2021 the scarcity of containers would not be too severe.

This happened because several countries such as China, the European Union, and the United States had not implemented a lockdown. But you have to be careful.

The increase in the cost of renting containers is not only caused by scarcity.

But there are also several influencing factors, such as the disruption of container turnover, the closure of several factories, the lack of manpower at the port, and the lack of a truck fleet.

The Indonesian Logistics Association (ALI), also once stated that the effects of the Ever Given ship being stuck in the Suez Canal, Egypt, last March also disrupted world shipping traffic. As a result, it exacerbates the scarcity of containers.

Considering 15 percent of global shipping traffic goes through the Suez Canal. Actually the scarcity of containers does not only occur in Indonesia, but occurs globally. Singapore, Hong Kong and Dubai are also experiencing it.

Especially for exports to Europe and Australia, it is very difficult to get empty containers.

Unpack outside

The chairman of the freight and container transport entrepreneurs who are members of the DPC of the Tanjung Emas Port Special Transport Organda (Angsuspel) Semarang, Purwo Widodo, revealed that there was no shortage of container transport fleets, but last week there was a system disturbance.

As a result, vehicles cannot carry out the loading and unloading process and this condition makes the export-import process stop for several days.

Due to system disturbances, finally the trucks could not be unloaded, loading could not enter the port.

He said, in a day there are thousands of containers in and out of the port of Tanjung Emas Semarang.

Mostly one container only contains one type of load with the maximum weight according to the rules. Arnada 20 feet on average has a carrying capacity of 18 tons and for trucks 40 feet capable of 25 tons.

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Indonesia Furniture For International: Jepara Furniture Exporter Dizzy, Rare Empty Container in Central Java
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The entrepreneurs of Jepara furniture exporters in Jepara Regency, Central Java, are now confused by the scarcity of empty containers for shipping
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