Study on The Development of Kuala Tanjung as International Hub Port

Study on The Development of Kuala Tanjung as

International Hub PortFinal Presentation

Part 4 – Transportation Analysis

2014

DIRECTORATE GENERAL OF SEA TRANSPORTATIONMINISTRY OF TRANSPORTATION REPUBLIC OF INDONESIA

OutlineStaging

PositioningAccelerationPeak GrowthMaturity

Scenario I Existing Hubs

Scenario II Existing Hubs + Dedicated Berth

Scenario III Extended Scenario II (Shifted Export from Sumatera)

Scenario IV Market Based Hubs + Dedicated Berth

Conclusion and Recommendation

Development Staging

Stage IV (Maturity/ Stable)

Stage III (Peak Growth)

Stage II (Acceleration)

Stage I (Positioning)

• Stage I Initial/Preparation• Primary target Asserts port

position in regional/global network by securing critical trade routes and providing world-class infrastructure

• Time period 2018-2022• Status Port has just begins

operating Estimated 20% of ultimate

demand will be captured

• Stage IV Maturity• Primary target Maintain

performance• Time period 2033-2042• Status Fully operated Estimated 100% of ultimate


• Stage II Acceleration• Primary target Expand network

and strengthen position through delivering world-class performance

• Time period 2023-2027• Status Half operated Estimated 40% of ultimate


• Stage III Peak Growth • Primary target Capture demand as

much as possible• Time period 2027-2032• Status close to fully operated Estimated 80% of ultimate


Scenario IExisting Hubs

Kuala Tanjung

Port

Generated Demand from Aceh and North Sumatera

Sei Mangkei starts operating as planned

Shifted Demand (Domestic Container) from Belawan Port

Based on Stated Preference Analysis

Existing and Shifted Export from Belawan Port

Existing and Shifted Import from critical trade routes

Export-Import

Generated Demand

Shifted Demand

Demand Commodities in North Sumatera Province

KARETSAWITKOPIKELAPACOKELATCENGKEHKEMENYANKEMIRITEMBAKAUIKANPADIJAGUNGUBI KAYUUBI JALARKACANG TANAHKACANG KEDELAIKACANG HIJAU

41%

28%

10%

12%

Demand Commodities in Aceh Province

KARET SAWIT

9%

91%

31%

62%

1%5% 1%

Komoditas Demand KEK Sei Mangkei

KARET (KRG,R.T,RSN)

SAWIT (CPO, CPKO, OLEO)

KERTAS

KAYU

PUPUK

Karet Sawit Kertas Kayu Pupuk

Generated Demand

Demand commodities in Sei Mangkei Special Economic Zone (SEZ)

North Sumatera

Generated Demand Forecast (e.g. North Sumatera)

2000

2003

2006

2009

2012

2015

2018

2021

2024

2027

2030

2033

2036

2039

2042

10,000,000

11,000,000

12,000,000

13,000,000

14,000,000

15,000,000

Population of North Sumatera Province

Data

Year

Popu

lati

on

2000

2003

2006

2009

2012

2015

2018

2021

2024

2027

2030

2033

2036

2039

2042

0.00100,000.00200,000.00300,000.00400,000.00500,000.00600,000.00700,000.00

GRDP of North Sumatera Province(billion rupiah)

Data

Year

GRD

P (b

illio

n ru

piah

)

2000

2003

2006

2009

2012

2015

2018

2021

2024

2027

2030

2033

2036

2039

2042

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,000

Palm Oil Production in North Sumatera Province

DataPredic-tion

Year

Prod

ucti

on (

ton)

-58 -52 -46 -40 -34 -28 -22 -16 -10 -4 20.000.100.200.300.400.500.600.700.800.901.00

Demand sensitivity to Turn Round Time (TRT)

Kuala Tanjung Belawan

TRT Difference (hours)

Prob

abili

ty

TRT in Port of Tg. Priok serves as the baseline and is estimated at 48 hours. Therefore, equillibrium state will be reached when Port of Kuala Tanjung operated with 14 hours of TRT (34 hours faster than Port of Tg. Priok)

TRT in Port of Belawan is estimated at 72 hours. Thus, if Port of Kuala Tanjung is designed to operate at 14 hours of TRT (58 hours faster than Port of Belawan) then it is expected that 65% of Port of Belawan’s demand will shift to Port of Kuala Tanjung

-46 -34 -24 -13 -2 9 20 31 42 53 640.000.100.200.300.400.500.600.700.800.901.00

Demand sensitivity to Turn Round Time (TRT)

Kuala Tanjung Tanjung Priok

TRT Difference (hours)

Prob

abili

tyStated Preference

30%

Demand shift will occur gradually until the ultimate shifting probability1 (65%) is reached.

1only for Generated Demand from Aceh and North Sumatera

50%65% 65%

25% 10%45%65%

2015

2015

2039

2039Aceh

North Sumatera

Shifting Probability

Shifted Domestic Container

15% 30% 50% 65%

2015 2039

Domestic container shift from Port of Belawan to Port of Kuala Tanjung occurs gradually as the logical consequence of a better, thus, more competitive performance of Port of Kuala Tanjung compared to Port of Belawan

Shifted Demand

Existing dan Shifted Export

Existing exports grows logarithmically

Exports shift from Port of Belawan to Port of Kuala Tanjung also occurs gradually as the logical consequence of a better, thus, more competitive performance of Port of Kuala Tanjung compared to Port of Belawan

15% 30% 50% 65%

2015 2039

Existing dan Shifted ImportExisting import grows logarithmically

Imports shift from Port of Belawan to Port of Kuala Tanjung occurs gradually

Imports shift focuses on critical trade routes of major shipping lines to demonstrates the capability of Port of Kuala Tanjung to deliver a world-class performances and services

Critical Trade Routes:• From and To Singapore• From and To Port Klang• From and To PTP• From and To Ho Chi Minh• From and To Rotterdam• From and To Qatar• From and To Suez• From and To Qatar• From and To Fujairah• From and To Das Island

15% 30% 50% 65%

2015 2039

Demand Projection

2015 2016 2017 2018 2022 2027 2032 20420

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

Container Traffic Projection of Port of Kuala Tanjung

Year

Vol

ume

(TEU

s)YEAR

CONTAINER VOLUME (TON) (TEUs)

2015 0 02016 0 02017 0 02018 15,773,430 1,126,6742022 29,973,297 2,254,2832027 47,743,732 3,602,2672032 59,990,651 4,491,7132042 63,146,164 4,717,107

Construction Phase

YEAR CPO VOLUME(TON)

2015 02016 02017 02018 3,679,1052022 4,755,4592027 5,771,6682032 6,084,0962042 6,257,227

2015 2016 2017 2018 2022 2027 2032 20420

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

Liquid Bulk Traffic Pro-jection of Port of Kuala

Tanjung

Year

Vol

ume

(Ton

)

Construction Phase

Scenario IIExisting Hubs + Dedicated Berth

Export-Import

Generated DemandShifted Demand

Shifted Demand (Transshipment)

Kuala Tanjung

Generated Demand from Aceh to Jambi






Shifted transshipment from four port competitors

30% 50%65% 65%

25% 10%45%65%

2015

2015

2039

2039

30% 10%50%65%

2015203910% 20%

65%

2015 2039

40%

15% 10%30%50%

20152039

Aceh

North Sumatera

West SumateraRiau

Jambi

Generated Demand

SingaporeSingaporePTP

Malaysia

Port KlangMalaysia

PenangMalaysia

Transshipment on Selected Ports

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

15,000

5,015,000

10,015,000

15,015,000

20,015,000

25,015,000

30,015,000

35,015,000

f(x) = 18652770.6738982 x^0.139839479525195R² = 0.781753642392497

Singapore Transhipment Traffic

DataPower (Data)

Year

Vol

ume

(TEU

s)Transshipment on Selected Ports

Average 81% of total

throughput per year

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

f(x) = 3948148.61843362 x^0.204786392143793R² = 0.973759662425002

PTP Transhipment Traffic

DataPower (Data)

Year

Vol

ume

(TEU



throughput per year

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

f(x) = 2955401.37966699 x^0.283538668837284R² = 0.908020063875345

Port Klang Transhipment Traffic

DataPower (Data)

Year

Vol

ume

(TEU



throughput per year

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

2040

2042

0

50,000

100,000

150,000

200,000

250,000

f(x) = 18903.0140878384 x^0.662483637024391R² = 0.711871132519554

Penang Transhipment Traffic

DataPower (Data)

Year

Vol

ume

(TEU


Average 0.04%

of total throughput

per year

Major Problem in Malacca Strait…or potential demand?

Source: P3 Network Presentation

Major Problem in Malacca Strait…or potential demand?

Source: P3 Network Presentation, 2014

Transshipment on Selected Ports

3% 0%10%12%

20152039

SingaporeSingaporePTP

Malaysia

Port KlangMalaysia

PenangMalaysia

Demand Projection

2015 2016 2017 2018 2022 2027 2032 20420

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000


Tanjung

Year

Vol

ume

(Ton

)

2015 2016 2017 2018 2022 2027 2032 20420

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000


Year

Vol

ume

(TEU

s)YEAR

CONTAINER VOLUME (TON) (TEUs)

2015 0 02016 0 02017 0 02018 16,415,264 1,172,5192022 48,930,057 3,608,3372027 118,302,128 8,642,1522032 149,371,937 10,876,0912042 156,185,521 11,362,775

Construction Phase


2015 02016 02017 02018 4,362,5762022 6,199,3792027 8,726,3572032 10,929,5932042 10,072,376

Construction Phase

Scenario IIIExtended Version of Scenario II

Export-Import

Generated DemandShifted Demand

Shifted Demand (Transshipment)

Kuala Tanjung








Demand Projection

2015 2016 2017 2018 2022 2027 2032 20420

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000


Year

Vol

ume

(TEU

s)

2015 2016 2017 2018 2022 2027 2032 20420

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000


Tanjung

Year

Vol

ume

(Ton

)

YEARCONTAINER VOLUME(TON) (TEUs)

2015 0 02016 0 02017 0 02018 46,127,912 3,294,8512022 111,826,075 8,100,9102027 228,670,805 16,525,6292032 298,618,759 21,536,5782042 314,464,758 22,668,435

Construction Phase


2015 02016 02017 02018 4,362,5762022 6,199,3792027 8,726,3572032 10,929,5932042 10,072,376

Construction Phase

Scenario IVMarket Based Hubs + Dedicated Berth

Hubs determined by Port Centrality Index





Export-Import only allowed in Kuala Tanjung International

Hub Port


What is Port Centrality Index…

Port Centrality Index is a measure of level of importance (centrality) of a port within its network

Port Centrality Index is computed based on port’s connectivity, i.e routes connecting a port

with another ports… therefore, it is also known as

Port Connectivity IndexThe centrality of a port is not only defined by the number of routes served but also to which other ports it connects with

Ports that serves many routes to relatively small ports has lower centrality index than

ports that serves fewer routes to major ports

What is Port Centrality Index…

Port Centrality Index could also used to measure the network structure

Generally, there are 3 basic network structures, i.e Fully Connected Network, Point-to-Point

Network, and Hub-and-Spoke Network

Hub-and-Spoke System is considered to be the best structure in terms of capacity utilization

Hub-and-Spoke system formed when the Port Centrality Index follows power law distribution

Ilustrasi Perhitungan Port Centrality Index…

λ x = A x(A – λI) x = 0

Adjacency Matrix (A)

JakartaCGK

SurabayaSUB

DenpasarDPS

MakassarUPG

MDCManado

BPNBalikpapan

MedanKNO

BatamBTH

Example: Airport Centrality Index in Indonesia

Facts finding

Statistical analysis demonstrates that the Airport Centrality Index follows power law distribution with exponents ~ 2,235.

The result provides a solid prove that the aviation system in Indonesia operates under hub-and-spoke structure.

Note:If the Airport Centrality Index follows normal distribution, then the aviation system in Indonesia operates under point-to-point structure.

0.1110.2220.3330.4440.5560.6670.7780.8891.0000%

10%

20%

30%

40%

50%

60%

70%

80%

f(x) = 0.618077372258355 x^-2.23518653144993R² = 0.913395447532059

Airport Centrality Index in Indonesia

Airport Centrality Index

Per

cen

tage

of A

irp

ort

s

Airport Centrality Index confirms Hub-and-Spoke System in Aviation Network

Why Power Law…

There is a higher probability that a node with high connectivity exist in a Power Law distribution compared to Normal

distribution

Gauss/ Normal Distribution

Power Law Distribution

BanjarmasinKalimantan Timur

MakassarMakassar

Tg. PerakSurabaya

Tg. PriokJakarta

BelawanMedan

Based on Domestic Cargo Volume

Port Centrality Index in Indonesia

Tg. PriokJakarta Tg. Perak

Surabaya

JayapuraPapua

MakassarMakassar

SorongPapua Barat

Based on Domestic Connectivity


Based on Export-Import Volume

Tg. PriokJakarta

Tg. PerakSurabaya


Based on Export-Import Connectivity

Tg. PriokJakarta

Tg. PerakSurabaya


0.1460.288

0.4300.573

0.7150.858

1.0000%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Centrality Index Distribution of Container Ports in Indonesia

Centrality Index

Freq

uenc

y (%

)

0.091

0.182

0.273

0.364

0.455

0.545

0.636

0.727

0.818

0.909 1

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

Centrality Index Distribution of Export Import Ports in In-

donesia

Centrality Index

Freq

uenc

y (%

)

NOT Hub-and-Spoke

Port Centrality Index Distribution in Indonesia

Selected Market-Based HubsPort Centrality Index Hub Ports

Domestic Volume Tg. Priok

Tg. Perak

Makassar

Belawan

Banjarmasin Domestic Connectivity Tg. Perak

Tg. Priok Jayapura Sorong Makassar

Export Import Volume Tg. Priok Tg. Perak

Export Import Connectivity Tg. Priok Tg. Perak

Tg. PriokTg. PerakKuala TanjungBitung

1

2

3

4

Hubs:

Note:Port of Kuala Tanjung and Port of Bitung are included to satisfy the MP3EI Program issued by the Government of Indonesia (GoI)

Tg. PriokJakarta Tg. Perak

Surabaya

Kuala TanjungMedan Bitung

Manado

New Hub

Existing Hub

Selected Market-Based Hubs

Demand Projection

2015 2016 2017 2018 2022 2027 2032 20420

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Liquid Bulk Traffic Projection of Port of Kuala Tanjung

Year

Vol

ume

(Ton

)

2015 2016 2017 2018 2022 2027 2032 20420

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000


Year

Vol

ume

(TEU

s)YEAR

CONTAINER VOLUME(TON) (TEUs)

2015 0 02016 0 02017 0 02018 46,127,912 3,294,8512022 111,826,075 8,100,9102027 288,823,610 20,822,2582032 407,795,650 29,334,9272042 429,794,737 30,906,291

Construction Phase


2015 02016 02017 02018 4,362,5762022 6,199,3792027 8,726,3572032 10,929,5932042 10,072,376

Construction Phase

Conclusion

2015 2016 2017 2018 2022 2027 2032 20420

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

Container Traffic Projection of Port of Kuala Tanjung(All Scenarios)

Skenario ISkenario IISkenario IIISkenario IV

Year

Vol

ume

(TEU

s)

Scenario I

Scenario III

Scenario II

Scenario IV

ConclusionScenario II is considered as the best alternative because of the following:• Empirical evidence shows that dedicating a berth to

private parties, such as major shipping lines, will have significant positive impact in ensuring the port’s demand

• Export-import restriction policy is a challenging and problematic issue to be implemented

• The quality of the land transport system plays an important role in the demand shifting. With the high degree of uncertainty surrounding the land transport system development in Sumatera (such as TransSumatera Toll Road, TransSumatera Railways, etc.), the assumption of shifted generated demand from the entire Sumatera is considered unrealistic

Thank you…

Study on The Development of Kuala Tanjung as International Hub Port

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