Indonesia Yet to Fully Capitalize on Malacca Strait, Supply Chain Indonesia Says

JAKARTA, Jakartaweekly.com — Supply Chain Indonesia said the government has yet to fully capitalize on the Malacca Strait, despite its vast potential to generate state revenue.

Setijadi, Founder and CEO of Supply Chain Indonesia (SCI), said the Malacca Strait is one of the world’s busiest shipping lanes, with more than 100,000 vessels passing through annually and carrying around 22 percent of global maritime trade.

The route also serves as a key global energy corridor, with approximately 23 million barrels of oil transported through the strait each day. This strategic position places Indonesia as a key player in the global logistics system, particularly through its linkage to the Indonesian Archipelagic Sea Lanes (ALKI), which serve as designated international shipping routes across the archipelago.

“With more than 90,000 vessels transiting each year, even if only 5–10% were to make port calls in Indonesia, the economic potential would be substantial—ranging from port revenues and logistics services to multiplier effects on supporting industries,” he said in a statement on Monday, April 27, 2026.

Read also: SCI Sees Opportunity to Strengthen National Supply Chains Amid Global Disruptions

He added that Indonesia needs to adopt a more strategic approach to leverage the dense traffic in the Malacca Strait, shifting from a pass-through economy to a service-based maritime economy.

He pointed to Singapore as a benchmark, noting that the greatest economic value from major shipping lanes is derived not from transit fees, but from value-added services.

Currently, Singapore is the world’s largest bunkering hub, supplying more than 50 million tons of marine fuel annually, and handling over 37 million TEUs of container throughput each year.

He also highlighted the need for the government to address persistent challenges, both in terms of port performance and cargo flow structure. Several major ports, he said, still lag behind regional hubs in turnaround time and operational efficiency.

Read also: PELNI–Meratus Collaboration Aims to Improve Logistics Distribution in Eastern Indonesia

Meanwhile, limited availability of value-added services—such as bunkering, ship repair, and transshipment—continues to reduce incentives for international vessels to call at Indonesian ports.

In addition, export-import cargo remains fragmented across multiple ports, preventing sufficient volume consolidation to attract mother vessels for direct calls.

As a result, shipping operators tend to favor ports with larger and more stable volumes. Much of Indonesia’s export-import traffic is therefore still routed through transshipment hubs such as Singapore and Port Klang, leading to higher logistics costs, longer lead times, and a loss of potential domestic value capture.

(Read Jakartaweekly.com news on Google News)