Competitiveness of Traditional Shipping in Sea Transportation Systems Based on Transport Costs: Evidence from Indonesia

Abstract

Traditional shipping vessel is a mode of transportation that is part of Indonesia's cultural heritage and still exists today. However, traditional shipping has been deemed unable to compete with the national shipping fleet due to the high transport cost, the low safety level, long travel times, limited capacity, and limited ship repair facilities. In addition, its existence was eliminated with the advent of modern ships. This study aims to analyse the competitiveness of traditional shipping with national shipping freight based on transportation costs. The analysis used is a gap analysis of transportation costs based on variable costs and fixed costs for every traditional shipping route that overlaps with national shipping. Data were obtained by field observations. The results of the analysis show that the competitiveness of traditional shipping has decreased due to the loss of cargo of national ships. It is necessary to optimize the route by restoring the traditional shipping function as a national shipping feeder, especially in the underdeveloped, remote, outermost, and border (UROaB) areas. This study recommends the integration of the national shipping transportation network as a trunk line and traditional shipping as a feeder line. The shipping integration is expected to form a network pattern and generates increase in the demand for traditional shipping cargo.