Towards a Future of Railway-Based Logistics
Tauhid Nur Azhar
The biggest challenge in Indonesia, especially on some of its main islands, is the demographic concentration which leads to the focused development of supporting infrastructure as a logical consequence. The best highway networks, longest railway lines, ports, hospitals, and educational facilities with available human resources are concentrated in certain growth areas.
Road transportation, contributing significantly to emissions and carbon footprint, is currently the mainstay. This is not to mention the data on health quality degradation due to high stress levels, declining air and environmental quality, and direct impacts from various road conditions like motor vehicle accidents, etc.
This leads to a cultural and communal behavior inclined towards using private vehicles or point-to-point transport, with limited physical activity. This correlates with health and fitness levels, which in turn affects productivity, both individually and communally.
Currently, there’s a growing trend of interconnection in the context of information technology utilization. The digital era is a term widely used across various sectors, including industry, manufacturing, services, and logistics.
There is a significant development in production processes with concepts of automation and efficiency, prioritizing computational approaches and more precise machinery. This extends from raw material processing to handling the downstream sector of marketing and distribution to the public.
This includes business analysis and mapping of actual conditions that can lead to new approaches in the fields of economics and precision econometrics. Logistics and distribution channels remain key in efforts to improve efficiency in various industrial sectors.
Transportation by road, sea, rail, and air remains the main focus in the concept of smart logistics and various supply chain management approaches. Freight forwarding services dedicated to handling various shipping processes from storage, packing, delivery fleet, shipment documentation, to ensuring safe delivery to the recipient will continue to evolve.
The ongoing digitalization process will aid in mapping potential, route efficiency, transportation mode selection, service market development planning, as well as strategies for developing hubs, warehouses, and local distribution mechanisms.
Therefore, it is undeniable that the transformation of logistics services, especially those based on railways, will always be a sexy sector. The transportation of goods and commodities via rail has classic comparative advantages such as a high level of certainty, security, and objective and rational cost structure.
On the other hand, there are challenges and constraints such as the limited point of service flexibility in the category of fixed mobility. Therefore, integrated ground handling strategies are required, along with POS and digital applications as service windows, as well as collaboration with strategic business partners.
Another issue is the dynamics and non-continuum flow of goods. There are fluctuations in demand and production for almost all commodities, except for specific commodities like coal that are related to energy supply continuity. However, this condition can be addressed by implementing the concept of smart storage and smart hubs, enabling the creation of a value chain service involving collaborative partners who act as collectors. This is primarily for B2B commodity transportation, not retail serving personal levels.
Referring to applicable regulations, railway transportation of goods has a fairly wide scope. Based on the Ministry of Transportation of the Republic of Indonesia Regulation Number 48 of 2014 on the Procedures for Loading, Arranging, Transporting, and Unloading Goods by Railways in 2014, the transportation of goods or commodities consists of general cargo, special cargo, hazardous materials (B3), and B3 waste transportation. General cargo can be classified as various goods, postal items, and corpses. Special cargo includes bulk cargo, liquid cargo, sheet glass, goods requiring refrigeration facilities, plants and live animals, vehicles, heavy equipment, goods with specific weight, and containers. For B3 transportation, it can be classified as easily explosive, gas, easily flammable liquid, easily flammable solid, easily infectious material, and other hazardous and toxic substances. B3 waste transportation can be classified as easily explosive, easily flammable, reactive, infectious, and corrosive materials.
Currently, it is dominated by the transportation of commodities from several strategic sectors that are assumed to be more reliable and economically viable in terms of volume/quantity, frequency, and continuity. Although commodity transportation and retail-oriented package services also receive adequate service through the use of freight cars and parcel train sets with infrastructure such as warehouse stations, it is undeniable that strategic commodities such as fuel, coal, cement, and fertilizer remain the mainstay.
Regarding the energy sector and infrastructure development, railway transportation of commodities/goods indeed has a significant contribution to driving development. Among the various commodities transported by railways, Pertamina’s oil products (BBM) are the largest, reaching 1.7 million tons (57.31%). Coal transportation is in second place, reaching 0.695 million tons (22.84%), followed by cement commodities reaching 0.491 million tons (16.14%), quartz sand commodity transportation reaching 108,800 tons (3.57%), and fertilizer commodities with 4,200 tons (0.14%) (Rasyid et al., 2016 in Arkan M Faizulhaq, 2023).
There are at least eight routes for the transportation of Pertamina’s BBM commodities on the island of Java. The Maos-Tegas route covers a distance of 134 km, the Cilacap-Rewulu route is 167 km long, the Rewulu-Solo route spans 70 km, the Rewulu-Madiun route extends over 165 km, the Benteng-Mangli route covers 100 km, and there are three other routes. BBM commodity transportation routes have the most extensive service coverage compared to other commodities. The transportation of cement commodities serves the distribution of cement for PT Holcim and PT Semen Gresik with seven service routes on the island of Java. The service routes for cement transportation in Java include Karangtalun-Lempuyungan (171 km), Karangtalun-Purwosari (228 km), Karangtalun-Solo Balapan (231 km), Karangtalun-Sragen (260 km), Karangtalun-Semarang Poncol (342 km), Karangtalun-Brumbung Demak (324), and Indro-Sidotopo Surabaya.
Meanwhile, from available information from several major producing provinces in Java, data from the Asal Tujuan Transportasi Nasional Angkutan Barang (Origin-Destination National Transportation of Goods) survey shows that West Java produces a total production of goods movement of 3,714.573 million tons per year. For Central Java, the total production of goods movement is 6,650.408 million tons per year, and East Java has 6,327.686 million tons per year.
This is very promising, especially considering that in the World Economic Outlook (WEO) report of July 2023, the IMF projected that Indonesia’s economic growth would stabilize at 5% in 2023 and 2024. Furthermore, according to Country Report №2023/221 also from the IMF, Indonesia’s economy has the potential to grow even faster than expected if there is an increase in net exports to China. This means that increasing export capacity from industrial centers with specialized products will continue to drive the demand for commodity transportation services to hubs or the nearest shipping ports/airports.
Currently, the volume of goods transported by sea is estimated to have reached 26.5 million tons in April 2022, marking a 1.53% increase (year-on-year) from the previous year. Cumulatively, maritime transportation of goods has reached 104.5 million tons in the first four months of 2022. Most maritime transportation is recorded at the Panjang Port in Bandar Lampung, Lampung, primarily related to coal transportation. It is followed by the Tanjung Priok Port in North Jakarta, DKI Jakarta. (Joni Martinus, KAI, 2021)
The Central Statistics Agency (BPS) also reported that the volume of goods transported by railway reached 5.2 million tons in April 2022, marking a 22.38% increase (year-on-year) from the previous year. (Dzulfikar Fathur Rachman, Databoks, 2022)
What about the current conditions of infrastructure and facilities in the railway freight transportation sector?
The official website of PT KAI/Kereta Api Indonesia (Persero) divides the commodities or products transported by railway as follows:
Containers:
Bulk liquid goods:
BBM (Fuel), CPO (Crude Palm Oil), all non-corrosive liquid chemicals, cooking oil, mineral water, and others.
Bulk goods: coal, sand, cement, granulated sugar, fertilizer, rice, corn, asphalt, clinker, and others.
Retail goods: electronic products, factory-packaged products, parcel deliveries, and piece goods.
Packaging goods: cement, fertilizer, granulated sugar, rice, and palletized goods.
Meanwhile, the transportation of various types of commodities by railway is carried out as follows:
Railway container transport with 20-foot and 40-foot flatcars.
A 20-foot container has a maximum volume of 33 cubic meters and a maximum weight of 22 tons, while a 40-foot container has a maximum volume of 67 cubic meters and a maximum weight of 27 tons.
20ft and 40ft containers differ in terms of cost, with 20-foot containers generally priced at around 75% of the cost of 40-foot containers, as well as storage capacity, volume, and weight. 20ft and 40ft containers are used for Full Container Load (FCL) cargo shipments.
Shipping goods via FCL (Full Container Load) has relatively low costs due to the large volume that can be shipped and is safer because the goods won’t mix with other cargo (Hari, 2022).
Types of containers themselves include refrigerated containers, standard containers, hard-top containers, open-top containers, flatracks, platforms, ventilated containers, bulk containers, and tank containers.
Specifically for the transportation of cement commodities, flatbed railcars are used. The transportation of cement using flatbed railcars involves a palletizer system. Cement bags are stacked on wooden pallets, which are then lifted onto the flatbed railcars using forklifts. In its use, cement is packaged in bags of 40 kg and 50 kg each (Andreas, 2019).
For the transportation of oil products in partnership with PT Pertamina Indonesia, tank cars are used. This mode of transportation distributes oil products such as aviation fuel, gasoline, and diesel to various regions.
Tank cars, or four-axle frame gondola cars, can transport oil products with a shipment capacity of up to 20 railcars.
There are also general cargo trains designed to transport packaged goods, such as packaged items, spare parts, medicines, and even pets. The railcars used for this purpose have a maximum load capacity of up to 20 tons.
In addition, there are freight trains for transporting BHP/ONS (Bahan Habis Pakai/On-Site Needs) with a cargo capacity of up to 20 tons per baggage car, which is connected to a series of executive, business, and economy passenger trains. This type of transportation can adjust departure and stop times to match the schedules of passenger trains and can serve the intercity shipping needs.
With all the potential projections aligned with the economic outlook mentioned above, the logistics transportation sector with railway transportation can become one of the highly strategic sectors in building the nation’s economic resilience.
Some specific sectors that may require attention include the distribution of food and essential commodities by developing centers and hubs as well as integrated smart storage networks in cooperation with cooperatives, in addition to the Belt and Road Initiative in the maritime sector.
In the future, it’s worth considering a railway network and infrastructure dedicated to logistics businesses. Also, more environmentally friendly power sources should be taken into account, following the concept of railway electrification that was previously proposed by the colonial Dutch government, emphasizing renewable energy sources such as electricity, as demonstrated by the construction of the Ubrug Hydroelectric Power Plant for the Jakarta-Bogor electric railway service.
Currently, according to the Climate Transparency Report 2022, the share of electricity generated from renewable energy sources in Indonesia is still relatively low. It is recorded that the contribution of renewable energy sources to the electricity mix reached only 19% in 2021.
Among this proportion, hydropower contributed the largest share at 8% of the electricity mix. This is followed by biomass and waste at 5.3%, geothermal energy at 5.1%, coastal wind energy (wind on shore) at 0.1%, and solar energy at 0.1%. Specifically, 62% of Indonesia’s electricity comes from coal, followed by natural gas at 18% and petroleum at 2%.
Of course, with the inauguration of the largest solar power plant (PLTS) in Southeast Asia at Cirata Reservoir with a electricity production capacity of 192 megawatts peak (MWp) by the President of Indonesia, the distribution map of renewable energy in Indonesia has changed significantly.
Similarly, with the operation of 21 GHP (Green Hydrogen Plant) owned by PLN, which can produce approximately 199 tons of hydrogen, railway infrastructure for logistics transportation can be designed in accordance with the development of power sources and technology.
The concept of GoA 3 (Grade of Automation) with ATP (Automatic Train Protection) that has been developed by INKA and implemented in trains and LRT (Light Rail Transit) service networks can be further developed for micro and macro logistics transportation. The concept of logistic feeder automation and regular freight trains with dedicated and automated tracks certainly presents an interesting idea, doesn’t it?
It is hoped that with more innovative and organized logistics management and services, especially in the rail-based transportation sector, efficiency and optimization in various related industries will occur. This, in turn, will lead to a healthier, more self-reliant, and resilient national economy.
