Maersk’s $3bn Indonesian Quagmire


The world’s leading container shipping line, Maersk, is looking to pour US$3bn into its logistics business in Indonesia over the next five years; however, the carrier may have difficulties completing its plans as a result of a shipping law currently being enforced against foreign shipping lines, according to the Jakarta Globe.

Since 1958, Maersk has transported cargo in and out of the country and now sees more potential in domestic shipping in the region, but Indonesian law states that only domestically-owned companies can ship cargo in the archipelago islands.

Rini Soemarno, Enterprise Minister for Indonesia, said: “[Maersk] expressed interest to transports goods within our territory in order to reduce logistics costs. But they stumbled upon our shipping law that requires majority shareholders to be locals. They wanted to be the majority.”

Indonesian President Joko Widodo is currently working on a plan to connect the eastern part of the country with the manufacturing centres in the western region.

The government is now aiming to attract more investment by protecting certain business sectors from foreign control, which is hopes will rejuvenate the economy.

It was previously reported that Indonesia is working to build a Rotterdam-themed port called ‘the Port of Jakarta’ which will operate as a fully-integrated port.

As part of its overall strategy, Nils Anderson, CEO of Maersk said his company is focused on maintaining its global market share and will be pulling out capacity on major shipping routes to tackle the dip in cargo demand.

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