Shipping with Sea Freight from Indonesia to Singapore

Amanda Lim

Aerial view of a port

For many international merchants, succeeding in Singapore’s market is the dream. From its stellar infrastructures and its residents enjoying the highest average income amongst Southeast Asian countries at USD 58,770 per year,1 Singapore’s landscape makes it conducive for up and coming businesses to set up shop and expand into the market.

With Indonesia sharing ocean borders with Singapore, there’s plenty of action on the supply chain front as well. Sea freight within Southeast Asia is noteworthy as trade can flow faster than other parts of the world using what is generally the slowest transportation mode. This is due to Southeast Asia having most major international sea freight hubs reasonably close to one another.

For businesses based in Indonesia, shipping to Singapore to tap into its geographic advantage is an attractive endeavour, but it helps to know the whole process of shipping your goods from Indonesia to Singapore.

Need to Ship to Southeast Asia via Sea, Air or Cross border Trucking? Get a quote here!

How does Shipping Sea Freight from Indonesia to Singapore Work?

Shipping with sea freight, or ocean freight, generally follows these steps:

  • Collection – Your shipping company collects the goods from your origin address. This could be your supplier’s address or your own warehouse in Indonesia.
  • Origin Customs – Your goods are transported to the Port and is cleared for export by Indonesian Customs
  • Loading – If your goods are Less-than-Container-Load (LCL), your shipment will be consolidated in a container with other businesses’ shipments. If they’re Full-Container-Load (FCL), the whole container is reserved for your shipments. While Indonesia has 7 international ports, the busiest one is Tanjung Priok (IDTPP) in North Jakarta.
  • Mid-mile – The shipment is sailed to Singapore.
  • Destination Customs – Once the shipment reaches Singapore, they will be processed by Singapore’s Customs. The main port is the Port of Singapore (SGSIN).
  • Unpacking (LCL) – For LCL goods, they’ll be unpacked from the shared container then loaded onto vans or trucks to prepare for the last mile delivery.
  • Last-mile delivery – After unpacking, or if your goods are FCL and use only a single mode of transport, the shipments will enter this stage to be transported to your destination.

Sea Freight from Indonesia to Singapore

Collection in Indonesia

Choosing between FCL and LCL sea freight arrangements changes the way your sea freight shipments will be handled, charged, and containerised. But what are some things to have in mind when choosing between LCL and FCL?

Should I ship by LCL or FCL?

Shipping Rates:

Shipping with an FCL order means you’ll pay for the whole container to transport your goods. At a certain weight break, FCL will be more cost effective than LCL in terms of cost per cubic metre (CBM).

LCL orders means you are charged by the amount of volume or weight of your shipments. This is measured in terms of CBM. LCL orders can be cheaper than FCL if you don’t need a full container for your shipments or don’t have the volume to justify the cost.

As a rule of thumb, FCL is a better arrangement than LCL when your shipment has filled about half of a container. This is around 10 cbm for a twenty-foot-equivalent (TEU) container. A TEU’s volume is usually between 23 to 25 cbm.

Flexibility and Speed:

LCL shipments require more handling due to the need to consolidate multiple shippers’ shipments into a single container heading to the same destination. This need for consolidation could also slow down loading times by 1 or 2 days and also makes sailing dates for LCL less flexible than FCL. FCL is usually faster as you have the entire container to yourself.

Handling:

Since LCL shipments need to first be consolidated into a container, get unpacked after clearing customs at the seaport then be assigned to a last mile truck before finally arriving at the destination address, this extra handling could increase the chances of items getting damaged or misplaced. However, you can check with your shipping partner on how they cover potential losses during transit.

On the other hand, FCL shipments can be packed and sealed at the container at the origin address then opened only once it arrives at the destination. This ensures that all of your items are in place during transit and you have control over the packing and sealing of your items. Depending on the nature of your shipments, your shipping partner will advise you on which of the two arrangements is better.

Looking to start shipping with FCL or LCL? Janio’s flexible freight solutions will help you get your shipments into Singapore fuss-free! Contact our representatives and get a quote today:

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Origin Customs Clearance in Indonesia

After collecting your shipments, it needs to be cleared for export by Indonesia’s Customs at the port. While most goods that are exported out of Indonesia are exempted from export duties and taxes, certain commodities will incur an export tax. These product types include:

  • Leather
  • Cocoa
  • Palm Oil
  • Minerals

For more information on taxable exports, you may look into this page from Indonesia’s Directorate General of Customs and Excise.2

Aside from this rule, exporting out of Indonesia would require you or your shipping provider to provide the following for origin customs clearance:

  • The exporter of record (usually your company) is a Legal Entity in Indonesia, in the form of either:
    • CV (Commanditaire Vennotschap)
    • Firm
    • PT (Limited Liability Company)
    • Persero (Limited Liability Company)
    • Perum (Public Corporation)
    • Perjan (Departmental Company))
    • Cooperative
  • Nomor Pokok Wajib Pajak (NPWP, a taxpayer number)
  • Having licenses applicable to the export issued by the government, such as:
    • Trading Business License (SIUP) from the Department of Commerce
    • Industrial License from Department of Industry
    • Domestic Investment Business License (PMDN) or Foreign Investment (PMA) issued by the Investment Coordinating Board (BKPM)
    • Export Identity Number (APE)

If you’re unsure of which documents you’ll need to export from Indonesia, you can check with our customs clearance experts to find out more.

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After checking these documents and clearing your shipments for export, your shipments can be loaded onto a vessel.

Loading and Mid-mile

After your shipment is cleared for export from Indonesia, it will be loaded onto a vessel that’s bound to Singapore.

The Benefits of Shipping from Indonesia to Singapore

Since Indonesia is an archipelago of over 17,000 islands, this country has extensive connectivity through sea freight.

The Indonesian government is working to develop a maritime highway across strategic ports in Indonesia.3 Some of these notable ports include Tanjung Priok (IDTPP), Tanjung Perak (IDTPE), Kuala Tanjung (IDKTJ), Soekarno-Hatta (IDMAK), Port of Bitung (IDBIT), and Port of Sorong (IDSOQ). Tanjung Priok, Indonesia’s busiest port located in Jakarta, has processed 7.6 million TEU in 2018 alone.4

Additionally, if you plan to use Singapore as a regional hub, shipping into Singapore grants you access to greater access to more SEA markets and trade lanes to the Eastern and Western hemisphere. Its strategic position as an exchange port to lanes in China and the USA opens up more possibilities for expansion for any business looking to grow beyond borders.

Sea freight between Southeast Asian (SEA) countries can be a better alternative to air freight in certain cases. Major sea ports in SEA can be found in a relatively small geographical area. Thus, sea freight shipments between these countries aren’t that slow, with some lanes being a few days slower than air freight. For the Indonesia-Singapore lane, sea freight delivery timing ranges between 5 to 8 days, compared to air freight’s 3 to 4 days for a fraction of air freight’s cost.

Considering the high competition for air cargo space due to grounded flights following COVID-19, sea freight is a competitive alternative for shippers looking to bring their goods outside of Indonesia to Southeast Asian markets.

Customs Clearance in Singapore

  • Commercial Invoice
  • Bill of Lading
  • Packing List
  • Certificate of Origin
  • Customs Import Declaration
  • Unique Entity Number (UEN)

The importing party must first register for a UEN with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore and activate its customs account prior to importing into Singapore. Then, you’ll need to apply for an Inter-Bank GIRO with Singapore Customs so that you can pay for the relevant import duties, taxes and other fees to Singapore Customs directly.

Once your UEN and Inter-Bank GIRO are set up, the company will need to apply for a customs import permit via TradeNet. This can be done by the importing party or through a declaring agent or freight forwarder.

When your goods have cleared customs, it enters the last mile delivery stage. How this is handled depends on whether the shipments are FCL or LCL.

Last Mile in Singapore

If your shipment is shipped with LCL, your shipping partner will unpack the shipment at a container freight station (CFS) at the destination port prior to entering last mile delivery. Your shipment will be transported as loose cartons or as pallets depending on how it was packed prior to entering the container. Shipments will be transported via vans or trucks depending on the size of the shipment.

If it is shipped via FCL, the container itself will be shipped to your consignee’s address during this leg of the journey. The container is first loaded onto the chassis of a lorry and then transported to the consignee’s address. Then the goods are unpacked at the address before a haulier comes back to bring the container back within a few days from unpacking.

What is Sea Freight and When Should You Use it?

Sea freight is the transportation of goods within containers by sea. It is also the most common means of transporting goods, carrying 90 per cent of goods worldwide.x This mode of transport also has the benefit of being cost-efficient and comparatively environmentally friendly.

However, choosing sea freight isn’t always the best option. This mode of transport works well based on factors such as:

  • The weight and size of your shipment
  • The products being shipped
    • Fragility
    • Perishability
    • Hazard
    • Shipment Speed

Although not as fast as air freight, sea freight may be a better option when you’re prioritising cost savings over speed. Sea freight is also great for a wider range of goods that may be too costly to ship via air freight like bulky or oddly-sized items, or too dangerous to meet air freight’s tight restrictions on what can be shipped.

For instance, products containing gases, all things flammable, toxic or corrosive items like batteries, magnetic substances like speakers, perishable items and more, generally can’t be shipped via air freight.

Sea freight between Southeast Asian nations also has the added benefit of only being slower by a few days compared to air freight while costing much less.

This is great news for eCommerce merchants during the current COVID-19 pandemic. If you’re currently using Janio’s air freight solutions, switching to sea freight involves the exact same steps. You simply need to tell us that you’d like your parcel shipped by sea freight and we’ll take care of the rest.

 

To find more on the latest news on logistics and eCommerce in Southeast Asia, consider signing up for our Janio newsletter.

If you’d like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, come and have a conversation with us.

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References:

  1. World Data: Average income around the world
  2. Official Website Direktorat Jenderal Bea dan Cukai
  3. PwC: Maritime highway: Keeping the spirit and hope of people in eastern Indonesia
  4. World Shipping: Top 50 World Container Ports
  5. business.un.org – International Maritime Organisation
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