Indonesia Gov’t Integrates National Logistics System to Reduce Economic Barriers
Indonesia Coordinating Minister for Economic Affairs Darmin Nasution and Entrepreneurs discussed about grand design National Logistics System in Ministry Office in Jakarta. Photo by The Ministry.

JAKARTA (TheInsiderStories) – Indonesian government aimed to integrated the national logistics system to reduce economic barriers, said senior minister today (02/06).

Coordinating Minister for Economic Affairs Darmin Nasution explained, the grand design not only optimizes the development of integrated physical infrastructure but also optimizes digital aspects in order to be able to compete in the era of the Industrial Revolution 4.0. Thus the national export performance can be optimized.

“A good logistics system is needed to develop the industrial sector to produce efficiency,” he said at his office.

So far, the inadequate national logistics system is still a stumbling block for logistic entrepreneurs, which has a negative impact on the competitiveness of domestic products.

Therefore, the government and business actors in the logistics sector have conducted discussions to design the challenges facing the world of logistics as the basis for the preparation of the National Logistics System grand design based on time, namely for short-term, mid-term, and long-term interests.

In addition, several other issues discussed include sea ports, airports, sea transportation services, and the Bonded Logistics Center, food logistics, human resources, the Indonesia National Single Window portal, and disaster logistics.

Nasution stressed that efforts to improve logistics efficiency were part of the policy of increasing short-term exports being formulated by the government. Important things that will be arranged to encourage the logistics efficiency, includes the implementation of the Online Delivery Order system, InaPortNet system, relaxation of automotive export procedures, and construction of automotive centers.

The minister also noted, the strategic issues on export-import logistics and food logistics become government attention. “These two things have complex aspects, beyond technicalities, which need to be developed. We need to develop a comprehensive action plan to execute this,” he said.

Meanwhile, chairman of the Indonesian Logistics and Forwarders Association Yukki Hanafi appreciated the government’ support for the logistic problems in the country so the players be able to compete with other ASEAN countries.

As we know, the enthusiasm for improving national logistics performance consistently during the President Joko Widodo’ Working Cabinet by building various infrastructures.

The construction of this infrastructure has positive implications for the logistics efficiency index, as seen from the increase in the Logistics Performance Index (LPI) rating issued by the World Bank. Over the past two years, Indonesia has climbed 17 ranks, from position 63 in 2016 to number 46 in 2018.

However, the Association of Indonesian Express Delivery Services revealed that there had been an increase in logistics in the aircraft cargo tariff sector by several airlines. This naturally increases the tariff for shipping goods using airline services.

Chairman of the association Mohammad Feriadi gave an examples, PT Garuda Indonesia Tbk (IDX: GIAA) airlines have raised a total of six times the cargo tariff since June 2018. Even as of January 2019 it has exceeded 300 percent. The increase in airline cargo rates has been carried out since 2018.

The increase in tariffs also occurred in the toll road sector. Therefore, the Indonesian Truck Entrepreneurs Association expects the Trans Java Toll tariff to go down by 20 percent because the tariff affects the logistics costs for truckers.

“We feel that there are implications for costs that rise in our cost structure. So setting it is not possible because we feel that the toll component has a significant effect on our cost structure, “said Deputy General Chairman Nofrisel.

He said the Trans Java Toll tariff for large vehicles to exceed Rp 1 million had a very significant effect. Because, toll rates are only one of the structure of logistics costs in addition to fuel and driver fees.

US$1: Rp14,000

Written by Daniel Deha, Email: theinsiderstories@gmail.com

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