Indonesia’s Logistics are Inefficient, says World Bank
Friday, 11 November, 2011 | 12:35 WIB

TEMPO Interactive, Jakarta:The World Bank says that Indonesia’s logistic export expenses are higher than neighboring countries as Indonesian ports are below international standards.


As a result, World Bank Indonesia official Henry Sandee said that Indonesia could not directly export its products to Europe. As a result, exports must go through Malaysian and Singaporean ports.


Henry said the capacity ports, such as Tanjung Priok, could only accommodate ships carrying 4,000 containers. Meanwhile, ports in Europe and Malaysia can accommodate ships carrying 14,000 containers.


The logistical cost from factories to Indonesian ports is also inefficient. The logistical costs from a Cikarang-Bekasi factory to Tanjung Priok Port, for example, can reach US$775, more than a third higher than Malaysia.


The World Bank has suggested that the government reduce logistical costs and coordinate with businessmen to discuss regulations.


Based on the Logistic Performance Index (LPI) released by the World Bank in 2010, Indonesia was ranked 75th out of 183 countries. A recent logistics survey conducted by the Bandung Institute of Technology (ITB) showed that Indonesia’s logistical cost reached 24 percent of GDP or higher than Thailand’s 16 percent.


“Indonesia has made much improvement, but other countries do it faster,” added Henry.


Vice President Boediono promised to carry out several action plans to reduce costs. The first plan is to create a proper transportation system by building the necessary infrastructure. Construction of the north Java railway is expected to be complete by 2013.


The second plan is to mobilize state-owned enterprises to increase national logistical capacity.


Deputy Trade Minister Bayu Krisnamurthi said that Indonesia is an archipelagic country and cannot be treated the same as other countries in terms of logistical costs. Nevertheless, the government is still targeting a logistic cost ratio of 21 – 22 percent by 2015.


National Development Planning Minister Armida Alisjahbana said the government was accelerating the implementation of a regulation to reduce high logistical costs and coordinate with businessmen through the Indonesian Chamber of Commerce and Industry.



FEBRIANA FIRDAUS | R. R. ARIYANI