Thursday, 1 May 2014


The Logistics Performance Report Index [LPI] 2014 promoted Indonesia’s position in terms of logistics by 6 graders to level against the previous position of 59. However LIPI’s report which had been spread still had no formal recognition from the World Bank as a body to make logistic survey since 2007. In a report based on the World Bank’s evaluation Indonesia was in the 53th position with average percentage of 66.7%.

Deputy Chairman of the Indonesia Logistics Association [ALI] Mahendra Rianto stated in Jakarta on Wednesday [16/4] that Indonesia was still at the lower-middle income group together with fellow ASEAN country Vietnam. On the other had Promotion of ranking by LPI was still regarded as unsatisfactory by logistics companies. They believed that the promotion could not be referred to as criteria for national logistics progress especially to compare with Asean states. The report placed Singapore in 5th position, Malaysia 25th and Thailand 35th. Indonesia was only close to Vietnam at 48th level.

Mahendra supported Government’s policy to reduce import consumption. According to Mahendra the Government must be serious about running national logistics system which protected local business people. He said that supply shortage and imbalanced inter-provincial supply caused logistics costs to soar high. The Government was obliged to seek for solutions through full understanding of the implementation of the national logistics system [SISLOGNAS]. Meaning the Government should not focus on strengthening of infra structure but ignore building of industrial centers.

He said that the Government should map out the potential of commodities in all of Indonesia. Thereafter the Government could identify the market demand so the commodities would make infra structure relevant. So far infra-structure building were underway but there was no attention in premium commodities in the regions. He recommended the Government to realize the east-gate west-gate policy for export activities.

Data of Supply Chain Indonesia [SCI] had it that growth of logistics service in 2014 was predicted to reach 14.7% with transactions amounting to Rp.8,816 trillion. However, of that amount, national commodities constituted only 23.8%. Mahendra mentioned that national commodities of the processing industry, non oil-gas sector, had the potential to yield transaction of logistics services worth Rp.237.5 trillion. This sector consisted of food and beverages industry, machineries, transportation equipments, and chemical products. The second sector which put added value to logistics services was the agricultural sector. The total transaction was around Rp.183.3 trillion, originating from logistic cost of industrial plantation products, fishery, and plantation.

He said that growing income of the middle class group would increase demand for goods, which eventually jacked up demand for transportation. The condition would advantage sea transportation. This industry was predicted to grow by 4.3% with total transportation volume of 1.04 billion tons per year. Beside the volume of railway cargo would increase by 8.5% to become 25.5 million tons against 23.6 tons. Meanwhile volume of goods delivery also increased by 15.3% to become 1.34 million tons. Soekarno Hatta airport as the main gateway to international trading would post cargo volume growth around 5% - 7%.

He further disclosed that so far, as written in the Blueprint of the National Logistics System [SISLOGNAS], the Government had not stipulated strategic commodities. The point was that stipulation downturn of logistics cost and to supply goods. At this point, national logistics companies had the opportunity to spread wings at regional level as there was public trust to do it. (SS) 

Business New - April 23, 2014

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