Logistics business operators estimated that the national logistics services industry in 2014 will maintain double-digit growth trends and is projected to reach USD170 billion, equivalent to Rp1.951 trillion. Projection of logistics services next year is also supported by an increase in the distribution of goods related to the 2014 general election. The estimate is higher than the estimate by the end of this year which will reach USD 150 million, equivalent to Rp1,722 trillion. The projected growth in the next year is in line with the development of network and supply chain of logistics companies operating in Indonesia.
However, Chairman of the Indonesian Logistics Association (ALI), Zaldy masita, in Jakarta on Monday (November 11), believed that the development of infrastructure which has not been significantly implemented by the government will keep the national logistics cost high in the next year. In addition, the implementation of the national logistics system (sislognas) will not run as its should be, will suppress growth of the national logistics industry in the next year. Not to mention the rules and regulations which are so numerous and overlapping. “In this country, logistics costs are very expensive, because there is no significant development of infrastructure”, Zaldy said.
He explained the industry competitiveness remain a fixed price in order to win the business competition in ASEAN and the global arena. Therefore, logistics problem, which is increasingly acute and cripples competitiveness, should immediately be fixed. Handling of logistics problems which has not been optimal until now will make the national industry a loser. In the past year, the World Bank put Indonesia’s competitiveness in logistics at 59th position out of 155 countries. This rank is far below Singapore, Malaysia, Thailand and Vietnam. He saw that weak domestic logistics competitiveness is visible from a number of indicators such as customs, infrastructure, international shipments, quality, and logistics competence. There are also aspects of tracking, tracing, and time management.
According to him, poor planning and government’s commitment in infrastructure development triggered a slowdown in Indonesia’s competitiveness. Government planned to focus more on the development of ground infrastructure, such as toll roads, which sometimes lead to problems of land acquisition. He added that the disparity in the development of transportation and logistics infrastructures triggers a slowdown in Indonesia’s competitiveness. In fact, inter-regional connectivity and intermodal integration should be government’s attention, not just focusing on land acquisition for road infrastructure.
Entrepreneurs urged the acceleration of improvement of port, railway, airport and land transportation infrastructures to encourage the national logistics competitiveness. He said that in addition to logistics support infrastructure which is urgently needed, protection from the central government to local logistics business continuity is needed in the midst of intense competition in the business sector currently and ahead of the implementation of the ASEAN Economic Community 2015.
He said that national logistics connectivity is absolutely necessary considering that Indonesia is an archipelagic country, and of course with the support of good transportation infrastructure in all modes. Although it is already mandated in Sislognas, but he saw that the preparation of logistics infrastructure was not in accordance with the expectations of the businesses.
He considered that high logistics cost is a serious problem that inhibits the growth of Indonesian economy. According to a report published by Bandung Institute of Technology based on inputs from World Bank experts, national logistics costs in Indonesia is 24% of gross domestic product (GDP) or higher than the neighboring countries. The annual report analyzes and provides an overview of the progress in the tackling of logistics problem in Indonesia.
Business News - November 13, 2013