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Bisnis Indonesia - Shipping & Logistics Forum 2024: Taktis pangkas ongkos logistic
2 May 2024
By Hendra Wibawa
What is the connection between Indonesia being an archipelago and its high logistics costs? Bisnis Indonesia Shipping & Logistics Forum 2024 highlighted that the link between the two is exceptionally strong.
The forum held at Raffles Hotel Jakarta on Tuesday (30/4) revealed that the data studied by the National Development Planning Agency (Bappenas) in collaboration with SIRI using a new methodology shows that, in 2022, logistics costs amounted to 14.1% of the gross domestic product (GDP).
In detail, the land transportation sector accounts for 7% of logistics costs, sea transportation 3.6%, air transportation 0.8%, warehousing 1.5%, and administration 1.2%.
The study found that national logistics costs were dominated by land transportation. However, Indonesia is an archipelago with 16,000 islands.
Therefore, the Sea Transportation Director General of the Transportation Ministry Antoni Arif Priadi said that Indonesia could not be separated from the high logistics cost problem due to the dominance of the land transportation portion.
“The number one problem is logistics costs. Logistics costs is extremely relevant as we are an archipelago,” he stated in the first session themed Navigating the Future of Logistics and Maritime with Innovation and Sustainability.
To reduce logistics costs, the Transportation Ministry is currently establishing a maritime cluster. The maritime cluster identifies the role of relevant stakeholders within the maritime industry.
The cluster establishment is required so that ministries and institutions can play their roles in reducing logistics costs. “We are preparing the cluster. We are determining who is in the first layer, second layer, and so on. Institutions must be interconnected,” Arif stated.
Another problem that must be addressed is the abundance of old ships in Indonesia. Arif pointed out that the average age of ships in Indonesia exceeded 15 years, leaving them with only about 10 years of operational life.
This condition can hinder Indonesia in realising the net zero emission target by 2050, which was underlined by the International Maritime Organisation (IMO).
PT Pertamina International Shipping (PIS) President Director Yoki Firnandi stated that the company’s fleet has implemented IMO standards, such as double hulls for tankers.
The implementation of IMO standards is an obligation for the Integrated Marine Logistics Subholding of PT Pertamina (Persero) that focuses on the energy distribution business.
“In the future, we will expand by also handling the chemical and dry bulk segments,” Yoki said.
Therefore, he revealed PIS’ big plan to look for additional capital to support its sustainable business growth.
PIS expansion
PIS is planning to conduct an initial public offering (IPO) in 2025. “The IPO must be thoroughly planned. For now, we are targeting next year.”
According to him, the additional capital will support the realisation of PIS’ aggressive growth target. His company is targeting a market capitalisation of US$7 billion with a revenue of US$9 billion in 2034. Last year, PIS’ market capitalisation stood at US$3.3 billion, and it was set to reach US$4 billion this year. “Our target is to realise US$9 billion in capital expenditure by 2034. We are targeting our investment cost to reach US$8 billion in the next 10 years,” he stated.
On the contrary, Indonesian Forwarders Association (INFA) Chairperson Akbar Djohan revealed that green logistics implementation in Indonesia needed the government’s support.
The government's support could resemble Europe's approach to electric vehicle incentives. Akbar noted that in Europe, government incentives go beyond tax relief, extending to discounts of up to 30%.
Akbar continued that several logistics and forwarder companies in INFA have implemented green logistics. One of the implementations is through green warehouses that use solar panels for energy. “Similar policies in other countries must be replicated in Indonesia for green logistics,” Akbar said.
During the occasion, Indonesian National Shipowners’ Association (INSA) Central Executive Board Chairperson Carmelita Hartoto revealed that various opportunities and challenges were overshadowing the shipping industry.
One of the factors supporting the shipping sector is the construction of Nusantara Capital City (IKN). IKN boosts cargo volume, particularly for construction materials transported via shipping.
