Lowering logistics cost: Govt asked to continue port improvements
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Penurunan biaya logistik: Lanjutkan perbaikan pelabuhan
11 October 2023
By: Lorenzo A Mahardhika & Hendra Wibawa
Jakarta - The government has been asked to continue developing port infrastructure in Indonesia to reduce the burden on shipping companies, which in turn will lower national logistics costs.
President Director of PT Samudera Indonesia Logistik Kargo (Samudera Indonesia Group) Yudi Riyadi explained that the government needs to develop port infrastructure to continue growing Indonesia’s logistics sector.
According to him, there are several things the government can do to improve the national logistics sector, including by improving and developing port infrastructure.
Yudi hopes that the government will continue to invest in developing infrastructure to support logistics activities, such as roads and ports. This investment will have a positive impact in streamlining the distribution of goods.
“With the continuation of this investment, we can build good economies of scale so that shipping companies can also improve their services, both in terms of routes and frequencies,” he said at the event Improving Logistics Performance through Utilisation of National Logistics Ecosystem Services in Jakarta on Tuesday (10/10).
Apart from continuing to develop port infrastructure, Yudi also emphasised that the government must be consistent and supervise the implementation of regulations.
Currently, Yudi said that the government’s efforts to develop the logistics sector, such as the National Logistics Ecosystem (NLE), have helped the shipping sector in terms of service speed and accuracy.
He said that the implementation of existing policies must be monitored continuously. This aims at ongoing improvements to the national logistics system.
Furthermore, he said that it is also necessary to improve coordination between the industrial sector and the government. Yudi explained that active collaboration between shipping companies and the government would help increase the efficiency and effectiveness of the policies to develop the national logistics system.
He added that collaboration between the private sector, such as shipping companies, and the government could take place by empowering these business players.
According to him, cooperation between companies and the government can increase the role of the private sector in developing infrastructure and innovation that support logistics.
In addition, synergy between the private sector and the government also needs to be improved. Yudi gave an example of this synergy in the form of support from private companies to implement government policies to improve national logistics.
At the same event, President Director of PT Pelabuhan Indonesia (Persero) Arif Suhartono emphasised that there are two measurable indicators of logistics costs, namely the flow of goods and the flow of documents.
“If the flow of goods is good, but there are problems with the documents, it will be an obstacle,” said Arif.
From Pelindo’s perspective, according to him, the role of ports in reducing logistics costs is to shorten the duration of cargo stay and port stay for ships.
He believes that ports are the main key in the entire supply chain. He continued that improving port services would have an impact on the overall supply chain costs.
Moreover, improving the quality of port services could encourage more efficient maritime connectivity.
“The key is to shorten the port stay and cargo stay. What we are doing is certainly transforming ports to make them more efficient,” he said.
Standardisation
However, he noted that there was a large gap between port services in the western and eastern regions of Indonesia.
Under the current conditions, there is no standardisation of port services. After the merger of four port state-owned enterprises (SOEs) on 1 October 2021, he stated that Pelindo had a challenging task to carry out port transformation in almost all ports managed by the state-owned company.
Regarding the improvement of logistics performance through the utilisation of National Logistics Ecosystem services, Arif stated that collaboration among stakeholders in the logistics sector is necessary.
To digitalise the port business, he believes it is necessary to improve the management of all stakeholders and customers.
“Participation from stakeholders plays a crucial role in improving the quality of the national logistics ecosystem,” he said.
Previously, Pelindo was optimistic about achieving revenue of Rp31 trillion this year, supported by the progress of port standardisation after the merger on 1 October 2021.
Pelindo management is also confident that it can achieve a profit of Rp3.8 trillion as targeted in the 2023 company work plan and budget (RKAP).
Based on the 2023 RKAP, Pelindo sets operating profit and net profit at Rp6.38 trillion and Rp3.81 trillion respectively.
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