Pelindo claims it also contributes in reducing logistics costs
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.
Investor Daily - Pelindo klaim turut tekan biaya logistik
21 September 2023
Jakarta - PT Pelabuhan Indonesia/Pelindo (Persero) claims that they have contributed to the reduction of logistics costs in Indonesia through policy transformation. In accordance with the newest calculation of the National Development Planning Agency (Bappenas), logistics costs in Indonesia in 2023 is only 14.1% of the gross domestic product (GDP) and logistics costs for exports in Indonesia is only 8.98% of the GDP, which is far below the calculation of the World Bank in 2018 when logistics costs reached 23.8% of the GDP.
“As one of the main players in the logistics sector, since October 2021, Pelindo has been transforming to play a role in the reduction of logistics costs,” Pelindo President Director Arif Sihartono said in his official statement in Jakarta on Wednesday (20/9/2023).
According to Arif, on 1 October 2021, State-owned Enterprises (SOE) Ministry merged four port SOEs into PT Pelindo (Persero). After the merger, Pelindo established four subholdings or subsidiaries. The four subsidiaries are PT Subholding Pelindo Terminal Peti Kemas (SPTP), PT Subholding Pelindo Multi Terminal (SPMT), PT Subholding Pelindo Jasa Maritim (SPJM), and PT Subholding Pelindo Solusi Logistik (SPSL).
“The establishment of the four subsidiaries allowed them to focus on each service sector, so their performances increased,” he stated.
Transformation on the operational level is directly carried out by the subsidiaries. Several steps that have been taken include shortening port stay and cargo stay as well as merging service and payment systems through an online digital application. It is meant to make port operation more efficient, which will benefit Pelindo as well as port and terminal service users.
He continued that the result of the transformation could be seen from the growth of the operational performance. Cargo flow in 2022 reached 17.2 million twenty-foot equivalent units (TEUs), which increased by 1% compared to 2021. Cargo traffic grew 160 million tonnes, which grew 9% from the previous year. Ship traffic that is served by Pelindo reached 1.2 billion GT, which increased by 1%. Meanwhile, passengers grew 86% to 15 million people.
Through the transformation process that makes resources more efficient and optimised, Pelindo successfully logged a net profit of Rp3.9 trillion (audited), which increased by 23% compared to the previous year.
“Merging Pelindo has created a synergy among entities in Pelindo Group, so port management can be carried out in a centralised manner and more optimally,” he explained.
Pelindo’s contribution to the state in 2022 also increased to Rp7.2 trillion, which increased by 54% compared to the previous year that reached Rp4.7 trillion. The contribution comes in the form dividend payout, taxes (income tax, value-added tax, and land and buildings tax), non-tax state revenue (PNBP), and concessions.
Bambang Gunawan from PT Salam Pacific Indonesia Lines (SPIL) also appreciates Pelindo’s services that are now quick and efficient. Even though not all ports receive additional equipment, he said that almost all major ports in Indonesia improved.
“For example, in Sorong, no one worked on a Sunday. Now, they carry out stevedoring [activities] since morning,” Bambang said during an occasion.
“It is incredible,” he added.
Currently, SPIL operates six cargo ships that have a capacity of around 1,000-1,500 containers to carry out long hauls from Belawan to Pekanbaru, Jakarta, Surabaya, Makassar, Ambon, Sorong, and Jayapura. Hence, the operating costs of SPIL can be reduced further.
“Previously, travel time took 42 days. Now, it only takes 36 days,” Bambang said.
Decreased by 40%
Meanwhile, logistics costs in Indonesia have decreased by 40% in the last five years. According to Bappenas, logistics costs in Indonesia in 2023 is only 14.1% of the GDP and logistics costs for exports in Indonesia is only 8.98% of the GDP. In 2018, the World Bank logged that logistics costs in Indonesia reached 23.8% of the GDP.
“Logistics costs are calculated based on Indonesia’s economic realisation until 2022,” National Development Planning Ministry Secretary/Bappenas Principal Secretary Taufik Hanafi said recently.
The logistics cost calculation is the result of a collaboration among Bappenas, Economy Ministry, Statistics Indonesia (BPS), universities, and business players.
National Development Planning Minister/Bappenas Head Suharso Monoarfa also explained that the investment trend in Indonesia in the last four years has continued to increase to always surpass the target. In 2019, with a target of Rp792 trillion, investment realisation reached Rp809 trillion. In 2022, investment realisation reached Rp1,207 trillion, which surpassed the target of Rp1,200 trillion.
However, Suharso said that investments in Indonesia still have a high incremental capital output ratio (ICOR) reaching 6 points. The index refers to the efficiency of the investment sector. A high ICOR means that the investments are not efficient. The ratio is also the highest among Asean countries.
“One of the reasons why our ICOR is still high is logistics,” Suharso said.
