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Improve Logistics or Miss the Boat, Ministry Warns
Faisal Maliki Baskoro | September 15, 2011

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Jeanne Hachette
1:30pm Sep 16, 2011

Just give the keys of the country to Singapore and send all the government members and useless politicians to make snowballs in Kolina for 10 years.

DrDez
11:02am Sep 16, 2011

all talk no plan - preparing for blame when it fails - add to the 30% another 5% minimum for bribes another 10% for delays another 5% for things that go missing .... OK the add ons are guess but the point is valid

We are missing the boat on job creating investment BIG BIG time

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The State Enterprises Ministry says the nation’s logistics sector will need to lift its game if Indonesia is to be an active part of a regional network scheduled to start four years from now.

Ministry official Sumaryanto Widayatin said on Thursday that state companies should speed up development of national connectivity in line with the Master Plan for the Acceleration and Expansion of Indonesian Economic Growth (MP3EI).

In the World Bank’s 2010 Logistic Performance Index, Indonesia ranked behind fellow Association of Southeast Asian Nations members Singapore, Malaysia, Thailand, the Philippines and Vietnam because of high ports charges and poor port infrastructure and services.

“We need to cut logistics costs,” Sumaryanto said. “Today, logistics account for about 30 percent of production costs and 24 percent of our gross domestic product, while our neighbors like Vietnam, Thailand, and Malaysia have reduced logistics costs to 10 percent.”

The Asean Economic Community, slated to start in 2015, plans to develop a single market involving the free flow of goods, capital and skilled workers. The network greater competition between businesses in the region.

In a bid to reduce logistics costs and promote connectivity, 16 state enterprises on Thursday signed a memorandum of understanding to form the Indonesia Logistics Community Services.

The ILCS represents cooperation between state sea port operator Pelindo II and state telecommunication company Telekomunikasi Indonesia to develop an integrated electronic system for logistic services. Other signatories are state companies in the transportation and infrastructure sectors who intend to support national connectivity.

“Enhancing national connectivity, in hard infrastructure or soft infrastructure, is a must,” Pelindo II president director Richard Lino said at the signing of ILCS in Jakarta. “The ILCS goal is to connect centers of growth and connect remote and under-developed areas.”

Richard said that ILCS would improve the ease of monitoring the flow of goods, documents, and payments, while also simplifying the management of assets such as trucks, ships and cargo containers. It could also hasten often-time consuming administrative processes.

“Indonesia needs an integrated and efficient logistics system. It needs to be able to reduce logistics costs and time, and ensure security of the goods,” Richard said.

Pelindo II is investing in new cranes that will cut container loading time from nearly six days to three.

Other projects to boost national connectivity is the company’s plan to build a Rp 1 trillion ($114 million) port in Sorong, West Papua. Pelindo II is also participating in a tender to build a $2 billion port in North Jakarta.

Telkom is planning to build a national broadband service with an investment estimated at Rp 21 trillion.