Logistics Costs Slam Competitiveness

TEMPO.CO, Jakarta - Chris Kanter, chief patron of the Indonesian Logistics and Forwarder Association (ALFI), said the high cost of logistics and infrastructure constraints exacerbate Indonesia's competitiveness in attracting investment. The two problems, he said, stemmed from government policies that are not integrated into the logistics industry.

Chris said the proposed national logistics system has not been properly implemented. "Imagine how much investment we can garner if we lower the cost of logistics and provide inadequate infrastructure," Chris said in a discussion inJakarta, yesterday.

The 2013-2014 Global Competitiveness Index released by the World Economic Forum showed that Indonesia's competitiveness in infrastructure and logistics ranked at number 82 of 148 countries. Three infrastructure sectors with the lowest ranks are port services, power supply and highways quality.

Indonesia's logistics costs are also far more expensive than other countries'. Research conducted by the Ministry of Industry showed that the country's logistics cost to Gross Domestic Product (GDP) ratio stood at 23.6 percent. Meanwhile the ratio of total logistics cost to the production costs of the industrial sector reached 22.8 percent.

In theUnited States, Japan, and South Korea, the ratio of logistics cost against the cost of production perched in the range of 9.9 to 16.3 percent. Chris asked the government be serious in supporting the efficiency of the logistics industry through the development of adequate infrastructure.

ALFI chairman Iskandar Zulkarnain said that freight transport infrastructure development is very important given the fact thatIndonesiais an archipelago. According to Iskandar, the high costs borne by the industrial sectors are caused by inefficient logistics system hampered by infrastructure. "An archipelago should have better infrastructure."

Indonesia's logistics infrastructure, particularly in the marine sector, is also questioned the Ombudsman. The state's public service watchdog, the Ombudsman of the Republic of Indonesia (ORI), found five cases of maladministration within the dwelling time process in four national ports: Tanjung Priok, Tanjung Perak, Belawan and Soekarno-Hatta (Makassar). ORI chairman Danang Girindrawardana said the five forms of maladministration are continuous delays, procedure irregularities, incompetence, authority abuse, and unauthorized charges by officers.

NURUL MAHMUDAH | AYU PRIMA SANDI