Logistics Cost May Hike by 30% as Fuel Prices Increase: Logistics Association

TEMPO.CO, Jakarta - The Indonesian Logistics Association (ALI) predicted that the impacts of rising fuel prices on the entire supply chain will be higher for the next month. The association’s chairman Mahendra Rianto said the cost of moving goods would likely increase by around 30 percent.

Consequently, this would trigger a domino effect on other operational costs, starting from vehicle parts to the goods transported.

“Transportation service may rise by 30 percent. Later, the price of spare parts for the transportation fleet will increase. This means, there will be a domino effect,” said Mahendra on Tuesday, September 6, 2022.

He explained that the hike in Solar prices will primarily affect the first and middle-mile transportation services that transport raw materials and semi-finished goods, while the hike in Pertalite prices will affect the last-mile transportation services that bring goods to consumers’ places or the final delivery destinations.

The industry players will thus adjust prices. ALI planned to discuss the adjustment of transportation service costs and all supply chain costs with industry players in the next 30 days.

Mahendra emphasized that his side will not be hasty in determining the guidelines for the price adjustment. “We will study it in one month. If there is a snowball effect, we will make adjustments,” he added.

Previously, the Indonesian Truck Entrepreneurs Association (Aptrindo) said that the plenary meeting on September 3 concluded a tariff increase for large trucks by 25 percent, medium trucks by 23 percent, and small trucks by 21 percent after the government announced the fuel price hike.

BISNIS.COM

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