Indonesia's Logistics Ranks Drop, Kadin: Don't Compare RI To Singapore

Illustration. (Photo: Unsplash)

JAKARTA - The Logistics and Supply Chain Agency, the Indonesian Chamber of Commerce and Industry asked a number of parties, including observers, not to compare the quality of logistics with Singapore as a result of the decline in Indonesia's Logistics Performance Index (LPI) rankings because the conditions of the two countries were not comparable.

"We cannot compare Singapore's international shipping with our international shipping because we are the final destination while in Singapore it is a transhipment shipping. From there we can see, it should be measured with the aspects of the archipelago," said Chairman of the Logistics Agency and Supply Chain of the Indonesian Chamber of Commerce and Industry Akbar Djohan to the media at the Kadin Office, Jakarta, quoted from Antara, Thursday, July 20.

Akbar said that Indonesia's condition as the largest archipelagic country in the world with more than 17.50 islands is a blessing as well as a very big challenge. So that the standard four LPI pillars which recorded a decline, he considered, must be re-measured so that the results are more concrete.

"So the four pillars must be remeasured. So that there is a precise marking limit and can also describe a concrete situation," he said.

He further said that the logistics sector continues to show good performance. The Central Statistics Agency (BPS) noted that the transportation and warehousing sectors grew the highest in the first quarter of 2023 with 15.93 percent (yoy).

Kadin Indonesia also projects that Indonesia's logistics industry this year has the potential to continue to grow above 6 percent. This potential is supported by the e-commerce market, which is still growing in Sera, starting normally with community activities after the revocation of COVID-19 pandemic status.

Nevertheless, Akbar acknowledged that the unevenness of connectivity infrastructure which causes logistics costs to become high is still one of the big challenges in Indonesia. So, the development of infrastructure connectivity, he assessed, must prioritize logistics cost efficiency, which is considered very important.

"How is the standardization of the island nation that we must pursue. How can there be a dashboard that can present it in a transparent and real time manner so that local stakeholders can carry out their policies quickly and precisely," he said.

Meanwhile, the World Bank lowered its LPI Indonesia rating from 46 to 63 with a score of 3.15. The index was far behind Singapore, which was in first place with a score of 4.3 and Japan in 15th place with a score of 3.9.

In a World Bank report quoted on Tuesday (18/7), the LPI Indonesia score this year fell to 3.15, far behind Singapore, which was in first place with a score of 4.3 and Japan in 15th place with a score of 3.9.

The six indicators that are the benchmarks of the World Bank in providing LPI scores are customs, infrastructure, international shipping, competence and logistics quality, timeliness, as well as tracking and tracing.

Two indicators, namely customs, rose from 2.67 in 2018 to 2.8 in 2023 and infrastructure received 2.9. Meanwhile, four other indicators fell, namely international shipments weakened to 3, competence and quality logistics 2.9, timeliness to 3.3 and tracking and tracing to get 3.