RI's Logistics Fee Is Very High, Deputy Minister Of Industry Supports IAS' Plan To Develop Aerotropolis Area

JAKARTA - The high logistics costs are a separate obstacle for Indonesia. World Bank data even states that logistics costs in the country reach 23 percent of Gross Domestic Product (GDP) or higher than the average other Asean countries of around 14 percent.

Deputy Minister of Industry (Wamenperin) Faisol Riza also fully supports the plan of InJourney Aviation Services (IAS) to develop an aerotropolis area that integrates airports (airports) with surrounding areas, including industry, housing, warehousing, meeting places and retail businesses.

Faisol said that the presence of the aerotropolis region allows the growth of new business clusters to promise and have a wide multiplier effect of the economy, along with easy connectivity of goods and humans.

"In fact, the government supports the IAS initiation, because it is hoped that the ecosystem will contribute to encouraging and mobilizing various industrial sectors. Especially the cargo and logistics industry," said Faisol in a written statement, quoted Monday, January 13.

In terms of investment, said Faisol, the aerotropolis area has a number of advantages. First, benefiting from the transportation facilities that are already available and integrated with the road is adequate.

In addition, there is infrastructure support, both to meet water and electricity needs that are already good.

"This advantage must be mentioned in the area development plan, because not many people have it like this," he said.

Meanwhile, IAS President Director Dendi Tegar Danianto said that his party as a partner of the government had had a long experience for the last five years in the logistics industry and cargo terminals.

Currently, there are nine major air cargo hubs and 39 cargo terminals managed by IAS throughout Indonesia. The goal is to meet the needs of industrial distribution, both on the domestic scale of exports and imports.

"Compared to land and sea, cargo water tends to be more expensive. However, for some industries that focus on time sensitivity or need speed, we can enter. Prices are also quite competitive compared to other countries," he said.

In order to optimize the presence of this air cargo hub, Dendi continued, IAS plans to build an aerotropolis area of 80 hectares at Yogyakarta International Airport. Above the area, there will be occupancy, offices, sports centers, hospitals, retail businesses, warehousing, hotels and exhibition locations.

Later, the warehouse will be close and have special access to the airport, close to the MICE center for exhibitions. So, in the future it will become a single area to improve the economy at Kulon Progo.

The global logistics market is estimated to reach 12.68 trillion US dollars by 2025. This positive trend follows the predicted growth of e-commerce of 7.4 trillion US dollars by 2025. Thus, it could require innovation in the logistics sector that is more efficient.