Erick Thohir: Indonesia's Logistics Industry Faces Many Challenges, Including The Problem Of Container Shortage

Minister of SOEs, Erick Thohir. (Photo: Doc. Ministry of SOEs)

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir revealed that the national logistics industry faces many challenges in facing global competition. One of them is the lack of containers which causes delays in delivery.

"Indonesia's logistics industry faces many pressures and challenges, regarding the vulnerability of global supply chains that is now being felt. Containers are very short," he said in a virtual discussion, Tuesday, November 23.

Erick also explained that he had just had a meeting with the South Korean Ambassador to discuss the potential for urea exports. However, the current condition is that Indonesia lacks containers to meet South Korea's demand.

"I just had a meeting with the South Korean Ambassador, where for the first time, Korea lacked urea for industry, asked us to export there and these are things that are happening at this time," he explained.

Then, continued Erick, the second challenge is global trade pressure due to the implementation of a number of trade war protectionism policies and increased taxes.

"This is also very influential, where we are also asked for our natural resources to be sent abroad as much as possible. That is indeed something that we must balance this policy and like the President's statement, we must fight it," he said.

Erick once again emphasized that the Indonesian government is not anti-foreign. However, it is important to ensure the target market for domestic economic growth.

"We are not anti-foreigners, but it is important for us to ensure that our market is our economic growth. Our natural resources are for our economic growth," he said.

Furthermore, Erick said the third challenge faced by the national logistics industry was the global shock after the pandemic which reduced demand for a number of industrial raw material commodities, industrial finished products, not imported and exported goods.

Furthermore, Erick said that commodity prices are currently getting higher and this needs to be anticipated so that Indonesia is ready to face the shock.

"And of course there is pressure on this, so there is a global shock, commodity prices are getting higher, this is what we need to anticipate. Don't let us be unprepared, we finally get the shock that happened today," he said.

Not only that, Erick said that the high cost of logistics in Indonesia compared to other countries is also a challenge for this industry to become a global player.

"Our logistics costs are still expensive, 23 percent of gross domestic product (GDP) is still high compared to other countries. Singapore can reach 8 percent, India 13 percent, and Malaysia 13 percent," he explained.

Therefore, Erick hopes that the merger or the merger of PT Pelabuhan Indonesia (Pelindo) can help reduce logistics costs. In addition, the merger can also provide other benefits, namely the development of an integrated service network, increasing port capacity and accelerating operational standardization, to increasing access and depth of port pools.

"Efficiency in logistics costs will have an impact on increasing the national economy, which we must be the center of the world. Moreover, we are now the president of the G20," he said.