Ranking 46 Out Of 160 Countries, The Indonesian Logistics Sector Needs Many Improvements

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA Researcher from the Institute for Development of Economics and Finance (Indef) Ahmad Heri Firdaus said the high cost of logistics is a separate burden, especially for the manufacturing industry.

According to him, this will affect the competitiveness of the industry in producing goods or services. Furthermore, it also has an impact on macro economic performance.

"If you look at the logistics components themselves, the biggest thing is transportation. So transportation costs are dominant in logistics structures," he said in a written statement on Monday, March 6.

Heri explained, one of the big challenges in the logistics sector is the unevenness of connectivity infrastructure. It is stated that infrastructure connectivity development by prioritizing logistics cost efficiency is very important.

"For example, if sending goods to eastern Indonesia is full of cargo. But when returning to western Indonesia (for example) to Jakarta, the content is not necessarily full. Why? Because in eastern Indonesia or in the destination area there may not be any production results needed by the community or by markets in the western Indonesia area," he said.

Therefore, he continued, this is a challenge so that costs become greater as a result of only delivering one-way goods.

"Based on Logistics Performance Index (LPI) data released by the World Bank as an indicator of logistical performance between countries, Indonesia is ranked 46 out of 160 countries in 2018. Indonesia's position is still far below Singapore, which is ranked 7th and Thailand is ranked 41", he said.

For information, in the first quarter of 2021, Indonesia's logistics costs reached 23.5 percent of gross domestic product (GDP). This figure is relatively high compared to logistics costs in ASEAN regional countries, such as Malaysia which only reached 13 percent of GDP.