TARAKAN - The high cost of domestic logistics in North Kalimantan Province (Kaltara) makes business actors choose the export route through Malaysia. The reason is that the distribution costs between regions in Indonesia are not competitive so they prefer to ship goods abroad at a cheaper cost.
Chairman of the Indonesian Business Association (Apindo) Kaltara Peter Setiawan revealed that the cost of shipping containers from Tarakan to Surabaya could reach Rp. 100 million. While direct shipments abroad only range from Rp. 40 million to Rp. 50 million.
"This is the main problem. Sending abroad is around Rp. 40 million to Rp. 50 million, but to Surabaya it can be up to Rp. 100 million," said Peter, Wednesday, May 6.
Peter revealed that the disparity in logistics costs made business actors take pragmatic steps by sending commodities through Tawau, Malaysia, before being forwarded to Kuala Lumpur and other export destination countries.
"If you count the business, of course entrepreneurs will choose the cheaper and more efficient path," he said.
Peter said that the distribution pattern through Malaysia has begun to be widely used in recent years, especially after the policy of prohibiting the export of crab seeds. This condition encourages entrepreneurs to open a new distribution chain through neighboring countries.
"As a result, a number of commodities from Kaltara are actually better known through the Malaysian market than from their own origin," said Peter.
"Our commodities are finally known from Tawau, even though the source of the product is from Kaltara," he continued.
He emphasized that this condition has an impact on the lack of optimal regional economic potential. In addition to reducing the opportunity for increasing the Regional Original Income (PAD), the lack of a strong direct export route is also considered to hinder investment.
According to Peter, the logistics problem in North Kalimantan is not only about high costs, but is also influenced by limited ship fleets, a lack of shipping routes, and unstable cargo volumes.
"If exports directly from Tarakan can run optimally, the distribution chain will be shorter and investors will certainly be more interested in entering," he said.
According to him, currently Kaltara's flagship commodities such as fisheries products, including shrimp and fish, are still marketed to a number of export destination countries, including Europe and the United States.
"Apindo encourages the government to strengthen logistics connectivity and the mobility of goods from border areas so that the competitiveness of local products increases. If this area wants to progress, the flow of goods and the mobility of people must run in balance," he concluded.
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