High Logistics Fees Become A Challenge For Expansion Expansion Expansion To Latin America And The Caribbean

Illustration of imported exports (Photo: Doc. Antara)

JAKARTA - The Indonesian Chamber of Commerce and Industry (Kadin) identified that plans to expand international trade to Latin America and the Caribbean have its own challenges.

Chairman of Kadin Shinta Kamdani said the area in the western hemisphere is quite unique and different in terms of business development.

"Most of the main challenges are at distance or distance. This will then affect logistics costs," he said during a media briefing with the Ministry of Foreign Affairs in Jakarta, Monday, September 18.

According to Shinta, logistics costs for shipping goods to the area are between 1,500 US dollars and 6,000 US dollars.

"We consider this to be a high cost if we count it," he said.

Shinta explained that a number of obstacles that must be overcome are about cultural differences with Indonesia. He revealed that national business actors must understand different procedures and procedures for commerce in each country.

It should also be remembered that the most important thing when entering a new market is what the competition there is like. We will see India, China, Vietnam, they have entered and must also be a consideration factor when entering there," he said.

On the same occasion, the Director General of America and Europe of the Ministry of Foreign Affairs (Kemenlu) Umar Hadi said Indonesia's trade balance with countries in Latin America and the Caribbean experienced a deficit.

He noted that in the 2022 period there was a deficit of 1.5 US dollars. He revealed that the trend had been going on for the last few years, such as in 2021 there was a deficit of 680 billion US dollars. Then, in 2020 the deficit is known to be worth 1.9 billion US dollars.

"It's okay, we have a trade deficit, because what we import are production materials or raw materials. Meanwhile, our exports are products produced such as manufacturing products. This means that there is added value produced in the country so that it helps the national economy continue to move," said Umar.