Pelindo, the Indonesian state-owned port operator, has addressed concerns about Indonesia having some of the highest logistic costs in ASEAN, emphasizing the unique challenges of an archipelago compared to neighboring countries like Singapore and Malaysia.
At a recent event in Jakarta, Mona Yudika, Pelindo’s Group Head of Corporate Transformation & Program Management, discussed the high logistics costs associated with operating in an archipelago like Indonesia, contrasting it with the streamlined operations in neighboring countries such as Singapore and Malaysia.
Yudika explained that unlike Singapore’s transshipment hub, Indonesian ports serve as gateways, handling goods originating from domestic industries, which complicates direct cost comparisons. This structural difference inherently affects logistic expenses.
Logistic costs in Indonesia currently stand at 14.29%, with ports accounting for 1-2% of these costs. Pelindo has been focusing on reducing the ‘port stay’ times to enhance efficiency and lower costs.
Post-merger, Pelindo has prioritized integrating ports with industrial zones to streamline operations. Initiatives like the Java Integrated Industrial and Port Estate (JIIPE) in Gresik are examples of infrastructure aimed at boosting logistical efficiency.
Additionally, the development of infrastructure such as the Cilincing toll road connecting Tanjung Priok port with industrial areas in East Jakarta is part of broader efforts to improve logistical connections and reduce transportation overheads.
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Yudika underscored the importance of understanding the diverse factors influencing logistic costs and mentioned ongoing initiatives like operational standardization and digitalization aimed at enhancing the speed and efficiency of cargo handling at Indonesian ports.
Pelindo’s response to the high logistic costs in Indonesia highlights a complex interplay of geographical and operational challenges unique to the country. Their ongoing efforts to streamline operations and integrate services are crucial steps toward reducing these costs and enhancing economic competitiveness.
In response to concerns about high logistic costs, Pelindo elucidates the unique challenges faced by Indonesia as an archipelago. By comparing operations with those of Singapore and Malaysia, Pelindo sheds light on the systemic differences and outlines initiatives aimed at reducing costs and improving efficiency across its ports.
Sources: CNBC Indonesia, IDX Channel (2024)
