Government reforms logistics service to support local businesses

The national logistics costs accounted for 24.6% of Indonesia’s gross domestic product in 2014. Meanwhile, logistics costs made up to 40% of the retail pric
The national
logistics costs accounted for 24.6% of Indonesia’s gross
domestic product in 2014. Meanwhile, logistics costs made up to 40% of the
retail price of goods in Indonesia, a setback to domestic businesses.
Considering the facts
above, which were published in Kompas on Thursday (April 27, 2017) in an
article titled “Dwell time in port set at 2 days”, the government has recently
issued an economic policy package focusing on the development of national
logistics business.
The 15th Economic
Policy Package was announced by Cabinet Secretary PramonoAnungWibowo,along with
Economic Coordinating Minister DarminNasution, and Transportation Minister Budi
KaryaSumadi, at the President’s Office, Presidential Palace Complex, Jakarta,
on Thursday (June 15, 2017), as cited from Kompas.com in “Logistics system
improvement becomes first step in reform to reduce costs”article.
“Improvement has been
done, but the government feels that it is not enough as there are still other
sectors that can be improved,” Pramono said at that time.
To implement the
economic policy package, the government simplifies and revises several
regulations.
The simplification
includes merging three presidential regulations (Perpres) into one presidential
regulation on Indonesia National Single Window.
Through this package,
Darmin added, the logistics industries are expected to switch from using
foreign logistics services to domestic ones.
Domestic vs Foreign LogisticsBusiness
Indonesia itself now has the Indonesia National Single
Window Portal Management (PP INSW), whose task is managing customs, permits,
and other documents related to export-import and logistics activities through
electronic means, reflecting a one-door policy.
INSW itself has
already been discussed in the previous policy package, namely Policy Package
XI.Aside from INSW, another important key to the logistic process’ efficiency
in Indonesia is dwell time, or the time that is spent to unload goods from the
port.
“By the end of this
year, we are assignedto reduceit (dwell time) to two days. We are positive that
this target will be achieved. The key lies in the Policy Package XI on
single-risk management and the INSW, which will rationalize export-import
policy,” Economic Coordinating Ministry’s Deputy for Trade and Industrial
Coordination,Edy Putra Irawady said as cited from Kompas (April 27, 2017).
Regarding the dwell
time, the latest average dwell time in Indonesia was 2.9 days, lower than
Malaysia’s (2 days) and Singapore (0.5 days to 1.5 days). This issue affects
the national logistics cost.
According to Edy, one
of the factors that prolong process at port is the export-import administrative
works. Therefore, through a single-risk management method, the risk of
export-import pertaining to15 agencies will no longer be the responsibility of
the port. Furthermore, PP INSW will also
rationalize 134 regulations related to export-import process.
“For instance, permit
processing will take shorter time because the process is done electronically,”Edy
said.
This logistics
service reform is hoped to encourage business owners to use domestic logistics
services, since the government support has made them competitive to foreign
logistic services.
Furthermore, there
are several Indonesian experienced logistics services such as SELOG from
Serasi Autoraya (SERA), whichoffers guaranteesonsafety,
punctuality, and zero defect.
As part of Astra Group, SELOG has long been
providing logistics service through various transportation modes in Indonesia,
for heavy tools or other cargo. For international shipping, SERA collaborates
with Jardine Shipping Service (JSS), the largest shipping agent in Asia.
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