Indonesia to reform logistics system to attract more investors


  • Indonesia
  • Monday, 28 Sep 2020

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JAKARTA, Sept 28 (Xinhua): The Indonesian government has announced a reformed National Logistics Ecosystem (NLE) recently which was expected to ease the country's business community of logistics management.

Finance Minister Sri Mulyani Indrawati on Thursday announced that the government is developing the reformed NLE to simplify the upstream to downstream process to cut the logistics cost from 23.5 percent to 17 percent of the gross domestic product (GDP).

The cost could be saved among others from the delivery order process and the issuance of letters for containers, she noted, citing that these services were previously open from Monday to Friday at 9am to 3pm local time, and now they are open all day online.

The minister expected such a way of operation would save the logistics cost by 402 billion rupiahs (US$27.06 million) per year and cut the time by 91 percent.

Logistics companies said that the improvement in the national logistics ecosystem would accelerate cargo traffics as the government has made the business process in the new system easier.

"We are happy with the NLE as it helps us increase productivities," the Indonesian Trucking Association's General Chairman Gemilang Tarigan told a press conference in Jakarta.

The Indonesian Logistics and Forwarders Association's Yukki Nugrahawan Hanafi said the effort to shorten the long logistics business process would make a new history in the logistics ecosystem.

Hanafi said the NLE would support the development of the logistics industry in Indonesia.

"We, the business sector, will also give our full commitment to the government and support the NLE."

Other stake holders of the NLE include relevant ministries that have expressed readiness and support to the new logistics ecosystem which was expected to simplify the upstream to downstream process and cut the logistics cost.

"The ministry fully supports the NLE which was expected to remove obstacles, accelerate process and reduce logistics costs in the domestic and international trading activities," Trade Minister Agus Suparmanto said on Friday.

The Trade Ministry would simplify the licensing process related to the domestic and international services which would be integrated to the NLE to attract more investors, the minster said.

In addition, the ministry would also cooperate with provincial and district administrations to set up cargo terminals in an effort to increase the national export-import productivities, he said.

Meanwhile, the Transportation Ministry would integrate the systems of licensing from the export-import to logistics services in the aspect of transportation in a bid to improve the inter-regional connectivity and accessibility management.

Transportation Minister Budi Karya Sumadi called on logistics companies in a virtual press conference to actively take part in making the new NLE better with high competitive edge.

The logistics cost in Indonesia is higher than that of other economies in South-East Asia, according to the Finance Minister Sri Mulyani Indrawati.

With the reforms, the transporting and loading-unloading process which previously underwent duplications in seven institutions would now take place under a single submission system, and this would save about US$4.03 million per annum and cut the time by 74 per cent.

The logistics sector would then increase not only in efficiency but also its contribution to improving the competitive edge of the whole national economics, Finance Minister Sri Mulyani Indrawati told a virtual press conference. - Xinhua
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