High logistics costs impede higher economic growth for Indonesia: World Bank; “The costs of logistics across Indonesia account for some 24 percent of GDP”
September 9, 2013 Leave a comment
High logistics costs impede higher economic growth for Indonesia: WB
The Jakarta Post, Jakarta | Business | Fri, September 06 2013, 2:43 PM
High logistics costs are a serious impediment to higher economic growth for Indonesia, says a report released on Friday by Bandung’s Institute of Technology in West Java, in partnership with the World Bank. “The costs of logistics across Indonesia account for some 24 percent of GDP (Gross Domestic Product), higher than in neighboring countries. Cutting costs and improving the quality of logistics and transport systems would vastly improve Indonesia’s access to international markets and increase trade,” a senior trade specialist at the World Bank, Henry Sandee, said in an official release.The annual logistics report was compiled by Bandung Institute of Technology’s Research Center for Logistics and Supply Chains, the Indonesian Logistics Association (ALI), the STC Group, Panteia Research Institute in the Netherlands and the World Bank Indonesia office. The report provides an analysis and overview of the progress made in tackling logistic problems in Indonesia.
One of the report’s case studies examines inefficiencies at Jakarta’s Tanjung Priok Port.
“The waiting time (dwindling time) for containers at Tanjung Priok has increased from 4.8 days in October 2010, to 8 days in 2013. This is creating more bottlenecks for Indonesia’s exports and imports,” Sandee said.
Other findings suggest that opening the 24 hours a day, 7 days a week, has not translated into faster processing of documents or of goods.
The report also said that using Cikarang Dry Port – an integrated facility that supports Tanjung Priok in handling import and export shipments, as well as domestic transactions — may reduce costs and time. Yet, due to infrastructural and institutional constraints, Cikarang Dry Port remained under-utilized.
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