Indonesia aims to sharply cut logistics costs

Indonesia aims to further reduce logistics costs to 8% of gross domestic product (GDP) by 2045, from 14.29% in 2022, Coordinating Minister on Economic Affairs Airlangga Hartarto said on February 22.

To increase the efficiency of national logistics, Airlangga said the Indonesian government will implement regulations including the establishment of the National Logistics Ecosystem (NLE) to promote collaboration in information systems between government agencies and companies. Overall, the NLE had made good progress.

According to the minister, to enhance business efficiency, it is important to align national logistics management to achieve the target of reducing logistics costs by 2045 regarding the conditions and dynamics in both global and domestic markets.

This can be achieved by strengthening NLE and expanding the digitalisation of logistics activities outside the port, reducing costs through standardisation of logistics services, enhancing infrastructure and connectivity based on the restructure of the domestic transportation network, and developing logistics centres as a collection of leading regional products.

He said that Indonesia is improving the logistics system while the country is still considering joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to expand its market in Central and South America.

Previously, President Joko Widodo also mentioned the high logistics costs in Indonesia as a decade ago, its logistics costs accounted for 24% of GDP, compared to 9-12% in other countries. Indonesia's logistics costs have decreased to 14%, but still higher than those of other countries./.

VNA