ALI Suggested 8 Ways to Lower Logistic Cost

ALI Suggested 8 Ways to Lower Logistic Cost

JAKARTA – Indonesia Logistic Association (ALI) suggested 8 ways to lower logistic cost in 2015. The efforts are short-term programs which can be conducted by the government quickly to lower logistic cost and to support maritime axis as the government’s big agenda.

“We also thank the government for its attention and efforts in 2014 which are better than in the previous years,” said ALI Chairman, Zaldi Masita, in his written notification last weekend.

The first effort is to convert terminal handling cost (THC) tariff for export-import from US dollar to rupiah. The tariff in rupiah will stabilize port cost for service users especially exporter and importers and will lower rupiah fluctuation to US dollar.

Second is to revoke port cost for empty container re-position from eastern Indonesia. Port cost revoke will lower domestic delivery cost through sea for 25% to eastern Indonesia. Third is strict law enforcement for the overloaded land transportation vehicles in Indonesia, especially in Java’s northern coast to save fuel and truck maintenance costs and to give an opportunity for commodity delivery conversion from trucks to trains or vessels.

Fourth is to prevent commodity train tariff hike in 2015 to improve logistic volume conversion from truck to rain. Adding freight capacity will lower commodity train’s operational cost.

Fifth is to activate Bitung Port as the only gate for importing luxurious or consumptive commodities to Indonesia to balance the volume from eastern to western Indonesia so domestic shipping cost to eastern Indonesia can be lowered. Sixth is to review Kalibaru or New Priok Port capacity addition since the existence of port in Jakarta is no more appropriate since 80% of port service users are located outside Jakarta so Tanjung Priok capacity addition will worsen traffic gridlock in Jakarta. Infrastructure development will be focused on Jakarta to reduce traffic gridlock caused by Tanjung Priok Port as Indonesia’s port center.

“It has risk management since 70% of export and import is conducted through Tanjung Priok Port. Logistic cost, especially which for transportation to Tanjung Priok Port is really high since it is far from industrial hub and has horrible traffic gridlock,” he explained.

Seventh is revamping Presidential Regulation (Perpres) No. 36/2012 about New Priok Development related to Cilamaya Port by letting private party and West Java government to develop Cilamaya Port as an export port especially for automotive and to lower logistic cost since transportation cost to Cilamaya is lower than to Tanjung Priok.

Eighth is to let private party to manage general ports currently managed by Transportation Ministry. It has to be conducted to accelerate port development in Indonesia and to raise competition among port operators so it will lower port cost currently monopolized by Pelindo so it is not efficient.

“With these eight logistic efforts, we expect to lower logistic cost in 2015 and to give strong foundation for maritime axis development,” said ALI Deputy Chairman, Mahendra Rianto. (Investor Daily)