Initial Milestone in Cutting Logistics Costs at Ports

Infrastructure improvements continue to leverage national and regional economic growth. Not only port infrastructure but airports in remote areas are also being built.

KOMPAS/PANDU WIYOGA

A container is unloaded from a transport ship at Batu Ampar Cargo Port, Batam City, Riau Islands, Wednesday (11/3/2020). The project to increase port capacity is estimated to cost up to Rp 1.5 trillion.

BATAM, KOMPAS — Efforts to cut logistics costs at ports by using an integrated digital system are officially implemented in the Batam Logistic Ecosystem (BLE). The system at Batu Ampar Port, Batam, Riau Islands, will be adopted in other ports. These efforts are targeted to be able to increase competitiveness, attract investment and promote economic growth.

Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan, at the inauguration of BLE in Batam, Thursday (18/3/2021), said logistics costs in Indonesia reached 23.5 percent of total gross domestic product (GDP). This value is much higher than the cost of logistics in other Southeast Asian countries, for example Malaysia, which is only 13 percent of total GDP. As a result, Indonesia is less attractive to investors.

The BLE is a pilot project of the national logistic ecosystem (NLE). The project is a digital collaboration that integrates the import-export licensing system managed by 15 ministries and agencies, while integrating logistics services from the upstream to downstream.

To attract investment, it is necessary to improve bureaucratic services and procedures, including the logistics ecosystem.

Apart from Batam Port, NLE will also be implemented in Belawan Port, Medan; Tanjung Priok, Jakarta; Patimban, Subang; Tanjung Emas, Semarang; Tanjung Perak, Surabaya; and Makassar. With the NLE system, the government is optimistic that logistics costs in Indonesia can fall to less than 15 percent of the total GDP in 2024.

Finance Minister Sri Mulyani Indrawati said Batam is a pilot project because of its strategic location in the Singapore Strait, one of the busiest trade routes in the world. However, since 2015, the economic growth of the Batam Free Trade Zone and Free Port has always been below the national economic growth. "To attract investment, it is necessary to improve bureaucratic services and procedures, including the logistics ecosystem," she said.

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NLE is designed to make transactions clean and transparent. All parties that may have an interest can monitor the process of completing transportation documents, customs and excise inspection and quarantine, licensing, completion of delivery documents, search for transportation means, up to the search for warehouses in one integrated digital platform.

"I hope all law enforcement officials can understand this whole ecosystem so that they do not confuse the legal and the illegal ones and cause the legal ones to become difficult, while the illegal ones cannot be handled," said Sri Mulyani.

The launch was also attended by the Coordinating Political, Legal and Security Affairs Minister Mahfud MD and Trade Minister Muhammad Lutfi. Their presence was a form of commitment to resolve crucial issues that have been considered to hinder Batam\'s economic growth, including the issue of rampant smuggling.

KOMPAS/TOTOK WIJAYANTO

Tugboats guide container ships leaving Tanjung Priok Port, Jakarta, after loading and unloading, Monday (15/3/2021).

Airport inauguration

Improving airport infrastructure in remote areas has not been ignored. Yesterday, President Joko Widodo inaugurated Toraja Airport in Tana Toraja regency, South Sulawesi, as well as Pantar Airport in Alor regency, East Nusa Tenggara.

Hopefully these two airports can be used to increase regional economic growth, create more jobs, and trigger and revive new economic growth centers.

The inauguration was carried out at the Toraja Airport Passenger Terminal. Also accompanying the President were Transportation Minister Budi Karya Sumadi, State Secretary Pratikno, and local officials.

The President hoped that the existence of Toraja Airport will improve connectivity within Sulawesi and with other regions. Thus, tourism in Toraja, which has been known as "the Land Above the Winds", will grow.

Also read: Connectivity the Lever of Economic Growth in Southeast Sulawesi

For Pantar Airport in Alor, the President hoped that its existence will complement and become an alternative to the sea route that has been widely used by the community.

"Hopefully these two airports can be used to increase regional economic growth, create more jobs, and trigger and revive new economic growth centers," said the President.

The construction of Toraja Airport cost Rp 839 billion. Meanwhile, Pantar Airport was built at a cost of Rp 103 billion.

This article was translated by Hyginus Hardoyo.