Indonesian businesses have higher logistics costs than other Asian countries due to longer delivery times and unpredictable schedules. This causes economic hardship. To address this, Indonesia should develop an integrated logistics network including deep sea ports, rail connections to dry ports near industrial zones, and paperless customs clearance. This would reduce costs, congestion, and smuggling while making trade and transportation more reliable and efficient.

1. PT. Bulk resource Optimizers
June 24, 2014
www.broindo.com

2.  Indonesian businesses are saddled with
higher logistics costs than their counterparts
in other Asian nations
 Aside from higher costs, Indonesian
businesses have to endure longer delivery
times as well as less than predictable delivery
schedules
 Indonesian cargo movement causes its
citizens great hardship and cost

5. Deep Sea
Port
Container
Dry Port
Industrial
Zone
Industrial
Zone
Container
Dry Port
Distribution
Hub

6. Deep Sea
Port
Bulk
Terminal
Cargo
Railway
Road
Transport
Feeder
Vessels
Secondary
Sea Port

7.  Cargo volume & type
 Frequency of connections
 Is de-consolidation required?
 Distance to destination
 Is cargo perishable or heat sensitive?
 Raw materials or semis for processing or
manufacturing
 Finished products ready for distribution
 Population density

8.  Cargo which needs to travel more than 15 km
from the deep sea port should go by rail
rather than by road whenever possible
 Cargo from the container dry port can then
go by road to destination
 Cargo deconsolidation centers as well as
special bonded zones can be set up within the
container dry port

9.  Deep Sea Ports for high volume cargo
whether bulk or break-bulk
 Bulk terminals within the immediate area of
Deep Sea Ports
 Railway connection from Deep Sea Ports to
Dry Container Ports
 Industrial Zones set up near Dry Container
Ports for processing, tolling, manufacturing
and packaging

10.  Indonesia should adopt paperless process for
Customs clearance to save paper and fuel
(this is a Green initiative)
 National SingleWindow must be nationwide
 Customs website must link to related bodies
such as MIGAS, BPPOM andTrade Ministry
with shared databases
 Customs inspection should be available at
Deep Sea Ports as well as Container Dry Ports

11.  Reduced time in clearing import & export
cargo
 Reduced storage costs & congestion at ports
of entry/exit
 Elimination of smuggling & leakage of import
duties as well as other taxes
 More reliable trade data for Indonesia which
can be used by Indonesian embassies
overseas

12.  No more cash trading hands at the ports &
Customs – all payments should be electronic
andTRACEABLE
 All costs and expenses incurred to be
receipted thus conforming with international
standards of good corporate governance
 Customs & the Indonesian government
should be the solution, not the impediment

13.  Tanjung Priok is the 22nd busiest port in the
world with 6.1 millionTEUS in 2012 just
ahead of Long Beach, California
 Cargo imports into Indonesia in 2013 totaled
141 million tons
 Cargo exports from Indonesia in 2013 totaled
700 million tons
 Majority of Indonesia’s exports are in the
form of bulk cargo

14.  Indonesia’s trade volume is very likely to
increase particularly in the form of imports
via container
 Deep sea ports need to have vast surrounding
land bank to allow for future growth &
development
 Cargo terminals, bulk terminals & bulk liquid
storage should be located beside deep sea
ports

17.  For heavy industrial manufacturing & power
generation, it makes sense to be located near
deep sea ports so that inbound raw material
can be efficiently delivered
 Coal & fuel should not have to be transported
long distances to point of use – it should be
electricity generated that is transported, not
the raw material

18. The Jabodetabek area should be served by 2
deep sea ports one in the Banten Regency to
handle everything up toWest Jakarta and
another in the Bekasi area which can serve
even Bandung
This will enable the industrial zones in both the
East andWest to reduce their logistics costs
as well as ease the Jakarta traffic problems

20.  The development of industrial zones should
be undertaken by the government to move
industrial activity away from the densely-
populated commercial center of Jakarta
 The government should incentivize industries
to re-locate to designated industrial zones
 Infrastructure such as utilities, electricity,
road & railway links should be included

21.  For Indonesia to become competitive
globally, it needs efficient infrastructure
 Infrastructure alone will not make Indonesia
competitive and efficient, all processes must
be streamlined so that they actually facilitate
instead of frustrate
ThankYou!