Suharso Monoarfa, the Minister of National Development Planning (PPN) and Head of the National Development Planning Agency (Bappenas), has revealed that the cost of shipping goods between regions in Indonesia is now significantly higher than the cost of exporting goods abroad. He made this statement during the "New Era of Logistics Costs for Indonesia Emas 2045" event held in Jakarta on September 14, 2023.

Suharso explained that based on research conducted by Bappenas, domestic logistics costs in 2022 accounted for 14.1% of the total Gross Domestic Product (GDP). On the other hand, the logistics cost for shipping goods abroad was only around 8.9%.

Furthermore, Suharso elaborated that the largest component of logistics costs in Indonesia is transportation and cargo handling costs, making up 45.3% of the total expenses. Additionally, warehousing costs and inventory carrying costs were 22.5% and 14.6%, respectively. Another component includes logistics administration costs, comprising approximately 17.6% of the total logistics expenses.

Suharso stated that the national logistics cost is one of the significant challenges in Indonesia's efforts to achieve national and global economic integration in line with the vision of Indonesia Emas 2045. Some factors contributing to the high national logistics cost include the lack of economies of scale, leading to the use of small vessels and low cargo loads. Additionally, domestic port infrastructure has not been able to accommodate large vessels.

Furthermore, the suboptimal formation of consolidation routes and the uneven distribution of facilities at ports are additional challenges faced by Indonesia in reducing logistics costs.

The government has set a target to reduce national logistics costs to approximately 9% by 2045. Suharso revealed that steps toward achieving this goal involve enhancing digital technology, improving human resource quality, enhancing ecosystem efficiency, and reforming logistics institutions.

Moreover, the government plans to strengthen intra and inter-regional connectivity, increase Indonesia's participation in global supply chains, and enhance economic ties among growth centers. Efforts will also be made to boost the export of high-value-added goods and services in the global market, along with improvements in land, sea, and air connectivity infrastructure.

The government is committed to creating new growth centers and enhancing the appeal of existing growth centers in the future.

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