Indonesia: Government Seeks to Cut Logistic Costs

TEMPO.CO, Jakarta – Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan, said that the government will strive to reduce logistic costs in Indonesia.

“The dwelling time has now improved, but costs remain high,” Luhut said at his office in Jakarta on Tuesday, April 18, 2017.L

Luhut revealed that the government is reviewing each component of logistic costs to be made efficient. For instance, Luhut explained, the terminal handling charge (THC) is considerably high.

“What is [THC] for? It’s quite expensive,” Luhut said.

According to Luhut, the THC accounts for 33 percent of the logistic cost in Surabaya and 28 percent in Makassar. Therefore, Luhut called for maximum efficiency.

Luhut added that he had called on companies, such as Deloitte, to help with the formulation of the cost efficiency. Luhut said that a meeting will be set up on Thursday to discuss the matter. Luhut hopes that the deliberation on the logistic cost cut would be more intensified in May.

“We’ll have a meeting on Thursday, April 20, 2017. We will provide breakdown of the numbers” Luhut said.

Transportation Ministry’s sea transportation director general Tonny Budiono echoed Luhut’s statement saying that the government would lower logistics costs by mapping the cost structure. Tonny revealed that the Transportation Ministry is currently looking at the logistic cost structure, since it involves a number of stakeholders.

“We will decide it by taking stakeholders’ opinion into account,” Tonny said.

Source: https://en.tempo.co/read/news/2017/04/18/056867200/Government-Seeks-to-Cut-Logistic-Costs