behind the border logistics challenges and measures in indonesia. 3.2... · 2017-09-18 · 13...
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Behind the Border Logistics Challenges
and Measures in Indonesia.
HENRY SANDEE, WORLD BANK INDONESIA OFFICE
Trade & Competitiveness Global Practice
September 2017
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Logistics behind the border challenges impact on competitiveness
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Cambodia Indonesia Vietnam Malaysia Thailand China Singapore Philippines Myanmar Lao PDR India
Changes in Ranking LPI 2014-2016 for Indonesia and ASEAN + China
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Logistics in an Archipelago. A Framework
Intra-island logistics Inter-island logistics International logistics
Uncertainty in delivery due to either congestion or absence of quality roads
Unreliability of domesticshipping due to poor performance of ports
High costs and uncertainty to export according to schedule
Minimal presence of railway services
Serious backhaul problem with ships returning to Java filled for 30 percent only
The time it takes to import a container is uncertain.
Absence of short-sea shipping
Standard supply chains from Java to Eastern Indonesia complex
Import dwelling time ismuch lower but has it reduced logistics costs we do not know
Backhaul issues in road transport
Broadband to Eastern Indonesia significantly delayed
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Concentration of economic development in Indonesia
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Transport costs only explains 17% of the logistic costs in Indonesia
Source: WB & LPEM-FEUI survey in 5 cities in Indonesia
• Logistics cost/sales is more precisethan logistics cost/GDP . This conceptmeasures at the micro level
• Countries that use logistics cost/sales include Japan, Finland and Germany
• Survey of 205 firms in Jakarta, Bekasi, Semarang, Surabaya, Medan, and suggests that logistics cost/sales of Indonesian manufactures is around 19-20%, which is higher than in Thailandand Malaysia (15% and 13%)
• Survey suggests that inventory carryingcost contributes to 26% of logistics costincurred by Indonesian manufacturers
Components of Logistics Cost/Sales (%) Total LogisticsCost/Sales = 20%
Logistics
Admin Transport &
3.4% Cargo Handling
8%
Warehouse3.3%
5.2%
Inventory
N = 75
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Some facts about the state of logistics in Indonesia
Intra-Island Logistics
• Indonesia’s logistics cost account for 20% of manufacturing sales in West Java versus 14% in Thailand
• Inventory costs=26% of logistics costs in Indonesia versus 16% in Thailand and 13% in Malaysia
• Trucks traveling between West Java and the port of Jakarta can now only do one round trip per day. Five years ago they could do two road trips
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Inter-Island Logistics
• Transport costs from Java to other islands are high because of inefficient ports but sea freight costs are competitive
Tanjung Priok – Guangzhou, ChinaShipping Costs US$400
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Some facts about the state of logistics in Indonesia
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To Eastern Indonesia: Ships Have A Long Turnaround Time
Port of destination
Waiting timeTime at berth
(effective)Time at berth
(idle)Turnaround
time
Container Handling Charges
Sorong 24 hours 16-21 hours 10 hours 50-89 hours IDR2,168,290
Jayapura 24 to 72 hours 48 hours 60 hours 72 to 96 hours IDR1,840,094
The time spent at some ports is sometimes as much as half of the sailing time (ex. Belawan-Jakarta, Surabaya-Makassar)
To reduce logistics costs one needs to tackle costs incurred in ports rather than sea freight costs
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0.0
5.0
10.0
15.0
Trucking Charges
Sidoardjo-PortPort Charges
(Surabaya)
Sea Freight
(Surabaya-
Ambon)
Waiting time @
Port (Value of
time)
Port charges
(Ambon)Port to Hinderland
(Ambon)
Million Rupiah
Source: WB Survey of shipping liner 2014, Ministry of Trade survey 2014
Example: Logistics cost scenario for 1 TEU of rice from Surabayato Ambon
The cost of having rice waiting
at ports (value of time) can be
significantly high in the overall
logistics cost
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20.0
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International Logistics: Dwell Time in the Port of Jakarta
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6.24
7.59
3.14
3.89
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DW
ELL
TIM
E (D
AYS
)
MONTHS
Import Dwell Time in Tanjung Priok Port
DT
Avrg. 2013: 6.5 daysAvrg. 2014: 4.9 daysAvrg. 2015: 4.2 daysAvrg. 2016: 3.4 daysAvrg. 2017 (up to April): 3.5 days
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Can we tackle behind the Border Logistics?
In an archipelago Improve intra-island and inter-island logistics
A key issue is the same as in most emerging economies: How to find breakthroughs in infrastructure financing
• Select priorities
• Promote greater participation of the private sector (PPP)
• Promote higher investments by sub-national governments
• Land acquisition……
• But do not underestimate the importance of regulatory reform
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NO. DOCUMENT QUANTITY UNITS
1 PENGISIAN FORM 37
2 SURAT PERMOHONAN 24
3 KTP 47 copies
4 AKTE PENDIRIAN 45 set
5 SK MENKUMHAM 44 copies
6 DOMISILI 43 copies
7 NPWP 42 copies
8 FOTO DIREKTUR 13 pcs
9 SIUP 42 copies
10 TDP 41 copies
11 KADIN 41 copies
12 LAYOUT LOKASI/SITUASI 24 copies
13 SURVEY LOKASI 24 times
14 INFORMASI PERUNTUKAN LAHAN 0 copies
15 ADVICE PLANNING 21 set
16 PERTIMBANGAN TEKNIS BPN 18 set
17 PEMBEBASAN LAHAN 4 set
18 IJIN LOKASI/P2R 19 set
19 SOSIALISASI WARGA 11 set
20 PENSERTIPIKAT/PENGGABUNGAN 9 set
21 AKTE KEPEMILIKAN 18 set
22 PERTEK KKOP 0
23 KKOP 0
24 PEIL BANJIR 14 set
25 GARIS SEMPADAN SALURAN 13 set
26PEMAKAI KEKAYAAN DAERAH (JEMBATAN/AKSES JALAN) 12 set
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Regulatory requirements for
investment
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NO. DOCUMENT QUANTITY UNITS
27 GAMBAR DRAINASE 4 set
28 REKOMENDASI KAJIAN DRAINASE 12 set
29 BERITA ACARA SOSIALISASI/KONSULTASI PUBLIK AMDAL 9 set
30 BERITA ACARA KERANGKA ACUAN ANDAL 3 set
31 BERITA ACARA ANDAL & RKL-RPL 3 set
32 REKOMENDASI DAMPAK ANALISIS LINGKUNGAN 14 set
33 TAMPAK BANGUNAN 3 set
34 POTONGAN BANGUNAN 3 set
35 GAMBAR DETAIL BANGUNAN 4 set
36 GAMBAR RENCANA SANITASI DAN LISTRIK/MEP 4 set
37 PERHITUNGAN KONSTRUKSI 3
38 KLARIFIKASI KONSTRUKSI BANGUNAN DARI PU 1
39 GAMBAR SITE LOKASI MESIN 1 set
40 GAMBAR ANDALALIN 4 set
41 BERITA ACARA RAPAT ANALISIS DAMPAK LALU LINTAS 4 set
42PERSETUJUAN REKOMENDASI ANALISIS DAMPAK LALU LINTAS 12 set
43 BERITA ACARA RAPAT PEMBAHASAN SITEPLAN 3 set
44 PERSETUJUAN RENCANA TAPAK (SITEPLAN)/SK 11 set
45 PERUBAHAN STATUS TANAH SAWAH 5 set
46 IJIN MENDIRIKAN BANGUNAN 8 set
47 IJIN GANGGUAN (HO) 7 set
48 TDI/TDP/TDUP 5 set
49 IJIN I PAL 1 set
50PUNGUTAN RETRIBUSI/PMBP/PAJAK PUSAT DAN DAERAH 8 set
51 IJIN PRODUKSI 3 set
52 IJIN SNI 2 set
53 IJIN EDAR 1 set15
(Cont’d)
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However, this does not mean that nothing can be done in the short-run…
Regulatory reform is another key priority that currently receives World Bank support
• Simplification of licensing
• Embedment of logistics policies in the working programs of line ministries
• Mainstream regulatory impact analysis
• Recent economic packages issued to improve logistics include many measures that await implementation by line ministries
• WB estimates are that logistics costs (as a percentage of sales) can be reduced by 20 percent by carrying out key logistics reforms.
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How can we tackle behind the Border Logistics?