Unreliable Transportation Causes Rice Price Surge; Competent Logistic Service is Needed

As the primary food ofIndonesians rice has been constantly on demand. Any problems related to rice supply, including logistics problems, would demand the government’s attention as it would cause the price to rise.

In the beginning of 2017, problem arose after rice supply to Cipinang Central Market decreased because of the increasing logistics costs. It is then cause surge in rice price.

As quoted in Kompasarticle (February 24, 2017) titled ‘Logistics costs in Central Java spike’, Hamid Aminudin owner of Dagang Putra Harapan, Brangsong, Kendal regency said logistics costs had increased due to damaged roads in Central Java’s Northern Coastal Highway.

The increase in logistics costs forced Hamid to reduce rice supply to Cipinang Central Market in Jakarta.

”Supplycould be reduced by up to 50% due to the risks posed by the damaged roads. And if the truck broke down on the way to central market, it could take a night to fix it, thereby increasing the risks of damage to the rice,” Hamid said.

Meanwhile, in the article published on Thursday (23/2/2017), the chairman of Indonesian Truck Operators Association (Aptrindo) in Central Java Region, Chandra Budiwan, said that the damaged roads in Semarang had increased the costs of spare part change up to 30%. He added that the components often needed to be replaced were suspensions and tires.

”Damaged roads have not only accelerated breakage of truck components, but also lengthened delivery time,” Chandra said.

Old Vehicle

It is undeniable that most logistics vehicles in Indonesia are old. Thus, they are all prone to break down anytime soon.

The Jakarta administration has limited the age of trucks and buses up to 10 years through bylaw No. 5/2014 on transportation. However,Aptrindodemanded the extension of truck usage age to 20 years.

"Truck does not necessarily have to be replaced after 10 years of usage,"said GemilangTarigan, AptrindoCentral Board of Management Chairman atKontan.com, in an article titled ‘Truck owners urge revision on truck usage age’ published in Thursday (March 3, 2016).

Dilemma arises of earning more profits by using old, not-roadworthy trucks or spending money to buy new trucks.

Another option is eliminating vehicle procurement and service costs by renting professional service such as SELOG,SerasiAutoraya (SERA)’s subsidiary which provides safe, secure, and on-time delivery logistics service.