Government Seeks to Slash Logistics Costs by Improving Infrastructure

One of the efforts that the government continues making to boost improvement in the performance of national logistics system is the integration of toll roads. Currently, the government is prioritizing the construction of Trans Java toll roads. The toll roads have connected Jakarta and Surabaya, and will continue to Banyuwangi by the end of 2019.

“Merak and Banyuwangi will be connected by the end of 2019.” President Joko “Jokowi” Widodo said (Detik.com, December 11, 2018).

Trans Java is expected to smoothen logistics flow, because 80% to 85% logistics transport in Java is carried out on land.

The next project is Trans Sumatra that will connect the whole island from Lampung to Aceh. Jokowi targeted to have Bakauheni connected to Palembang by April 2019. The rest will be built later all the way to Aceh.

Next, there will be big port projects that will be completed and ready to be inaugurated in early 2019. “There will be big ports that will be completed in early 2019, including Main Port Kuala Tanjung that we will inaugurate next month, and Makassar New Port,” Jokowi said.

Jakarta Outer Ring Road 2 (JORR 2) toll road is another prioritized project. The infrastructure is slated to be completed and start operations in 2019 and is expected to contribute to the economy around the capital.

The toll will be operated by PT Marga Trans Nusantara with investment of Rp2.4 trillion. Sixty percent of the shares are owned by PT Jasa Marga Tbk, while PT Astratel Nusantara owns 30% and PT Transutama Arya Sejahtera owns 10%.

Public Works and Public Housing (PUPR) Minister Basuki Hadimuljono said that JORR 2 will benefit commuters’ mobility, whether they’re from Jakarta or other cities around.

“God willing, in 2019, JORR 2 will be ready to be operated to improve the mobility of urbanites and increase economic activities,” the minister said (Liputan6.com, September 17, 2018).

According to Basuki, a segment of the JORR 2, the 11.4-km Kunciran-Serpong Toll Road, when the news was published, had been 66% completed. The segment will also be connected to Tangerang-Merak and Jakarta-Serpong toll roads that have started operations earlier.

Land acquisition for this toll road segment had reached 97% and was targeted to be fully paid in October 2018 using the fund from State Asset Management Agency (LMAN).

Jasa Marga President Director Desi Arryani said that in 2019, there will be several toll roads completed. One of the projects is Jakarta-Cikampek (Japek) Elevated toll road. “Pandaan-Malang and Japek Elevated must be completed, and so must JORR 2,” she said (Detik.com, December 31, 2018).

Other toll roads are Pandaan-Malang and Medan-Kualanamu-Tebing Tinggi; both predicted to be completed in the second semester this year. Meanwhile the Japek Elevated toll road will be finished in the third quarter and will be functionally operated first during the Eid al-Fitr season in 2019.

Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) Chair Wahyu Utomo said that the efforts to improve transport structure and infrastructure and to increase the quality of logistics service is only a part of the whole national logistics system. Wahyu added that special economic and industrial zones will also be built to slash logistics costs.

According to Wahyu, 72% of logictics costs are spent only for transportation, while the remaining 23% are for administration fees, storage, and warehousing. “So, transportation costs still make up a very big portion,” he said on KPPIP’s website (February 7, 2018).

Wahyu admitted that Indonesia still sits on the fourth position in terms of the amount of logistics cost, below Singapore, Malaysia, and Thailand. To improve this, the Indonesian government needs to complete the infrastructure projects that will support the national logistics system.

SELOG as a subsidiary of PT Serasi Autoraya (SERA) that operates in logistics service sector supports what the government has been doing. Even with the current infrastructure, SELOG is committed to give the best of many kinds of services to the people.

One of the services SELOG provides is contract logistics. The service fits the customers that want to focus on their core competence to increase business profit through logistics service that is integrated from the planning, implementation, to monitoring process.