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Transportation Minister: 15 months of pandemic, logistics sector is relatively stable

This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Investor Daily - Menhub: Pandemi Sudah 15 Bulan, Sektor Logistik Relatif Stabil

08 June 2021

By: Thresa Sandra Desfika

 

Jakarta — Transportation Minister Budi Karya Sumadi revealed that the national logistics sector was relatively stable when the passenger transportation sector was hit by the pandemic that had been ongoing for 15 months. The logistics sector is currently supported by sufficient transportation network and continuous infrastructure construction.

The Transportation Minister explained that the Covid-19 pandemic did not only impact the public health sector but also hindered other activities, including the economy, especially the transportation sector. On the other hand, the logistics sector that is currently limited by various policies to prevent Covid-19 from spreading can still be active as online shopping increases during the pandemic.

“The logistics sector is relatively stable amid the pandemic. This sector is obviously supported by sufficient transportation network and continues infrastructure construction that supports logistics mobility in various regions,” Budi Karya said during a webinar titled Transportasi untuk Kelancaran Logistik dan Kemajuan Ekonomi di Masa Ekonomi (Transportation to Facilitate Logistics and Economic Advancement) held on Monday (7/6).

Furthermore, the Transportation Minister explained that his agency was making sure that logistics transportation would continue to maintain the sustainability of energy, food, and activities in other sectors so that the economy could recover and achieve better condition.

The Transportation Minister said that, in line with President Joko Widodo’s direction in facing the pandemic, the government must prevent the spread of Covid-19. However, on the other hand, the government must also recover the economy by issuing various regulations to accelerate the national economic recovery in various sectors.

“The Transportation Ministry is supporting the policy by implementing various programs, including subsidy for passenger and logistics transportations as well as transportation infrastructure construction to improve connectivity in various parts of Indonesia to facilitate passenger and logistics movements,” the Transportation Minister said.

The Transportation Minister revealed that, amid the pandemic, activities of the logistics sector were relatively stable and online shopping activities were increasing. This must be supported by sufficient transportation network in order to run better.

“Hence, the Transportation Ministry will continuously carry out infrastructure construction amid the pandemic so that the supply of logistics distribution to serve the citizens can be done more effectively and efficiently,” the Transportation Minister.

The Transportation Minister is also asking stakeholders in the transportation sector to remain consistent in realising connectivity using transportation nodes to support logistics in Indonesia. With consistency in building connectivity and support from excellent health protocols, the government is optimistic about the national economy recovering soon.

Integration

On the other hand, Transportation Minister Special Staff for Communication and Human Resources, Adita Irawati, explained that Indonesia as an archipelago needed excellent connectivity to smooth out passenger movement and logistics distribution to all areas in Indonesia, including remote, outermost, underdeveloped, and border (3TP) areas. Hence, collaboration and integration cannot be limited to physical infrastructure, but the technology must be integrated by digitalising licensing and other service systems.

According to her, there are two strategies that are implemented by the Transportation Ministry to support logistics distribution, which are lowering logistics cost by cutting the supply chain that can burden logistics cost through business process performance improvement and creation of an integrated national logistics ecosystem. Then, the second strategy is to develop a more integrated transportation system that is more integrated to other transportation modes. For example, the maritime highway and the sky bridge must be integrated so that logistics distribution can reach the remote areas of Papua.

Meanwhile, Indonesian Logistics Association (ALI) Expert Council Chairman, Nofrisel, said that transportation was the largest factor to lower logistics cost in Indonesia that nearly reached 40% of the total cost compared to other factors, such as warehousing, exports and imports, packing, and other factors.

“Hence, with transportation infrastructure construction, port development, and other activities connected to the industry, we can directly benefit as it will be easier to secure goods and services,” Nofrisel explained.

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