Building Competitiveness: Infrastructure Development to Efficient Logistics
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1 2013/SOM2/SOM-ABAC-PECC/DIA/004 Building Competitiveness: Infrastructure Development to Efficient Logistics Submitted by: Indonesian Forwarders and Logistics Providers Association Dialogue on Services Surabaya, Indonesia 17 April 2013
2 Building Competitiveness : Infrastructure Development to Efficient Logistics Surabaya, 17 April 2013 Iskandar Zulkarnain 1 INFRASTRUCTURE FOR COMPETITIVENESS Infrastructure development Efficient logistics Reducing cost Increasing domestic connectivity Increasing competitiveness 2 1
3 Logistics Blue Print Sistem Logistik Nasional (SISLOGNAS) MP3EI Strong Domestic Market SISLOGNAS Increasing Buying Power & High Consumption Economic Growth 3 RECALLING WHOLE LOGISTICS SYSTEM locally integrated and globally connected LOGISTICS NODES (consumers, business, and logistics providers) hold a major role in the system. LOGISTICS NODES LOGISTICS LINK COMPETITIVENESS LOGISTICS LINK establishes a good connectivity, includes infrastructure and network for transportation, distribution, information and finance. 4 2
4 6 Economic Corridors Source : MP3EI 5 ASEAN Performance Indonesia s LPI on 2012 was ranked 59 out of 155 world countries Collaboration of Academician, Business Sector & Government Singapore Malaysia Thailand Philippines Vietnam Indonesia Cambodia Lao PDR Myanmar Source: Logistics Performance Index, Worldbank 6 3
5 Transport & Logistics Market Size 1,600 1,400 1,200 1, , , , ,427 1, ( e ) Hidden Logistics Cost Transport, Storage and Courier Transport & Logistics Market Size Source : F&S, Transport & Logistics Market
6 Trade Activity in Indonesia 22% 9% 5% 3% 61% Source : Worldbank, Hill et.al analysis by ALFI 9 KEY DRIVERS Logistics will always follow the trade : HUMAN RESOURCE 10 5
7 HUMAN RESOURCE Transportation & Trade Infrastructure As the foundation of efficient and effective logistics Big gap trade off between reducing freight cost and achieving the quality in transportation service, including speed in delivery Building and expanding infrastructure for the growing market Soekarno Hatta Airport Expansion 11 Short Term Big Wins on SISLOGNAS Developing Short Sea shipping to integrate the archipelago Enhancing more on Roll On Roll Off vessel for efficient cargo delivery, thus increasing its RORO Port Revitalizing cargo fleet for better performance 12 6
8 HUMAN RESOURCE Human Resources Improvement Develop and upgrade skills and capacity of logistics providers through: joint trainings and workshops with national skills certification system development of common core curriculum for logistics management which has determined international standards 13 HUMAN RESOURCE Information and Communication (ICT) Facilitation Promote relevant technologies for advanced information systems among governmental agencies, shippers, and industry through: Encourage e logistics Challenges: 1. Fast and good coordination 2. Investment for ICT 14 7
9 HUMAN RESOURCE Users & Service Providers Providing qualified transportation service Developing common platform for compatibility 15 HUMAN RESOURCE Regulation Facilitation Ensure legal certainty and law enforcement in conducting Logistics activities. 16 8
10 HUMAN RESOURCE Commodities Driven Follows on main commodities of particular area Providing facilities that promotes certain commodities Local Fruit Case Study 17 HOW TO DEAL Fiscal space Diversification of financing Policy harmonization National Logistics Council Human resources development 18 9
11 HOW TO DEAL? Fiscal space Infrastructure investment needs sufficient support from national budget. The government needs to allocate the budget at the right place. For example: shifting the fuel subsidy to infrastructure development financing, skimping personnel expenditure, and budget allocating to priority sectors. Diversification of financing There are 3 ways to finance the infrastructure: from APBN/APBD, partnership between government and private (PPP), and independent private. Considering the lack of fund we need for infrastructure, the government should engage the private sector for optimization of infrastructure financing.we should encourage national business to take over the opportunities. For example infrastructure development in industrial area is worthy to be run by private. Government and business association should endorse national logistics providers to be world class local players. Harmonization central regional policy As the goal of SISLOGNAS to make this nation as an integrated supply chain area, there should be a harmonized policy between related ministries, central regional, and among regional governments. The development plan should be integrated throughout the regions. 19 National Logistics Council To make sure logistics comprehensively integrated, we should support the idea to create National Logistics Council which will be responsible to regulate and maintain the development of infrastructure and network on those aspects. National Logistics Council may consist of key officials in government and businessassociation or chambers. Not only physical development A whole logistics system is not only emphasizing physical infrastructure, but also the development of logistics stakeholder, includes logistics performers, logistics service suppliers, and human resources management
12 ALFI Asosiasi Logistik & Forwarder Indonesia ILFA Indonesian Logistics & Forwarders Association Thank You 21 11
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