Henry Sandee, a senior trade specialist with the World Bank, which issued the index, said it was important for Indonesia to maintain the current index or achieve a better figure in the future.

Such an improvement was crucial because, although Indonesia’s LPI score was getting better, so were the scores of several neighboring countries, Henry said.

“It means that if Indonesia’s logistics policy within the next two years is not progressing, while the neighboring countries improve their policies, Indonesia’s next index could potentially decrease,” he said during a media roundtable on Wednesday.

Indonesia’s LPI this year is 3.15, better than its 2016 score of 2.98, according to the World Bank’s latest survey. The current index brings the country’s rank to 46th, an increase from 63rd in the 2016 World Bank LPI.

The index measures six indicators in logistics performance, namely infrastructure, international shipments, logistics quality, tracking and tracing, customs, and timeliness.

In assessing international shipments in 160 countries, 869 respondents were surveyed.

In the latest LPI, several neighboring countries posted a better score than Indonesia. Vietnam, for example, jumped to 3.27 from 2.98 in 2016, placing it above Indonesia at 39th. The Philippines ranked 60th with a score of 2.90, an improvement from 2016, when it ranked 71st with a score of 2.86.

World Bank Ports and Waterborne Transportation specialist Daniel Alexander van Tuijll said Indonesia should not to be too overjoyed with the current index, as the LPI was based on respondents’ perception, not the actual state of logistics performance.

“One of the challenges in Indonesia is that there are a lot of regulations being issued. Within a year, three different regulations could be issued. If you are dealing with an index based on perception and you change the regulation too many times, that could affect perception, and it is not good for business as well,” Daniel said.

A high number of changes in regulations have affected traders. According to the World Bank, there have been cases in which importers have dealt with regulations that changed from when they started the trading process to when they arrived to Tanjung Priok Port in Jakarta.

“I think the most important thing is certainty in regulation,” said Henry.

Aside from better regulations in logistics, the 2018 index indicates that Indonesia needs to develop its infrastructure, even with highway and port projects in the works.

Daniel said the government needed to improve connectivity to seaports like Tanjung Priok, which still relied on trucks. Meanwhile, for Patimban Port, Daniel said the government needed to ensure that Patimban Port offered facilities that were comparable to those at Tanjung Priok Port, an important port for international shipping.

“Patimban is a positive development. However, will cargo owners move to Patimban from Tanjung Priok?” he said, adding that it was difficult to replace Tanjung Priok because of its shipping lanes to countries in the United States and Europe.

Indonesia Logistics Association president Zaldy Ilham Masita said several deregulation moves, such as the introduction of the second generation of bonded logistic centers (PLB Second Generation) and the 15th economic policy package, played an important role in improving Indonesia’s index.

However, he urged the government to be more serious about reducing tariffs that were “still high at airports and seaports”.

“We hope that the government is more serious about reducing tariffs that burden logistics, whether official tariffs or illegal levies,” he said.

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