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ndonesia has shown need for a national logistics body to monitor and supervise the national logistics system involving the flow of goods by land, sea and air, officials said at a seminar on national logistics systems.

Deputy for trade and industry to the Coordinating Minister for the Economy, Eddy Putra Irawadi, spoke at the seminar at the Finance Ministry on Tuesday, saying, “Indonesia desperately needs an institution to monitor and supervise all issues and regulations related to logistics,”

He said that a recent study by the ministry cited the lack of such an institution as one of seven major logistical issues in Indonesia.

The other six issues were a lack of infrastructure integration, partial regulation and weak law enforcement, poor competence among workers, unreliable information and communication technology, weak competition among local logistics service providers and a lack of synergy between trade communities in focusing on primary export-import commodities.

An integrated, effective and efficient national logistic system is important because Indonesia is an archipelago, he said, adding that such a system would significantly reduce domestic prices of goods and services.

Eddy said container shipping from Singapore to Jakarta would cost US$185, less than one-third of the $600 price of shipping from Padang to Jakarta.

“Another example is that the price of shipping Mandarin oranges from China in Jakarta is less than shipping oranges from Medan, North Sumatra, due to the high shipping costs,” he added.

The Indonesian Chambers of Commerce and Industry (Kadin) vice chairman for trade, distribution and logistics, Natsir Mansyur, said that currently logistics costs contributed around 15 percent to the total price of certain products.

“We want logistics costs to be less than 10 percent,” Natsir said, adding that the ideal logistical cost would be around 5 percent.

He cited the high shipping cost — especially between factories and ports — as the main reason for the high logistics costs.

The government, therefore, should not put too much focus on the establishment of new industrial plants while neglecting the creation of a robust logistics system, he said.

“No matter how established the industry is, without an excellent logistics system in place, [companies] will still face problems the moment a product comes out of factories for transportation,” Natsir said, adding that he hoped the establishment of a national logistics committee would address such problems and give better solutions.

Deputy Trade Minister Mahendra Siregar said in a similar statement that it was time to establish a monitoring institution for the national logistics system.” (mim)