TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Ramadhan brings big spikes in logistics costs

Logistics firms have raised freight delivery costs up to 20 percent amid a surge in freight volume during the Ramadhan fasting month and the run-up to Idul Fitri celebrations

Linda Yulisman (The Jakarta Post)
Jakarta
Thu, August 4, 2011 Published on Aug. 4, 2011 Published on 2011-08-04T07:00:00+07:00

Change text size

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!

L

ogistics firms have raised freight delivery costs up to 20 percent amid a surge in freight volume during the Ramadhan fasting month and the run-up to Idul Fitri celebrations.

The Indonesian Logistics Association (ALI) chairman Zaldy Masita said on Wednesday that freight volume during Ramadhan would rise between 30 and 50 percent due to an increase in food and beverage deliveries.

“The price hike is seasonal. It will likely return to normal about two weeks after Idul Fitri,” he told The Jakarta Post over the telephone.

Zaldy cited the example of freight delivery costs between Jakarta and Semarang, Central Java, which were currently Rp 3.5 million (US$413) per truck, up 9.4 percent from the non-peak price of Rp 3.2 million.

The increase in logistics costs, he said, could be reduced if more freight trains were added to accommodate the surge in volume.

However, deliveries were still heavily dependent on trucks, which were vulnerable to various factors, such as traffic jams and road conditions.

Currently, Indonesia’s logistical system relies on land transportation to cover about 85 percent of total freight deliveries, despite the archipelago’s more than 17,000 islands.

Trucks carry 90 percent of the nation’s land freight, with the remaining 10 percent handled by the nation’s train network, which has insufficient facilities, loading and unloading capacities.

Zaldy said aside from seasonal increases, logistics costs in Indonesia would likely increase by up to 5 percent in 2012 unless there was significant improvement to the nation’s infrastructure, despite stable fuel prices.

Cost spikes, he said, would be inevitable as major land transportation bottlenecks, such as traffic jams, on Java Island as well as outside Java had continued to reduce the frequency of goods shipments and had hampered logistical operations.

“Poor infrastructure leads to heavier traffic jams, which really make goods delivery inefficient,” he said.

Earlier, ALI said that logistical costs in Indonesia, Southeast Asia’s largest economy, were among the highest in the region, running between 25 and 30 percent of the nation’s gross domestic product (GDP), double the ideal figure of 15 percent GDP.

The figure was also higher compared to neighboring countries such as Thailand and Singapore, whose logistical costs were estimated at 16 percent and 10 percent of their GDPs respectively.

In line with that assessment, the 2010 World Bank’s Logistics Performance Index (LPI) ranked Indonesia 75th of 155 countries surveyed, behind Malaysia (29th), Thailand (35th), the Philippines (44th) and Vietnam (53rd).

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.

Share options

Quickly share this news with your network—keep everyone informed with just a single click!

Change text size options

Customize your reading experience by adjusting the text size to small, medium, or large—find what’s most comfortable for you.

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!

Continue in the app

Get the best experience—faster access, exclusive features, and a seamless way to stay updated.