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Logistics performance: Lessons learned for Indonesia
Judging from the LPI infrastructure indicator, Singapore and India are superior to Indonesia mainly due to the significant development of infrastructure intended for logistics activities
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Business as usual: Ships at the container terminal on July 26, 2023, in Tanjung Priok port in North Jakarta. Statistics Indonesia recorded a trade surplus of US$3.45 billion in June 2023. (Antara/Hafidz Mubarak A)
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he World Bank’s 2023 Logistics Performance Index (LPI) ranked Indonesia 63rd out of 139 countries. The country dropped 17 places from its 2018 ranking of 46, with a score of 3 (from a possible 5) as against 3.15 five years ago.
The slump came as several Asian neighbors made progress, such as the Philippines, which rose 17 places (from 60 to 43), Malaysia which rose 11 places (from 41 to 30), India which jumped six spots (from 44 to 38), and Singapore which rose from seventh place to number one.
The questions are why has Indonesia’s LPI declined, and what can we learn from those improving countries?
Lamia Bennis, a senior logistics specialist and a consultant from the World Bank, told a seminar held by Stranas PK on July 18 that the index should be considered the perception of logistics professionals in regard to Indonesia.
It is important to note that the LPI was sourced from a structured online survey of logistics professionals at multinational freight forwarders and the main global express carriers, such as DHL, FedEx, UPS, etc. In this case, the number of respondents for LPI 2023 totaled 652 globally, down by almost 25 percent from its 2018 survey, which involved 869 respondents.
Interestingly, Bennis created an analogy that the indicator may serve as a fever experienced by humans; it shows as a symptom, but the root cause might be different from one to another and therefore further analysis needs to be done.
To understand the LPI better, let us first detail the methodology of the LPI. Every respondent is asked to answer six core components of logistics performance questions in which five Likert-scale choices are provided. They need to fill out eight countries based on the trading partners of the respondents’ selected country of work.
