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Pilot digital logistics system launched in Batam
Indonesia and potential investors may soon see a national digital logistics system in the world's largest archipelago with the launch of the Batam Logistics Ecosystem (BLE) pilot project.
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he government has launched the Batam Logistics Ecosystem (BLE), a one-stop digital platform that aims to reduce high logistics costs by eliminating red tape caused by paper-based processes.
“The potential for maritime projects in the Riau Islands is very high, which is why we want to accelerate these projects. The BLE can hopefully drive more investments [to] boost the province’s economy,” Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said on Thursday the BLE launch event in Batam, Riau Islands.
Read also: High logistics, power costs keep firms from investing in Batam
The BLE is a pilot project for the National Logistics Ecosystem (NLE), which was initiated in response to Presidential Instruction (Inpres) No. 5/2020 on nationwide logistics and distribution, issued last June. The 24-hour digital system is expected to increase transparency, simplify processes and improve communication pertaining to logistics management.
Luhut said the government also planned to install similar systems at seven other ports this year: Tanjung Priok in Jakarta, Patimban Port in West Java, two ports in Semarang, Central Java, with the remaining three ports in Makassar in South Sulawesi, Medan in North Sumatra and Surabaya in East Java.
He expressed the hope that the digital logistics pilot project could reduce shipping, distribution and other related costs from 23.5 percent of gross domestic product (GDP) at present to just 17 percent of GDP by 2024.
Indonesia, the world’s largest archipelagic nation, is notorious for having the highest logistics costs in Southeast Asia, according to the World Bank.
Finance Minister Sri Mulyani Indrawati said one reason for piloting the BLE was to boost the competitiveness of Riau Islands province, as its economy had been growing at a rate of below 5 percent over the past five years.
“With a system like [BLE], there will be no such thing as illegal levies or a system that makes business difficult,” she said during the launch.
Sri Mulyani added that the BLE would be the pilot project for the nationwide implementation of the NLE at seaports and airports.
The government estimates that it would save up to Rp 1.5 trillion (US$103.9 million) per year by digitalizing the national logistics system. It can also cut the number of licensing processes from 17 to just one.
Read also: Indonesia to proceed with logistics system reform
Secretary-general Kyatmaja Lookman of the Indonesian Multimodal Transport Operator Association (IMTA) said that while both the BLE and the NLE could increase transparency, simplify processes and lower costs, some trucking companies were still reluctant to use the system.
“This [reform] is important, because the processes we have had to go through so far lack transparency,” he told The Jakarta Post on Friday.
He added that it was “difficult to ask fellow trucking companies to get on board this system”, because the system did not yet accommodate other logistics management costs for companies, such as customs documents and digitization.
