Enjoying 7% Growth, But Transportation Sector to Face More Challenging Future

Though still enjoying a positive growth by more than 7.4% during this year, but the transportation and logistics sector will face a more challenging future due to the slow global economy growth and the trade war between USA and China, some key note speakers  for the Sixth  Indonesia Transport Supply Chain and Logistics (ITSCL) 2019 have said.

The Sixth  Indonesia Transport Supply Chain and Logistics (ITSCL) 2019 was officially opened today. The event unites the Indonesian business players of transportation and logistics as well as port operators. Some associations relating the sectors also joint it, including Indonesia Chamber of Commerce and Industry (KADIN), Indonesia National Shipowners’ Association (INSA), Indonesia Shipbuilders Association (IPERINDO), and Indonesia Port Operators Association (ABUPI).

On her remark speech, KADIN Vice Chaiwoman for Transportation said Carmelita Hartoto said the acceleration of government infrastructure programs had helped the business of transportation and logistics to enjoy a positive growth, though facing many challenges.

“Within the challenges of world’ slow economy and tight competition, we appreciate very much that our transportation and logistics sector is still growing positive. It was even higher than the economy growth which is at more than 5%,” said Carmelita.

Carmelita also appreciated the the improvement of logistics performance index but warned that the high contribution of this sector to GDP.

She quoted the World Bank release saying that Indonesia LPI has increased from 63rd to 46th but noted that the logistic cost is still high, reaching 24% of GDP.

“There is an improvement as shown by our LPI, thanks to some government economy package and the acceleration of infrastructure development. But, we hope our logistics cost will be more efficient,” she said.

Hence, she urged the government to continue some infrastructure programs to help the logistics sector be more and more efficient.

In addition, government support is needed in helping the logistics sector be ready to face the industry of 4.0. “Logistics will face a more challenging future. Government support and assistance is absolutely needed,” she said.

Meanwhile, Minister of Transportation  Budi Karya Sumadi underlined that government absolutely commits to support the transportation and logistics sector to get improvement. The infrastructure programs and some economy package have proven it.

“Government will continue to do infrastructure development,” he said, claiming that the improvement of LPI is a result of government program in infrastructure development.

But, he expects such improvement will trigger more investment to come and encourage the increase of Indonesia’s export.

Government, he said, would continue to support the logistics improvement through  providing easiet permit process.

However, he admitted that the programs have not been able to move some hub both in aviation and shipping to Indonesia. “It is true that some of our leading ports have done improvement. But, they are still lost competitiveness with some hubports of our neighbor countries,” he said.

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