In the last five years, the government has intensively and massively developed transportation infrastructures – seaport, land roads, airports and other related transportation infrastructures- throughout the country. One of the targets of this is to make a better connectivity.
In addition to this physical connectivity, the government has also massively accelerated programs of developing telecommunication infrastructure. For example, the government has developed Palapa Ring. Again, the target is for a better connectivity, a better digital connectivity. The Palapa Ring can extend the internet network throughout the country, supporting a fast communication via online in any sectors, including business transaction.
Supported by connection of 35,280 sea cables and 21,807 land cables, this network has reached 34 provinces, 440 municipalities/regencies as beneficiaries.
Yukki Nugrahawan Hanafi, Chairman of Indonesia Logistics and Forwarders’ Association (ALFI/ILFA), appreciates with those achievements, but notes that this is just the initial bases. He calls for further policies and steps to make this connectivity really give benefits for community and business, including the business in logistics.
“These physical and digital connectivity are initial bases,” he said in a press release to Indonesia Shipping Gazette today, Monday, June 15.
He admitted some further programs taken by some government institutions as the steps to realize this connectivity vision, naming some programs from Directorate General of Customs and Excise, Ministry of Finance, in a bid to support fluent process of logistics and international trade.
He mentioned the policies of advance manifest system, export simplification for CBU Vehicles, web-based import and export system, export simplification for CPO and derivatives, D/O Online System, electronic SKA, TPS Online System, and auto-gate system.
However, those policies and systems have not significantly helped this country’s logistics performance, proved by LPI (Logistics Performance Index) in 2018 which was still behind neighbour countries. Indonesia LPI rank in 2018 was at 46th, still behind Malaysia (41), Vietnam (39), Thailand (17), and Singapore (7).
According to Yukki, among the other reasons of this lower performance, was due to the absence of a one-stop digital platform in logistics sector that can connect information of both supply and demand.
Digital Platforms Collaboration
Yukki affirmed many parties, including government bodies and private business entities, have been developing several platforms. Ministry of Finance for example, was developing the National Logistics Ecosystem (NLE). NLE will unite logistics business players, both export and import, in a single platform in which they can do information exchange under the concept of API (Application Programming Interface).
Yukki noted that ALFI was ready to support this program and will make it as a part of ALFI’s program of ecosystem collaboration. ALFI is now designing the digitalization of smart logistics, a platform collaboration displayed at ALFI website (ilfa.or.id) and is connected with digital platform of Digico (digico.id).
This platform collaboration has been developed in phases. Now, some modules that have been ready include import and export module as well as track and trace covering 150 countries. And next, this platform collaboration will include the total supply chain and to last mile delivery.
For the initial step, the track and trace modules cover the transportation of sea, land, and air modes. ALFI will soon include the track and trace modules to IoT, warehousing, depo, cross border data exchange, and to banks and insurance to support trade financing.
“In addition, ALFI will also build cooperation with Peruri Digital Security for digital security aspects,” Yukki, who is also Chairman of ASEAN Federation for Forwarder Association (AFFA), said further.
He reminded that the business innovation and transformation should be accelerated in responding the coronavirus (covid-19) outbreak. Business digitalization, he said, will make the business stay running during this pandemic. Any communication and meetings can be done through virtual.
“For the time being, it must be not a big deal to develop smart logistics since the government has initiated a concept of National Logistics Ecosystem to support fluent flow of goods and flow of documents,” said Yukki.
He said the key word is collaboration, in which the digital connectivity can be done seamless and end to end, without manual intervention process.
“What is most important is a collaboration of digital platform into one ecosystem, thus making a seamless synergy among stakeholders of both government and private,” Yukki said.