In September 2023, Indonesia’s logistics costs were reported to have decreased to 14.29% of GDP (Gross Domestic Product), a significant improvement from 23.80% in 2018. However, the government aims to reduce this figure further to 8% of GDP by 2045.
Pelindo, one of the country’s state-owned logistics infrastructure providers, is playing a pivotal role in helping achieve this ambitious target by accelerating port transformation efforts.
Minister of State-Owned Enterprises, Erick Thohir, emphasized the importance of reducing logistics costs, noting, “Indonesia has managed to reduce logistics costs by 13 to 14 percent, but it remains high compared to other countries. In line with President Prabowo’s directive to support the self-sufficiency programs in food, energy, and downstream sectors, we are continuing efforts to bring these costs down further,” he said after a coordination meeting with the Minister of Transportation, Dudi Purwagandhi, in Jakarta on October 29, 2023.
This collaboration between the Ministry of SOEs and the Ministry of Transportation aims to reduce logistics costs, particularly in the transportation sector. Pelindo’s transformation, driven by standardization and digitalization, is expected to boost port service efficiency and strengthen the strategic role of ports in the logistics supply chain, ultimately contributing to the national target of reducing logistics costs.
Efficiency Gains from Port Service Transformation
One key metric for assessing port efficiency is the “port stay,” which refers to the time a ship spends docked at a port. Shortening the port stay through faster loading and unloading processes can reduce shipping costs and improve operational efficiency for shipping companies. According to studies by Pelindo and feedback from customers, improvements in service speed have led to fuel savings of 15-30% per shipping cycle.
Pelindo has consistently implemented these service improvements across its operations. For instance, standardizing container operations at the Sorong Branch boosted productivity from 17 Boxes per Ship per Hour (BSH) to 30 BSH. Crane handling efficiency also increased from 8 Boxes per Crane per Hour (BCH) to 22 BCH, reducing port stay from an average of 72 hours to just 24 hours.
At Pelindo’s Jamrud-Nilam-Mirah Branch in Surabaya, operational standardization for liquid bulk commodities reduced port stay by 30%, from 89 hours to 62 hours. Similarly, improvements in handling dry bulk commodities led to a 22% reduction in port stay, from 86 hours to 67 hours. These efforts highlight Pelindo’s ongoing commitment to enhancing national logistics connectivity and supporting government programs focused on food security, energy, and industrial development.
Digitalization and Performance Growth
Pelindo’s President Director, Arif Suhartono, stressed that digitalization plays a crucial role in improving port performance. “The digitalization of port services enables more efficient goods flow management, with better monitoring through an integrated system. Pelindo is committed to further enhancing the logistics ecosystem, focusing on shortening port stays,” he said.
Pelindo’s transformation has led to notable growth in operational performance. By November 2024, the total volume of goods handled by Pelindo ports had reached 181.2 million tons, a 17% increase from the previous year. Of this, 55% consisted of export-import goods. Container traffic also saw a 6.4% increase, totaling 17.1 million TEUs, with 46% of containers being linked to export-import activities.
Pelindo’s ongoing transformation has been positively received by industry stakeholders. Slamet Raharjo, President Director of Meratus Line, praised the efficiency of Pelindo’s new approach, highlighting how the transformation facilitates smoother communication for shipping companies facing obstacles in loading and unloading processes. The streamlined, one-door service model has proven to be time-efficient and cost-effective for logistics operations.