Jakarta. The government released its 15th policy package, which aims to reduce high logistics costs in the archipelago while supporting local logistics companies to compete against foreign counterparts, a senior minister said on Thursday (15/06).
Logistics costs in Indonesia are among the highest in Asia, comprising 24.6 percent of the country's gross domestic product in 2014, compared with Singapore's 8 percent, Malaysia's 14 percent, Japan's 9 percent and South Korea's 13 percent, Coordinating Economic Affairs Minister Darmin Nasution said in a statement.
Logistics costs also account for up to 40 percent of the retail prices of goods sold in the country, with 72 percent of the cost spent on transportation.
"The 15th package is focused on national logistics system improvements to accelerate business development and the competitiveness of national logistics service providers," Darmin said.
The government will support local logistics, marine insurance, shipyard and ship maintenance companies by scrapping unnecessary regulations, providing incentives and easing restrictions on imports and exports.
Other efforts include standardizing documentation required for the transportation of goods within the country, as well as establishing a mechanism to reimburse container deposits. Darmin said the government will also reduce transport companies' operational costs.
For example, the government will try to improve the competitiveness of local shipyards by removing import duties on a list of 115 ship spare parts and components.
The government repealed and issued a total of 12 ministerial regulations, two circulation letters and one ministerial note to support business development in the logistics industry and develop a national logistics system.
The government also revised and combined three presidential decrees into one in the Indonesia National Single Window (INSW) to automatize export-import permits, which will reduce dwelling times at ports.