NLE implementation projected to slash logistics costs to 17 percent

NLE implementation projected to slash logistics costs to 17 percent

Finance Minister Sri Mulyani Indrawati during a virtual joint press conference on the National Logistics Ecosystem (NLE) in Jakarta on Thursday (Sept 24, 2020). ANTARA/Dewa Wiguna/sh

With this reform, the logistics sector will get a boost, not only in terms of efficiency but also its contribution to enhancing competitiveness of the national economy.
Jakarta (ANTARA) - Implementation of the National Logistics Ecosystem (NLE) is estimated to reduce logistics costs, from 23.5 percent to 17 percent of the gross domestic product (GDP), Finance Minister Sri Mulyani Indrawati stated.

"With this reform, the logistics sector will get a boost, not only in terms of efficiency but also its contribution to enhancing competitiveness of the national economy," Indrawati stated here on Thursday.

Under the new system, business processes will be simplified through an integrated checking service that covers online single submission, port services, and licensing.

The system has integrated the work of several ministries and institutions: Finance Ministry, Transportation Ministry, Trade Ministry, Agriculture Ministry, Industry Ministry, Marine Affairs and Fisheries Ministry, Investment Coordinating Board (BKPM), Batam Development Agency (BP Batam), and some other related institutions.

The NLE system will function as a platform for business operators in transportation, shipping, ports, warehouse, and depo.

The system is expected to cut short the process for licensing, truck ordering, checking, and transporting.

Indrawati pointed out that logistics costs in Indonesia were higher as compared to those of other ASEAN countries, including Singapore and Malaysia.

Currently, logistic costs in Indonesia reaches 23.5 percent of the GDP, while in Malaysia, it only stood at 13 percent.

The government had earlier established the National Single Window (NSW) that connects 16 ministries/institutions, but the agency had yet to take into consideration the ecosystem to facilitate businesspersons and only focus on coordination among the ministries.

"Hence, importers, exporters, and logistics agencies have to repeatedly submit the license application to different institutions. There are several repetitive and complicated processes," she stated.

The NLE system will be implemented in stages until 2024 at Belawan Port in Medan, North Sumatra; Tanjung Emas Port in Semarang, Central Java; Tanjung Perak Port in Surabaya, East Java; and Tanjung Priok Port in Jakarta. Related news: Limitation of subsidized oil consumption to raise logistic cost
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