26 July 2023
As we reported in our article last month (Single Window to Improve Logistics), Indonesia’s Logistics Performance Index (LPI) was ranked by the World Bank at 63rd out of a total of 139 countries with an LPI score of 3.0 – a fall from 46th place five years ago.
LPI’s performance is calculated based on six dimensions, namely: customs; infrastructure; international shipments; logistics competence and quality; timelines; tracking & tracing.
The LPI publication by the World Bank released for 2023 is a presentation of data collected from 139 countries in the second half of 2022 – fewer than the 160 countries reached in the study five years earlier.
In an interview with the Indonesia Shipping Gazette on 24 July 2023, the Chairman of Indonesia Logistics and Forwarders’ Association (ALFI/ILFA) Yukki Nugrahawan Hanafi, suggested that the Indonesian logistics businesses should take the issue of drop in LPI as motivation for improvement, rather than viewing it as a problem.
Mr. Yukki said that this LPI is only a matter of ‘perception,’ based on the results of a survey using a certain method. So there is no need to get too stressed about this indicator, given the currently improving economic growth in Indonesia.
As the largest archipelagic country in the world, Mr Yukki noted, Indonesia cannot be compared with other countries in terms of its national logistics system, especially if the LPI survey only accommodates a few commodities.
He believes the most important thing at the moment is – apart from remaining committed to improvements in the logistics sector – that Indonesia must focus on maintaining economic growth in order to realize the Golden Indonesia program for 2045.
Mr Yukki said that, regarding the improvement of the national logistics system, the government has done many things, including regulating traffic and productivity, digitization, transformation of domestic business actors, to encourage investment growth in the sector.
“Once again, let’s not argue or worry about the LPI too much,” he concluded.
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