At the beginning of 2025, national logistics costs were still considered high, posing challenges for inter-island goods distribution. Rising logistics costs contribute to inflation and economic disparities between regions.
Joewono Soemardjito, a researcher at the UGM Center for Transportation and Logistics Studies (Pustral UGM), stated that Indonesia’s high logistics costs are a natural consequence of its archipelagic geography, which includes more than 17,500 islands.
As a result, the transportation of goods and commodities must rely on inter-island shipping.
“This situation inevitably requires ships to transport goods, leading to higher costs,” he said at UGM on Saturday (Feb. 15).
Other factors, including port service fees, contribute to the high national logistics costs. Delays in loading and unloading operations further increase the time a ship remains at port, raising operational costs and shipping tariffs.
“This also affects total shipping costs. Moreover, land transportation costs must be accounted for when moving goods from production sites to ports, with expenses correlating directly to distance and cargo volume,” he explained.
He elaborated that logistics costs include transportation costs, storage fees, and administrative expenses (such as permits and documentation).
From a transportation perspective, the cost of transporting goods plays a major role in overall logistics expenses and is largely influenced by the mode of transport used.
For instance, the cost of shipping goods via sea, reflected in freight rates, depends significantly on cargo volume.
“The higher the cargo volume, the lower the freight rate per unit, and vice versa,” he noted.
Soemardjito suggested that reducing logistics costs—particularly transportation costs—could be achieved by consolidating cargo in production areas to create higher shipment volumes, which would help lower freight rates.
Additionally, improving port infrastructure with enhanced facilities could expedite loading and unloading processes, thereby reducing costs.
Author: Agung Nugroho
Photo: Freepik