Lampung Potential for Logistics Centre of Southern Sumatera, but Calls for Improved Connectivity

Lampung Potential for Logistics Centre of Southern Sumatera, but Calls for Improved Connectivity

Lampung Province is expected to be developed as logistics centre of southern region of Sumatera Island in view of local economy potencies, availability of multi-modal infrastructure.

But, improvement of connectivity among transportation infrastructure are needed, speakers for the national logistics conference and Assembly Meeting of ALFI/ILFA (Indonesia Logistics and Forwarders’ Association) said their recommendation.

ALFI Chairman Yukki Nugrahawan Hanafi and Chairman of ALFI Chapter Lampung H. Zamzani on their remark speeches highlighted some national logistics constraints and challenges within Indonesia logistics business, including in Lampung Province. They noted Indonesia’s high logistics cost throughout the country, including in Sumatera Island, due to some problems of less improved infrastructure and poor connectivity.

Titled Optimizing Logistics Connectivity through Synergy and Friendly-Investment in Lampung Province, the conference has attracted participants of all executive boards of ALFI Headquarter, executive boards of ALFI DPW (Provincial Chapters), port operators, shipping lines, government bodies of Lampung Province and Central Government.

Some key speakers include: Rusli Rahim, Assistant Deputy of Infrastructure Connectivity at the Coordinating Ministry of Maritime and Investment, Wihana Kirana Jaya, Specialist in Economy and Transportation Investment at the Ministry of Transportation, General Manager of Panjang Port Drajat Sulistyo, Provincial Government of Lampung, and Welly Soegiono from private company PT.GGP the leading fruit and beverage producer at the province.

Quoting data from the association, Zamzami said Indonesia transportation and logistics activities are still inefficient, proved by high logistics cost and longer cycle-time in cargo delivery. Logistics cost reaches more than 23.7% of GDP (Gross Domestic Product).

“This is the highest compared to our neighbour countries in ASEAN,” said Zamzani, adding that this is higher than of Vietnam (15%), Thailand (13,2%), Malaysia (13%), and Singapore (8,1%).

This high logistics cost, according to Zamzani, also took place in Lampung province, but admitted that an improvement in the last year, thanks to the Sumatera toll road that has proved its contribution to a smoother flow of goods in the island.

Echoing the view, Yukki admitted an improvement. “Globally, there was an increase in Logistics Performance Index (LPI),” Yukki said, quoting data from the World Bank saying that Indonesia’s LPI has increased from 63rd (2017) to 46th (2018), though in ASEAN scope, it was down to fifth, from fourth, after those countries mentioned above.

Yukki also noted the problem of connectivity that halt flow of goods that finally affect the lower performance in logistics and supply chain business. Hence Yukki also called for improvement in connectivity, not only among the regions, but also among modes of transportation.

He appreciates any efforts for the connectivity among modes of transportation in Lampung province.

“What we need for a more efficient logistics are including improving and building infrastructure, connectivity, and business players competitiveness,” Yukki said.

In addition to those problems above, Yukki and Zamzani also remind the two challenges that call for higher concern: business digitalization (logistics in the era of 4.0 industry) and ASEAN connectivity.

“These challenges require our readiness in logistics infrastructure and connectivity,” Yukki reminded.

Logistics Hub

Quoting the potential economy growth which was accounted to 5.7% in 2019 and the strategic position of Lampung Province, Yukki and Zamzani agree if Lampung is very potential to be the centre of logistics and distribution hub for southern part of Sumatera Island.

But, both call for improvement of infrastructure and connectivity within the region.

“Let the Sumatera toll road is connected with some gateways of cargo distribution as well as with some hinterland,” said Yukki.

In addition, Yukki expect for the development of some industrial centres and Logistics bonded zone (PLB).

Zamzani meanwhile expects for building direct toll access to some distribution gateway. “Just execute the plan to build direct toll to Panjang Port. This is an example of building better connectivity,” he said.


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