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TRADE LOGISTICS AND COMPETITIVENESS

TRADE LOGISTICS AND COMPETITIVENESS. Henry Sandee Trade Economist World Bank Office Indonesia. The Challenge. The Challenge. Dom shipping costly. Corridors CY/CY (USD/TEU) JAKARTA-SINGAPORE 180 – 24 5 SEMARANG-SINGAPORE 20 5 – 2 6 5 SURABAYA-SINGAPORE 200 – 2 1 5

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TRADE LOGISTICS AND COMPETITIVENESS

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  1. TRADE LOGISTICS AND COMPETITIVENESS Henry Sandee Trade Economist World Bank Office Indonesia

  2. The Challenge

  3. The Challenge

  4. Dom shipping costly CorridorsCY/CY(USD/TEU) • JAKARTA-SINGAPORE 180 – 245 • SEMARANG-SINGAPORE 205– 265 • SURABAYA-SINGAPORE 200 – 215 • JAKARTA – PORT KLANG 135 – 190 • SURABAYA-PORT KLANG 175 – 240 • SEMARANG-JAKARTA 270– 300 • SURABAYA-JAKARTA 300 –480 • BELAWAN-SINGAPORE 205 - 210 • BELAWAN-PORT KLANG 160 - 170 • JAKARTA-BELAWAN 250 - 350 • JAKARTA-PADANG 600

  5. CFS CFS Transport Transport Transport Transport Flow of Cargo Import Raw Material – Export The Finished Goods Flow of Sea Cargo Movement: Port to/from Factory Inbound Cargo Movement Stevedoring Terminal Handling Trucking Factory LCL Overbrengen W/H Raw Material W/H Finsihed Goods FCL YOR >85% 1st Line Perimeter 2nd Line Perimeter Out bound Cargo Movement Stevedoring Terminal Handling Factory FCL Konsolidasi LCL W/H Raw Material W/H Finsihed Goods Trucking FCL 1st Line Perimeter 2nd Line Perimeter

  6. What the LPI does … Trading behind, at and across borders Helps countries to formulate a logistics strategy

  7. www.worldbank.org/lpi Ranking of countries: • Logistics business environment • Performance data Data gathered in more than 150 countries

  8. The LPI measures seven dimensions of country logistics performance: • Efficiency of the clearance process • Quality of trade and transport infrastructure • Ease of arranging shipments • Quality of logistics services • Tracking and tracing • Timeliness (tepat waktu) • Domestic costs (trucking and shipping)

  9. Key Findings • Performance often influenced by the weakest link in the supply chain • Reliability as important as transport costs and speed • Do not directly associate good logistics systems with low costs

  10. LPI Ranks

  11. Key Policy Implications • Expand the traditional reform agenda beyond customs reform and infrastructure development • Embark on comprehensive reform—value chain approach • Need for broad public and private support: there should be quick wins • Tailor reform to the each country’s circumstances

  12. Changes in logistics performance • New survey: May • first results in May-June 2009 • New improved questionnaire • inclusion of a Customs module • Assessment of changes in logistics performance will be possible

  13. Logistics reform in Indonesia The Government of Indonesia prepared a logistics blueprint and action plan LPI helped to identify and quantify bottlenecks (weakest link) Choke points identified (e.g.Cikarang – Tanjung Priok) Collaboration with the Thai logistics council Grand strategy versus quick wins

  14. SME and logistics Small amounts, can afford poor transport services only, poor service providers Less than one container loads 60 percent of Indonesian SME exports do not arrive at their final destination on time and/or with agreed quality How to solve this problem: any role to play for the government?

  15. SME and logistics - clusters Standardization – learning by seeing Easier to export full container loads Easier to involve (foreign) buyers in handling the export trade process

  16. Contact Us The World Bank GroupInternational Trade Department www.worldbank.org/lpi www.worldbank.org/trade www.worldbank.org/tradefacilitation www.worldbank.org/tradelogistics Washington Office 1818 H Street NW Washington DC 20433 Contact: tradefacilitation@worldbank.org

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