Compendium of Best Practices and Benefits of National Logistics Associations

1. Compendium of Best Practices and Benefits of National Logistics Associations in Selected APEC EconomiesSecond Workshop, Shangri-La Hotel Bangkok, 27 February – Friday 2 March 2012 Author: SitiAriyantiAdisoediro & Theo Kumaat Organization : Indonesian Logistics and Forwarders Association (ILFA) Economy: Indonesia

2. Compendium of Best Practices and Benefits of National Logistics Associations • Purpose of Presentation • Objective: • To provide a project update since Workshop One. Bangkok Workshop,27 February – Friday 2 March 2012 No. 2

3. Background Number of Islands : + 17.504 Coast Line : + 81.000 km Land : 1,9 Million km2 Water : 5,8 Million km2

4. International and Domestic Trade Source : Ministry of Transport

5. Associations There are two different group of National Logistics Association in Indonesia : 1. Group of companies 2. Group of professional Group of associations related to Logistics activities are : ILFA (Indonesian Logistics and Freight Forwarder Association) INSA (Indonesian National Shipowner’ Association) ORGANDA (Trucking Association) APBMI (Stevedoring Association) ASDEKI (CFS Operator Association) ASPERINDO (Courier service Association) INACA (Indonesia National Air Carriers Association) GAPASDAP (Inland Waterways & RoRo Operator Association) And Importer and Exporter association Group of professional are : ALI (Asosiasi Logistics Indonesia) MLI (MasyarakatLogistik Indonesia)

6. ALFI – AsosiasiLogistik & Forwarder Indonesia ILFA - Indonesian Logistics & Forwarders Association (Previously INFA – Indonesian Forwarders Association) Changed as of July 16, 2010 GAVEKSI

7. ILFA - Member Composition As of 2010

8. ILFA - Member Composition - Continued As of 2010

9. ILFA – Organization Span Training Area Regular Training Area

10. Compendium of Best Practices and Benefits of National Logistics Associations • Outcomes from Workshop One • Issues: • A Supply Chain Blueprint, critical to Indonesia’s future supply chain effectiveness has been created. Indonesian government has not adopted it Blueprint • It is critical that the government takes ownership of the Blueprint concept, as Indonesia needs a supply chain vision and consistency • There seems to be no political will to adopt the Blueprint • There are large logistical challenges • Passenger transport gets priority over freight transport Bangkok Workshop,27 February – Friday 2 March 2012 No. 10

11. Compendium of Best Practices and Benefits of National Logistics Associations Outcomes from Workshop One • The project plan: • Approach critical decision maker in government and request a meeting to understand their ideas, priorities, etc. Rewrite and rename the Blueprint based on the ideas of the new leadership team • Contact the Chamber of Commerce to ask for assistance to encourage the government to adopt the Blueprint Bangkok Workshop,27 February – Friday 2 March 2012 No. 11

12. Project Update – Outcomes BLUE PRINT INDONESIAN NATIONAL LOGISTICS SYSTEM The Blue Print of Indonesian National Logistics System has been finalized on December 26, 2011 and has been submitted to the president The blue print of Indonesian national Logistics system also inline with Master Plan for the Acceleration and Expansion of Indonesian Economic Growth Key Drivers

13. Project Update – Outcomes • 2. CAPACITY BUILDING IN HUMAN RESOURCE • Set up 2 teams on • Developing Logistics curriculum for formal degree. • Developing HR skill and set up certification for logistics competency Degree Program HR Action Plan National Logistics Blue print Certification Program

14. Project Update – Outcomes • 3. Regulation on Multimodal Transport Operator • The Government Regulation on Multimodal Transport Operator ( PP No. 8 / 2011) had been released from February 2011. This was the application under AFAMT (ASEAN Framework Agreement on Multimodal Transport) • The Ministerial Regulation (Permenhub No. 8 /2012). Just released and come intoforce February 8, 2012

15. Strategy • To strengthen and enhance capacity building performance • To increase awareness on Logistics update and new regulations, through Roadshow nationwide, newsletter, e-media • To increase awareness of using ICT • As an extraordinary member of Indonesia Chamber of Commerce and Industry (KADIN Indonesia), we have been actively involved in the logistics discussion. This is one of media to give feedback. • Actively involved in international environment, such as in FIATA, UNESCAP meeting, AFFA, FAPAA • To suggest the Indonesian Goverment to improve and develop infrastructure and balance trade between east Indonesia and West Indonesia

16. Lessons Learned • Understanding how The National Logistics Association is really needed to support the members and the government to make the best performance in logistics specially in terms of logistics cost which will effect to the buying power and domestic income and competitiveness in the global market

17. Challenges • There are many regulations that related to logistics activities, sometimes overlaping • Cost of developing HR is self funded and is still considered as a cost instead of investment • To align with other logistics or transport-related associations • Conflict of interest among association concerning tariffs • To minimize national logistics cost • Improvement the quality and availability of infrastructure • Improvement balance trade between the Island in west Indonesia and east Indonesia which effected to high cost • Investment of ICT is still too expensive and unaffordable specially for small and medium enterprises

18. Benefits • To have mutual recognition in the industry • Protecting and helping members form any dispute arise locally and internationally • To reduce operation cost in obtaining Customs Brokers permit • Helping members to develop and improve their staffs /managers • To negotiate with The Goverment regarding applicable of any taxes related to their business • To cover members’ liability of their performance by issuing STC • To have bargaining power to negotiate with the goverment and other association about tariff and insurance • Advocacy

19. Success Stories • Regulation on Multimodal Transport Operator effective into force february 2012 , after 11 years of proposal of transport regulation submitted in 2000 • Reduce of Tariff on Security Charge after the implementation of Regulated Air Cargo Regime • Customs accepted surety bond issued by Insurance company to cover Customs broker’s activity instead of blocking the money more or less USD 30 000.00 as a customs bond • ILFA’s STC (standard Trading Condition ) which first issued on 1986 and last revise on 2011 was accepted and on the process of endorsement by the Indonesian Government as mentioned on MinisterialRegulation no. 8/2012 • ILFA’s multimodal transport documents : FBL (Fiata Bill of Lading issued by FIATA) and DAB (Dokumen Angkutan Barang issued by ILFA/Gafeksi for local LC) officially accepted by the indonesian Government

20. Next Steps • To give feedback to the government regarding regulation on logistics services, to provide clear cut on company permit or license • To set up ASEAN standard on core curriculum of logistics together with AFFA members • To set up a competence certification body for nationwide (LSP Logistik) • To continuously update the vocational training material • Roadshow to 22 province ILFA regional offices (DPW) to meet members to have a workshops, seminars and trainings

21. Compendium of Best Practices and Benefits of National Logistics Associations • Conclusion • The NLA (Nationonal Logitics Association ) of Stakeholders is really needed and helpful for the members in terms of Human Resource capacity building, negotiating with the Government and other association,providing advocacy to members and also can be as a partner of the government, as liason officer between the goverment and stakeholders and one of the sources of information Bangkok Workshop,27 February – Friday 2 March 2012 No. 21

22. ALFI – AsosiasiLogistik & Forwarder Indonesia ILFA - Indonesian Logistics & Forwarders Association