ALFI Institute proposes five steps to reduce Indonesia’s logistics costs:
- improve logistics infrastructure (land, sea, air),
- simplify fiscal and trade governance,
- harmonize regulations and bureaucracy,
- revitalize transport fleets,
- strengthen logistics businesses and human resources through digitalization.
High logistics costs hurt Indonesia’s competitiveness, especially amid rising global trade tariffs, even though logistics costs have fallen from 26% of GDP in 2014 to 14.3% in 2024.
Main causes of high costs are uneven infrastructure and inefficient supply chains, so comprehensive and simultaneous policy action is needed to improve trade, services, and investment.
