Tim Kerja SISLOGNAS/ Indonesian National Logistics Team

SISLOGNAS Office

Jakarta, 10 December 2012

The Challenge of Implementation of Presidential Regulation No.26/2012 on the Blueprint of Development of National Logistics System

Use of ICT As A Driver Toward:

“Locally Integrated, Globally Connected for National Competitiveness and Social Welfare”

Coordinating Ministry for Economic Affairs Republic of Indonesia

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Outline 1. Background: Issues Leading to the Issuance of the National Logistics

System (SIStem LOGistik NASional/SISLOGNAS) Blueprint

2. Presidential Regulation No.26/2012 on the Blueprint for Development of the SISLOGNAS* Implementing Structure Main Features SISLOGNAS and MP3EI on PPP Scheme Actions Plan 2011 – 2025

3. Challenges of Implementation 2012 – 2015 Among Others ---- No. 5: The National e-Logistics system (INALOG) is developed and No. 17: Dry ports are operating efficiently

4. Use of ICT As A Driver Toward: “Locally Integrated, Globally Connected for National Competitiveness and Social Welfare” Maybe they are not “aple-to-aple” but “cargo release/dwell time” at Tanjung Priok by: (a) JICA 2004-2005 Study

(b) The World Bank 2009, 2011 – June 2012 Studies (c) The Use of ICT (KOJA & EDII): i-CARES/CargoLink, in the case of Toyota, Nov 2012

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*English Unofficial Translation is available and will be sent through e-mail

Country LPI Rank

China 27

Thailand 35

Philippines 44

India 47

Tunisia 61

Honduras 70

Ecuador 71

Indonesia 75

Paraguay 76

Syrian Arab

Republic 80

Country LPI Rank

India 46

Morocco 50

Philippines 52

Vietnam 53

Egypt, Arab Rep. 57

Indonesia 59

Yemen, Rep. 63

Ukraine 66

Pakistan 71

Guatemala 74

1. Background

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Presidential Instruction No. 5/2008 on Focus of Economic Programs 2008-2009, among others: – Chapter II. Movement of Goods and Customs Item C. 1(a): 2nd Stage implementation of

Indonesian National Single Window (INSW); Item C.2: Begin to prepare the SISLOGNAS

Blueprint. – Chapter VI. Commitment to Establish ASEAN ECONOMIC COMMUNITY (AEC) 2015 Item 7(vi): Ratification of the Agreement for

the Integration of Priority Sectors (PIS) by 2013, where Logistics is the 12th Sector.

ASEAN Economic Community 2015 Blueprint, Signed by Leaders on 13th ASEAN Summit in November 2007 – ASEAN Single Market and Single Production Base

Word Bank LPI 2010 World Bank LPI 2012

Lower-Middle Income Lower-Middle Income

2. Perpres No.26/2012 (1): Implementing Structures

Signed: 5 March 2012; Entry-into-force: 5 March 2012 Establishes the SISLOGNAS Blueprint – as an integral part of the Perpres – and:

― It is prepared by collaboration of private sectors (associations), academician, practitioners and ministries/government agencies’ representatives (40:40:20);

― It is a reference on logistics development for relevant stakeholders and on policy coordination and National Logistics System development. For the business sector, it is to support them to improve their competitiveness, more investment opportunities to micro, small and medium enterprises and more opportunities for national logistics actors and service providers to establish cooperation on a global scale.

― Shall be referred by ministers, heads of non-ministerial agencies, governors and regents/mayors in developing policies and work plans related to the development of the National Logistics System in their respective field of tasks, to be set out in the strategic plans of each respective ministries/non-ministerial government agencies and local governments as part of the development planning document.

― Main Approaches: (a) Supply Chain Management, (b) Paradigm: Ship follows the trade & ship promotes the trade, (c) Implemented through 6 (six) key drivers.

The implementation shall be coordinated by the Committee on Acceleration and Expansion of Indonesia’s Economic Development 2011-2025 (KP3EI) established by Presidential Regulation Number 32 Year 2011 on MP3EI 2011-2025.

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2. Perpres No.26/2012 (2): Implementing Structure

An [implementing] Working Unit may be established the Coordinating Minister for Economic Affairs (CMEA) acting as KP3EI’s Executive Chairperson, to:

(1) Coordinate and monitor the implementation of the SISLOGNAS Blueprint, and to serve as a Damage Control Unit; (2) Evaluate implementation progress of all action plans, measure whether efforts and actions taken have been effective and produced proper results and benefits to determine achievement of milestones and key performance indicators (KPI) of all related stakeholders; (3) Report on the progress of SISLOGNAS Development, including taking necessary steps to resolve emerging issues, including cross sectoral and regional obstacles, and (4) [for the long-term and medium-term purposes], conduct studies and recommend whether the government should establish a permanent institution to coordinate the SISLOGNAS Development.

The CMEA issued Decree No.KEP-49/M.Ekon/5/2012 on 10 May 2012 to establish “Tim Kerja SISLOGNAS”/Indonesia National Logistics Team:

(1) Head: Deputy Minister for Industry and Trade Affairs, CMEA; Secretary: Expert Staf to the CMEA on Poverty Reduction; Members: Echelon I/DGs of related Ministries, Head of Agencies, and Representatives from Chamber of Commerce and Associations; (2) Supporting Expert Group: Academicians and Practitioners, and (3) For day-to-day operation, a Secretariat and Sub-Tim Kerja SISLOGNAS (STK) may be established with membership and tasks to be stipulated by the the Head of the Tim Kerja SISLOGNAS.

The Head of the Tim Kerja issued Decree No.27/D.IV.M.EKON/07/2012, on 24 Juli 2012 to established the Secretariat and Sub-Tim Kerja (STK, according to 6 key drivers) consisting of: representatives of related ministries/agencies, academicians and practitioners.

Missions

1. Support the effective and efficient flow of goods to ensure public basic needs are met, and that national product competitiveness is improved on the domestic, regional and global markets.

2. Create national logistics nodes and build their connectivity in rural and urban areas, and between regions, islands and international hub ports through multi-stakeholder collaboration.

Objectives: Support the effective and efficient flow of goods

1. Ensure the availability of basic and strategic commodities across Indonesia at affordable prices enabling a fair and prosperous society and strengthen the national sovereignty and integrity;

2. Reduce logistics costs through improvement of flow of goods and improved national logistics services capacity thus improve national competitiveness in national and global markets;

3. Prepare for international commitments (e.g., ASEAN logistics integration under PIS, AEC in 2015, and global market integration ).

Vision 2025

Locally Integrated, Globally Connected for National Competitiveness and Social Welfare

2. SISLOGNAS Blueprint (3): Main Features

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MP3EI: Masterplan of the Acceleration and Expansion of Indonesian Economic Development, 2011 - 2025

Connectivity Economic Corridor

SISLOGNAS

Mission of Indonesian Economy 2025 “To Actualize Self-Sufficient, Advanced, Just, and Prosperous Indonesia”

To Improve Social Welfare

To Improve Competitiveness

MP3EI

Knowledge, Technology and Art

2. SISLOGNAS Blueprint (4): Main Features - Framework

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2. SISLOGNAS Blueprint (5): Main Features - 6 Key-Drivers

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Local and National Network Integration Global Network Connection

Europe

City

Asia

America

Indonesia

International

Hub Port

Rural

City

City

Africa

Australia &

Oceania

Rural

Rural

Rural

Rural

Rural

Rural

Rural

Rural

Inter Island

Inter Island

Inter Island

2. SISLOGNAS Blueprint (6): Main Features - Network System

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Short Sea Shipping is the backbone of National Freight Transportation System SLoC: Sea Lane of Communication; ALKI: Alur Laut Kepulauan Indonesia (Indonesian Archipelagic Sea Lane)

Pusat Distribusi Provinsi

Pusat Distribusi Nasional

Legend:

By sea / by rail By land / by rail / by seaBy sea / by rail / by land

Konektivitas:

Short Sea Shipping

Provincial Distribution Center

National Distribution Center

2. SISLOGNAS Blueprint (7): Main Features - Short Sea Shipping

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Each regency/city/province will have one Distribution Center. Each Economy Corridor will have at least one National Distribution Center.

Distribution Center will be designated as buffer stock.

Pusat Distribusi Provinsi

Pusat Distribusi Nasional

Legend:

Provincial Distribution Center

National Distribution Center

2. SISLOGNAS Blueprint (8): Main Features - Distribution Network

of Main and Strategic Commodities

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CUSDEC C/O Rcmd OtherDocs

P/O L/C D/OB/L

OtherLSP

QuarantineOtherGov’t

Agencies

ShippingLInes

ExporterImporter

ForwarderMinistry

TradeCustoms

NIL

ITS

MES

SAG

ING

HU

B

INTERNATIONALGATEWAY

NATIONALGATEWAY

INTER ISLANDINTRA ISLAND

Inte

rnat

ion

al

Trad

eD

om

esti

c Tr

ade

National Single Window (G2G and B2G) Customs Advanced Trade System eTradeLogistics (B2B)

National Integrated Trade, Logistics and Intermodal Transport Messaging Hub System(Secured and Assured Messages Delivery System)

ASEAN SINGLE WINDOW GLOBAL NETWORK

An integrated services on data/information and documents for both domestic and international trade, interconnected to ASEAN and Global Networks

2. SISLOGNAS Blueprint (9): Main Features - ICT Infrastructure

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2. SISLOGNAS Blueprint (10): SISLOGNAS & MP3EI on PPP Scheme

MP3EI

MP3EI (pp. 20-21): on Economic Transformation and Business As Usual:

"In order for Indonesia to accelerate its economic development, Indonesia will need to embrace a new way of thinking, a new way of working, and a new way of conducting business....The implementation of the new way of thinking in the economic development, needs collaborative efforts among government, local governments, SOEs, private enterprises and the people. The government has very limited funds to finance development through its State Budget (APBN). Thus, to foster the economic growth in Indonesia, it will depend on the private sector participation which includes state-owned enterprises, and private domestic and foreign investors.

The old thinking suggests that infrastructure must be built using government funding. However, due to the limitation of government funding, the old line of thinking resulted in the slow fulfillment of adequate infrastructure to support rapid development. Under the new way of thinking and working, cooperations between the government and the private sector under the public-private partnership (PPP) scheme is expected to bring in much needed investments."

SISLOGNAS (Perpres No.26/2012) is part of MP3EI (Perpres No.32/2011) http://www.ekon.go.id/activity/2011/02/07/download-file.

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Phase I (2011-2015)

Goal: lay a strong foundation to establish an effective and efficient National Logistics System in order to achieve the locally integrated vision and create a strong basis for being connected to ASEAN logistics networks

Action: Regulatory

Revision, HR Development and Logistics Infrastructure Improvement in order to create Local and National Logistics Integration

Phase II (2016-2020) Phase III (2021-2025)

Goal: strengthen domestic logistics integration, and synchronization, coordination and integration with ASEAN logistics networks, and lay a strong foundation to be integrated with the global logistic network to achieve the Globally Connected vision

Action: Development and expansion of logistics infrastructure, capacity building for actors and providers of logistics services to make the national logistics system connected to the ASEAN logistics network

Goal: operate effective and efficient national logistics system connected to the Global logistics network

Action: Strengthening of the National Logistics System to be connected to the Global Logistics network

•National Logistics Costs of the 2015 GDP declines by 3% from that of 2011 •Indonesian LPI Score is 3.1

•National Logistics Costs of the 2020 GDP declines by 4% from that of 2015 •Indonesian LPI Score is 3.3

•National Logistics Costs of the 2025 GDP declines by 5% from that of 2020 •Indonesian LPI Score is 3.5

2. SISLOGNAS Blueprint (11): Action Plans

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2. SISLOGNAS Blueprint (12) is...

Provides awareness of growing problems in detail; Is a high priority program in government’s agenda and

Identifies Action Plans in detail; Is a product of public and private consultations; Has a commodity specific and supply chain approach

that provides a framework to identify distribution centers and consider difference of treatments for different producs;

Requires SISLOGNAS’ performance measurement Identifies bigwins Recognizes the need of coordinating team to be

evolved to a possibly agency or council

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3. Challenges 2011-2015 (1): From Action Plans/Bigwins 2011-2015 to Implementation (# 5 and 17)

No Action Plans/Big Wins Time Target

1 Establish and develop international hub seaports in Kuala Tanjung and Bitung (including their detailed plans), and international hub airports in Jakarta, Kuala Namu and Makassar

2011-2015

2 Kalibaru Port as extension of Tanjung Priok Port is constructed and developed 2012-2015

3 Short Sea Shipping at Pantura route and East Trans-Sumatra Highway (Jalintim Sumatra) are in operation

2012-2015

4 Cargo railways in Java and Sumatra have higher role 2012-2015

5 The National e-Logistics system (INALOG) is developed 2012-2015

6 Capacity of pioneer and national ship fleets for passenger and cargo transport in the East Region of Indonesia are higher 2012-2015

7 Availability, quality and capacity of interisland water transport are improved through empowerment of national shipping and traditional/people’s shipping

2012-2015

8 Logistics centers to serve consolidated containers for SME exporters’ LCL cargoes are established 2013-2015

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3. Challenges 2011-2015 (2): From Action Plans/Bigwins to Implementation (# 5 and 17)

No Action Plans/Big Wins Time Target

9 Air cargo 24/7 service model at the Soekarno Hatta Airport is in operation 2012-2015

10 Some National Logistics Service Providers are becoming world class players 2012-2015

11 Commercial SOEs functioning as Trading House for Basic, Strategic and export Commodities are revitalized

2012-2015

12 Roles of SOEs (Post, BGR and Bulog) in Rural Logistics are improved 2012-2015

13 National education and training system of international standard for logistics profession is underway

2012-2015

14 Regional Distribution Centers for basic and strategic commodities in each economic corridor are constructed

2012-2015

15 Regulations and policies to promote efficiency in export-import activities are synchronized

2012-2015

16 Rupiah based logistics fees are in practice 2012-2015

17 Dry ports are operating efficiently 2012-2015

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3. Challenges 2011-2015 (3): From Action Plans/Bigwins to Implementation

Others

Action Plans/Big Wins Time Target

Establishment of SISLOGNAS ‘ Performance Measurement model (reduction of cost, time and uncertainty):

– Base-line (basic and strategic commodities as currently being transported by SOEs, price disparities)

– Gradual improvement of the model and methodology Note: One of the tasks of the Tim Kerja SISLOGNAS (p.6): “particularly to measure whether efforts and actions taken have been effective and produced proper results and benefits, and, the evaluation results are expected to measure the achievement of milestones and key performance indicators (KPI) of all related stakeholders.”

2012-2015

Support for the Secretariat:

– Best/Good Practices – Professional Minutes of Meetings (incl. in English)

2012

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“Study on Trade Releated System and Procedures,” Japan International Cooperation Agency,

March 2004 – March 2005

Average

Required

Days from

Discharge

to Gate Out

Source : The Study on Trade Related Systems Procedures in The Republic of Indonesia Japan International Cooperation Agency, Final Report, March 2005; DGBC/INSW Presentation, 3 Nov 2010

3,47

0,02

3,05

3,28

0,92

2,34

3,23

1,45

3,23

3,26

4,20

1,11

Jalur Hijau Jalur Hijau dgn Analyzing Point

Jalur Merah Jalur Merah dgn Anayzing Point

day

s

1

2

3

4

5

6

7

8

6,54 6,54

7,91

8,57

SPPB s.d Gate : Proses pengeluaran barang impor dari TPS (Pelabuhan) ke peredaran bebas, setelah mendapatkan persetujuan pengeluaran dr BC (Customs Approval) PIB s.d SPPB : Proses penyelesaian kewajiban pabean (Customs-Clearance) yaitu sejak pengajuan dokumen impor (PIB) s.d persetujuan pengeluaran dr BC (Customs Approval) Bongkar - PIB : Proses kedatangan kontainer barang impor, yaitu sejak pembongkaran dari kapal, movement, penimbunan s.d pengajuan dokumen impor (PIB) ke Kantor Pelay. BC

1

1

2

4. Use of ICT as a Driver (1): Dwell-Time, JICA 2004-2005

JICT update for 2009 (Jan - Sept): Dwell time declined from 6.3 days to 5.8 days or by 8%

-

50,000

100,000

150,000

200,000

250,000Ja

n-0

8

Fe

b-0

8

Ma

r-0

8

Ap

r-0

8

Ma

y-0

8

Jun

-08

Jul-

08

Au

g-0

8

Se

p-0

8

Oct

-08

No

v-0

8

De

c-0

8

Jan

-09

Fe

b-0

9

Ma

r-0

9

Ap

r-0

9

Ma

y-0

9

Jun

-09

Jul-

09

Au

g-0

9

Se

p-0

9

Th

rou

gh

pu

t (T

EU

s)

0

1

2

3

4

5

6

7

8

Dw

ell

ing

tim

e (

days)

Throughput

Dwell time

- Dwell time and througput for JICT terminal one

- Dwell time for full inbound containers excluding behandle and overbrengan

4. Use of ICT as a Driver (2): Dwell-Time at Tanjung Priok/JICT, The World Bank 2009 [L. Peter Rosner & Siti Budi Wardhani, October 2009]

4. Use of ICT as a Driver (4): Dwell-Time di Tanjung Priok/JICT, the World Bank Jan 2011 – June 2012

5.24 5.34

4.64

4.84

5.42

6.11

6.43

6.18

5.61

6.46

6.22 6.38

4.00

4.50

5.00

5.50

6.00

6.50

7.00

Dwelling Time (hari)

Source: JICT, The World Bank

Hari

4. Use of ICT as a Driver (5): Implementation of i-CARES/CargoLink at Tanjung Priok/Koja [The Case for Toyota, 14 Nov 2012]

Tim Kerja SISLOGNAS/Indonesian National Logistics Team

Many Thanks!

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