Challenges and Opportunities of Transportation and Logistics Business

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UNAIR NEWS – The development of digital technology has spread to almost all aspects of business. Of course, the presence of internet-based technology promises convenience and improved service quality. One of them is in the transportation and logistics business in Indonesia which requires digital system support.

The digital system is applied in transportation and logistics business to deal with challenges of industrial revolution 4.0, almost all of its activities use technology.

Opportunities and Challenges 

Arief Tejo, Deputy of Surabaya truck business association, told UNAIR NEWS a few days ago in the ABC seminar that there are changes in the role of logistics in the economy such as to inefficient logistics, expensive production costs, low competitiveness, and poor economy.

In addition, according to 2018 Logistics Performance Index (LPI), there are five countries that have efficient scores in moving goods across the border. The five countries are Germany (Score 4.20), Sweden (Score 4.05), Belgium (Score 4.04), Austria (Score 4.03), and Japan (Score 4.03).

Then, how do you measure logistics trade? Because logistics consists of a service network that supports physical movement of goods inside and across borders. Then, it can be measured through Customs, Infrastructure, Tracking & Tracing components , Ease of International Shipments, Logistics Services quality, and Timeliness.

“You need to know, logistics follows trade. While trade follows logistics, “Arif Tejo said.

“For example, Surabaya port known as the International Port covers Tanjung Perak which has 29 domestic shipping routes and Tanjung Priok Port with 20 domestic shipping routes,” he said firmly.

Arief added, the challenges are internal and external. Internal challenges include, fragile logistics networks due to limited infrastructure and natural disasters, high cost economies, and local logistics companies that transform their companies into integrators (3PL). While external challenges include pressure from the international community in opening the logistics sector for foreign investment, regional contracts for logistics, and the development of ICTs that have had an impact on logistics.

“There is an impact on foreign investment in Indonesia, by building logistics infrastructure, competition will create ‘real winners’, increase local talent, and reduce best practices to reduce logistics costs,” he added.

Meanwhile, several current logistics business activities such as warehousing, transportation, shipping, and ports, according to him, have been connected by a technology-based system. So the competitiveness is improved with some impacts to be considered.

For this reason, the technology should be able to make logistics businesses vying to reduce their tariffs. (*)


Author: Rolista Dwi Oktavia

Editor: Khefti Al Mawalia


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