Study On The Indonesia’s Maritime Logistics Systems Strategic Planning

At the end of 2015, ASEAN (The Association of South East Asian Nations) embarked on a new dawn, it was the start of the ASEAN Economic Community. A project designed to create a single market within ASEAN. This opened up endless opportunity for Indonesia to try to tap into a market of 600 millions people with the combined GDP of 2.3 Trillion US Dollars. However, it has also created uneasiness within Indonesian people, many were afraid that Indonesian product will find it hard to compete within ASEAN mainly due to the country debilitated infrastructure which has for many years resulted in a high logistic cost and unreliable and unflexible logistics system. The doubt about Indonesian competitiveness is not without reason since the backbone of trade and economic growth in today’s globalized world is a strong, reliable, but affordable logistics system.In 2014 the newly elected president Joko Widodo proposed to create a maritime transportation system, which he called "Sea Toll". At first the idea was designed to solve the high logistics cost in Indonesia, especially in the eastern part of Indonesia, the high logistics cost and the unreliability of transportation system has drove up prices of stapple foods and construction materials up to ten times the price in the more developed western part of Indonesia.The maritime transportation system proposed in 2014 has since been upgraded to maritime logistics system, a bold and ambitious, but nonetheless necessary by the current administration to promote economic growth through trade facilitation, and to prepare the nation as a major actor in ASEAN, ASIA and World Trade.The gist of the system is to provide a regular service of ships of various sizes starting from the western part of the country moving all the way to the eastern part of the country continuously with 2 interntional hubs and 4 national hubs, and many more strategic ports. The ports in this system will also offer additional logistics services, such as warehousing, storage, assembly, repairing, and information services.This research first point of entry is to analyze the current condition of Indonesian transportation and logistics systems, what are the conditions, what are the causes, and what are the effects on the Indonesian economy?This research then tries to present and analyze the plan by the current administration in order to address the issue, the arguments and reasoning supporting the plan as well as the obstacles are presented and analyzed. It is then followed up by a case study of USA andEuropean Union maritime transportation and logistics systems. Short analysys are presented regarding the implementation of maritime based logistics system.Finally, this research discusses about the logistics strategies as well as policies adopted by the Indonesian government in regard to improving the performance of the country logistics system.