WORLD BANK GROUP May19, 2009 TRADE LOGISTICS AND COMPETITIVENESS Henry Sandee Trade Economist World Bank Office Indonesia.

WORLD BANK GROUP

May19, 2009

TRADE LOGISTICS AND COMPETITIVENESS

Henry Sandee

Trade Economist

World Bank Office Indonesia

The Challenge

The Challenge

Dom shipping costly

CorridorsCY/CY

(USD/TEU)

JAKARTA-SINGAPORE 180 – 245

SEMARANG-SINGAPORE 205 – 265

SURABAYA-SINGAPORE 200 – 215

JAKARTA – PORT KLANG 135 – 190

SURABAYA-PORT KLANG 175 – 240

SEMARANG-JAKARTA 270 – 300 SURABAYA-JAKARTA 300 – 480

BELAWAN-SINGAPORE 205 - 210

BELAWAN-PORT KLANG 160 - 170

JAKARTA-BELAWAN 250 - 350 JAKARTA-PADANG 600

WORLD BANK GROUP

May19, 2009

Stevedoring

CFSCFS

Terminal Handling

Transport

Trucking Factory

W/HRaw Material

W/HFinsihed Goods

Inbound Cargo MovementInbound Cargo Movement

LCL

FCL

1st Line Perimeter

Stevedoring

CFSCFS

Terminal Handling

Transport

Trucking

Factory

W/HRaw Material

W/HFinsihed Goods

OOut boundut bound Cargo Movement Cargo Movement

LCL

FCL

FCLKonsolidasi

OverbrengenYOR >85%

2nd Line Perimeter

1st Line Perimeter 2nd Line Perimeter

Flow of Cargo Flow of Cargo Import Import

Raw Material – Export The Finished GoodsRaw Material – Export The Finished Goods

Transport

Transport

Flow of Sea Cargo Movement: Port toFlow of Sea Cargo Movement: Port to/from/from Factory Factory

55

Flow of Cargo n Docs_4_3_final.ppt

What the LPI does …

Trading behind, at and across borders

Helps countries to formulate a logistics strategy

www.worldbank.org/lpi

Ranking of countries:

Logistics business environment

Performance data

Data gathered in more than 150 countries

Efficiency of the clearance process

Quality of trade and transport infrastructure

Ease of arranging shipments

Quality of logistics services

Tracking and tracing

Timeliness (tepat waktu)

Domestic costs (trucking and shipping)

The LPI measures seven dimensions of country logistics performance:

Key Findings

Performance often influenced by the weakest link in the supply chain

Reliability as important as transport costs and speed

Do not directly associate good logistics systems with low costs

Country LPI Rank

South Africa 24Malaysia 27Chile 32Turkey 34Hungary 35Czech Republic 38Poland 40Latvia 42Argentina 45Estonia 47

TOP 10 COUNTRIES

LOWER MIDDLE INCOME

Country LPI Rank

China 30Thailand 31Indonesia 43Jordan 52Bulgaria 55Peru 59Tunisia 60Brazil 61Philippines 65El Salvador 66

TOP 10 COUNTRIES

LOW INCOME

Country LPI Rank

India 39Vietnam 53Sao Tome and Principe 57Guinea 62Sudan 64Mauritania 67Pakistan 68Kenya 76Gambia, The 77Cambodia 81

TOP 10 COUNTRIES

UPPER MIDDLE INCOME

LPI Ranks

Key Policy Implications

Expand the traditional reform agenda beyond customs reform and infrastructure development

Embark on comprehensive reform—value chain approach

Need for broad public and private support: there should be quick wins

Tailor reform to the each country’s circumstances

New survey: Mayfirst results in May-June 2009

New improved questionnaire

inclusion of a Customs module

Assessment of changes in logistics performance will be possible

Changes in logistics performance

Logistics reform in Indonesia The Government of Indonesia prepared a

logistics blueprint and action plan LPI helped to identify and quantify

bottlenecks (weakest link) Choke points identified (e.g.Cikarang –

Tanjung Priok) Collaboration with the Thai logistics council Grand strategy versus quick wins

SME and logistics Small amounts, can afford poor transport

services only, poor service providers Less than one container loads 60 percent of Indonesian SME exports do not

arrive at their final destination on time and/or with agreed quality

How to solve this problem: any role to play for the government?

SME and logistics - clusters Standardization – learning by seeing Easier to export full container loads Easier to involve (foreign) buyers in handling

the export trade process

Contact Us

www.worldbank.org/lpiwww.worldbank.org/trade

www.worldbank.org/tradefacilitation www.worldbank.org/tradelogistics

Washington Office1818 H Street NW

Washington DC 20433

Contact: [email protected]

The World Bank GroupInternational Trade Department