The Indonesia’s logistics industry has long had a major problem. The biggest issue is that the cost of transporting goods from one city to another city is an extremely cumbersome and expensive process. Dwell time at ports, time taken to trucks to reach cities are so long and expensive that 23 percent of spending on the Gross Domestic Product (GDP) is allocated to the logistics industry. As such, the government has been trying to as many things as it possibly can in order to reduce the cost.
Most recently, the Indonesian government has announced a plan to relax its policy on imported products. In this article, we would be exploring the new initiative taken in a bid to reduce the cost of transporting goods into Indonesia. For more articles related to import, export as well as the Indonesian logistics industry, feel free to click here. We write at least one article each day.
Reducing The Dwell Time at Ports
The Indonesia Government has recently announced a plan to reduce the number of prohibited goods as well as restricted goods that enter the country. According to Coordinating Economic Minister Darmin Nasution, the simplification of the process through cutting the number of restricted and prohibited imports is part of the 15th economic policy package to improve logistics services and also to cut logistics costs in the archipelago nation.
Mr Darmin also added that a single ministry would oversee the regulation of importing certain products instead of having several government institutions.
What the Indonesian authorities are trying to do now is to cut the 49 percent of 10,826 Harmonised Codes (HS Code) to only about 19 percent listed in the Custom Traffic Book (BTKI).
On the other hand, Customs and Excise Director Mr Heru Pambudi said that some goods could be possibly verified outside of ports by implementing a post-border control system. This would make it easier to reduce the number to only 19 percent of HS Codes
Ultimately, having a shorter list of restricted and prohibited products would speed up the time taken time to improt products into Indonesia as it would improve the pre-custom clearance of good that is presently responsible for causing dwell times at sea ports.
What is the 15th economic package?
The 15th economic package was launched to address four issues- the role of transportation insurance, costs faced by logistic service providers, Indonesia National Single Window (INSW) authority and the number of prohibited and restricted goods. As such, the ease of importing to Indonesia is part of the Government’s plan as stated in the 15th economic package.
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