Fix the Transport Ecosystem First, Then Talk About Zero Overloading

The implementation of the Zero Over Dimension Over Loading (ODOL) policy in January 2027 is drawing closer. A major question still looms: how ready are logistics and industrial businesses to comply with this regulation? Not only that, the readiness of the ecosystem before the policy is fully enforced is also frequently questioned. For logistics and industrial players, support for Zero ODOL is not the main issue. Generally, they support the government’s intention to improve transport safety and maintain the quality of road infrastructure. “From a safety perspective, we agree that this must be regulated,” said Mahendra Rianto, Chairman of the Indonesian Logistics Association (ALI). However, the concern lies with the readiness of the supporting ecosystem before the policy is fully implemented. A number of business players assess that various supporting prerequisites are not yet fully available, ranging from high logistics costs, toll tariffs, and illegal levies, to the lack of technical certainty regarding the applicable load limits. Therefore, despite supporting the policy’s objectives, Mahendra believes that readiness for Zero ODOL has not been fully established. According to him, there are at least five issues the government needs to resolve before the regulation is enforced. The first issue is law enforcement and road safety aspects. He noted that many unroadworthy vehicles continue to operate due to weak supervision. In many cases, sanctions are only imposed on the driver, while the vehicle owner or the cargo owner who forces overloading remains untouched by law enforcement. “Currently, everything is burdened on the driver. In fact, the driver drives because they are forced to. If they don’t drive, they don’t get paid. That is mostly the model. It’s different if the company is settled and pays a monthly salary; usually, they are more orderly,” Mahendra said. Likewise, cargo owners should understand not to force drivers to load beyond the truck’s capacity. “Who reprimands the cargo owner? No one reprimands them. If there is an accident because it’s too heavy or whatever, there is no warning for the cargo owner.” He added that some multinational companies have a policy that if a truck is not roadworthy, it cannot enter the warehouse. “Now, that is correct. But not all do it. Why isn’t the ecosystem prepared first so that large trucks can operate? If ODOL is to be implemented, sort out the safety matters first,” he said. Second, there is a need to map the industrial sectors potentially affected. Load restrictions will mean the same volume of goods must be transported by more vehicles. Consequently, transport costs will increase. “If previously a 100-tonne load was carried by four trucks, with this ODOL policy it might require five trucks because the capacity will be limited to only 20 tonnes. This means it will impact operational costs,” he said. This cost increase could pressure industries highly sensitive to logistics costs, such as the food and beverage sector, building materials, and various other manufacturing industries. If distribution costs rise, companies will ultimately pass the additional costs onto product selling prices. Mahendra said the government should carefully calculate the potential economic impact before fully implementing the policy. “The government should check which industries will be affected when ODOL is implemented, because they will be sensitive to transport prices. When capacity is reduced, transport prices rise. Which industries are sensitive? The government, in my opinion, must check this,” he said. Mahendra stated that if the cost increase is ultimately passed on to consumers, he doubts consumers will be able to afford the products. “If consumers cannot buy at the increased price, won’t they go bankrupt? They will go bankrupt,” he said, illustrating the worst-case scenario where companies end up bankrupt due to this cost increase. According to him, if bankruptcy results in losses for companies or industries, a new problem will arise: unemployment. Third, it relates to financing support for transport business players. The implementation of Zero ODOL will force entrepreneurs to replace or renew their fleets to comply with the new regulations. Amid a still challenging economic climate, investing in a new fleet is not an easy matter. Therefore, Mahendra proposed a low-interest credit scheme or financing incentives that could help transport companies modernise their vehicles. Such support, he said, could be a solution so that the transition process does not lead to a decline in the number of business players or layoffs. Fourth, the practice of illegal levies is still found on a number of goods distribution routes. For logistics companies, illegal levies are a cost component that is difficult to avoid, especially when vehicles travel on arterial roads. Eradicating illegal levies must be part of the reform agenda before Zero ODOL is implemented. The fifth issue is the high toll road tariffs for logistics vehicles. Mahendra gave an example, the toll fare for a Jakarta-Surabaya truck trip reaches around Rp 1.5 million for a single journey. This amount is equivalent to about 15 per cent of the total transport tariff received by the entrepreneur. “The Jakarta-Surabaya tariff for a 15–20 tonne truck is a maximum of Rp 10 million. So, Rp 1.5 million against Rp 10 million is 15 per cent. How can the toll cost be 15 per cent of the tariff? That’s not including fuel or the driver’s fee,” he said. ALI had previously submitted its suggestion to the Toll Road Regulatory Agency (BPJT) so that tariffs for logistics could be cheaper. However, truck drivers were given the choice of whether to use the toll road or arterial roads. “Fine then, we choose the arterial road.” In fact, toll roads were built to speed up goods distribution and improve logistics efficiency. Mahendra believes the government needs to consider tariff incentives.