Green logistics strategy to control inflation

Hybridising diesel fleets with electric vehicles offers a realistic solution for Indonesia. Beyond supporting the transport sector’s decarbonisation targets, this approach strengthens food supply chain resilience and improves distribution efficiency.

Jakarta (ANTARA) - Food inflation remains a recurring challenge in the Indonesian economy. Every time the price of chillies, shallots, rice or various horticultural commodities spikes, public attention almost always turns to falling production or weather disruptions that scramble planting patterns and seasons.

Yet the problem that often escapes the spotlight actually lies in the distribution chain. Commodities are in fact available in production centres, but the cost of delivering them to major markets keeps rising due to high logistics expenses.

This phenomenon shows that food price stability is determined not only by the adequacy of supply, but also by how efficiently food moves from production centres to people’s dining tables.

Therefore, efforts to reduce distribution costs are an inseparable part of the strategy to control food inflation. With logistics costs estimated to account for 20 to 40 per cent of the retail price of certain commodities, every improvement in transport efficiency will have a direct impact on efforts to stabilise food prices at the consumer level.

It is in this context that the electrification of logistics fleets presents new opportunities. To date, electric vehicles have largely been positioned as part of the energy transition and carbon emission reduction agenda. Yet their economic benefits are far broader, including creating a more stable logistics cost structure.

A study by the Institute for Essential Services Reform (IESR) shows that in the long term, the full use of electric trucks can reduce energy costs by up to 78 per cent compared to diesel vehicles. This efficiency comes from lower energy consumption and simpler maintenance requirements. With reduced dependence on fuel (BBM) price fluctuations, food distribution costs become more controllable.

This means electric vehicles not only produce cleaner air, but also have the potential to strengthen food price stability through lower logistics costs.

Nevertheless, electrification should not be understood as an outright replacement of diesel fleets. A more realistic approach can be built through a hybrid logistics system that leverages the strengths of both technologies.

Diesel trucks would continue to handle intercity and long-distance distribution requiring high range, while electric trucks focus on urban distribution or last-mile delivery. A hub-and-spoke model enables cargo to be transferred at distribution centres before goods are shipped to markets using electric fleets.

This strategy also mitigates constraints such as limited driving range and battery charging times, while maximising operational efficiency.

However, it must be acknowledged that there are other aspects to operating electric vehicles, one of which is the issue of higher per-kilometre tyre costs compared to conventional vehicles. Several companies have introduced newer tyre technologies (low rolling resistance) to address this.