The Urgency of a National Logistics System Law

As an archipelagic nation, Indonesia is an anomaly. It possesses abundant natural resources, yet its logistics costs are the highest in ASEAN, reaching between 14.2% and 23% of GDP — nearly three times the average of its neighbours. This figure far exceeds Malaysia and Thailand, let alone Singapore. High logistics costs have a domino effect that not only burdens businesses but also drives up the price of goods and weakens the competitiveness of Indonesian products in the global market.

Since the World Bank last released Indonesia’s Logistics Performance Index (LPI) in 2023 — placing Indonesia 63rd out of 139 countries with a composite score of 3.0, below the target score of 3.50 set in the 2020–2024 RPJMN — the tangled threads of the logistics supply chain have yet to be unravelled.

Uneven infrastructure, inefficient supply chains, and expensive transport and bureaucratic costs are recurring problems with a direct impact on the competitiveness of domestic goods. The situation is compounded by rogue officials who frequently engage in manipulative practices. The case of rogue Customs officers at Tanjung Emas Port in Semarang extorting importers is merely the tip of the iceberg of similar practices across various regions.

This situation was in fact outlined in the Annex to Presidential Regulation Number 26 of 2012 on the Blueprint for National Logistics Development, which identified five main problems: low levels of infrastructure provision, both in quantity and quality; rampant unofficial levies and transaction costs that create a high-cost economy; lengthy export-import service times and operational obstacles at ports; limited capacity and service networks of national logistics providers; and recurring stock shortages and price fluctuations.

Although Indonesia launched the National Logistics Ecosystem (NLE) through Presidential Instruction Number 5 of 2020, a number of national logistics supply chain problems remain unresolved, particularly the persistently high logistics costs. The NLE was established to improve national logistics efficiency through a digital ecosystem by aligning the flow of goods and documents (international and domestic) and connecting government systems with the private sector. The programme aims to reduce logistics costs, speed up service times and support logistics reform.

However, the NLE has not been able to address infrastructure inequality between regions, dependence on manual systems, or the lack of data synchronisation between government agencies and private parties. On regional infrastructure, for example, according to Ministry of Finance data, the logistics supply chain is heavily concentrated on the islands of Java and Sumatra — with 60% of goods movement centred in Java and 20% in Sumatra, while the remainder is spread across Kalimantan, Sulawesi, Maluku and Papua. A figure that shows just how unequal our logistics distribution is. It is no surprise that the price of goods — particularly food — outside Java and Sumatra, especially in Maluku and Papua, is extremely high.

One cause of this is the highly ‘Java-centric’ logistics industry. Java contributes 57.7% of national GDP, while Sumatra contributes 21.85%. Jakarta alone records more than 7 million shipments every day. In the context of fairness and a balance of production and distribution, the other islands lag far behind. This contradicts the spirit of Article 33 paragraph (4) of the 1945 Constitution, which mandates that the national economy be organised based on economic democracy with the principles of togetherness, efficiency with fairness, sustainability, environmental insight, independence, and by maintaining the balance of progress and the unity of the national economy.

The main challenge in the National Logistics System (Sislognas) is how to create efficient logistics costs and a resilient supply chain to improve Indonesia’s competitiveness on the global stage. Therefore, as Kundori and Pranyoto (2023) argue, an effective and efficient Sislognas is believed capable of integrating land and sea into a single, sovereign whole. The logistics system also plays a strategic role in synchronising and aligning progress between economic sectors and between regions, to achieve inclusive economic growth while serving as a bulwark for national economic sovereignty and resilience.

In the framework of law and policy, the complexity of the national logistics system cannot be regulated merely through a Presidential Regulation. Moreover, Presidential Regulation Number 26 of 2012 was a follow-up to the temporary 2005–2025 RPJMN. A higher and more comprehensive legal framework is needed in the form of a law as the umbrella legal basis for Sislognas. Such a law would integrate sectoral logistics issues such as customs, warehousing, road transport, shipping, railways and other sectoral services. It is important to note that disharmonious policy fragmentation has been the main trigger of dissonance within the Sislognas ecosystem.

Logistics issues have received little attention in the National Legislation Programme (Prolegnas). Compare this with the electoral regime, which routinely sees changes to its legislation even though elections are held only once every five years. Meanwhile, logistics is a daily activity affecting the livelihoods of many, with interconnected chains, and therefore requires a robust legal framework. Regulating logistics solely through sectoral policies actually triggers disharmony in implementation.

The government and the House of Representatives (DPR) need to pay close attention to this. As a manifestation of the concept of a rule-of-law state and popular sovereignty, the government and DPR should promptly draft a Sislognas law. This legislation is vital to guarantee the smooth flow of goods in the logistics supply chain, reduce high costs, and enhance national economic competitiveness. A law-level regulation would also provide legal certainty, encourage efficiency, and create integrated inter-regional transport policies.

Most important is strengthening the role of the state as regulator and supervisor of the logistics supply chain. The state must not surrender the logistics system to the law of the market, which is often uncompetitive and manipulative. Ignoring the legal dimension of this ‘nervous system’ of the economy means allowing the logistics system to run wild without strict regulation and oversight. Therefore, the presence of regulation binding the logistics supply chain within a single law is an absolute necessity.

Zulkifli Aspan. Lecturer (civil servant) at the Faculty of Law, Hasanuddin University, Chair of the Association of Teachers of State Administrative Law and Constitutional Law (APHTN-HAN) for South Sulawesi.