Trade and Transportation Cost

I just want to share some interesting picture and graph about trade and transportation cost

As we can see in the picture, there are massive trade in Asia, and it is still growing until now. As for the moment, I think the total throughput of all of the port in Indonesia is still nothing compared to the number of container trade in Asia itself. I hope we can take more benefit from this condition when the Kalibaru project and the Pendulum Nusantara project is complete.

I believe that Indonesia will outperform Singapore someday in term of container throughput. Port of Singapore is rely on foreland area, which mean that most of their container is a transshipment container that can easily move to another port. Different from Singapore, Indonesia is having their own hinterland area so they do not have to worried about loosing cargo. As long as the trade in their hinterland is growing, the container throughput will follow.

I also have a faith in Indonesian port to reduce transportation cost. As we all know that all the price in Papua is very high compared to Java due to its high logistic cost. There is an interesting picture about the development of transportation cost in the world.

As we can see, developing countries pay at least 50% more for the transport of their imports than developed countries. This is due to :
1. Distance from markets
2. Connectivity to liner networks
3. Port efficiency and management practices
4. Land transport infrastructure
5. Customs procedures
6. ICT adoption and e-commerce
7. Logistics and supply chain management
8. Integration of small medium enterprises in the global economy
In my opinion, Indonesia port is still in a process to improve point 2, 3, 6, and 7 at the moment. I hope the government will follow soon by improving point 1, 4, 5, and 8.

Based on DHL Global Connectedness Index 2012, Indonesia is in rank 105, far behind Netherlands in rank 1. Port performance is one of the reason why this can be happen. I hope Indonesia can learn fast enough so we can be in the same level with Netherlands in term of port and logistic performance.