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Indonesian government plans to use railway to cut logistic costMonday, November 24, 2014 > 09:12:36
The government plans to use railway transport service for the distribution of essential goods to cut logistic cost.
Logistic cost has been the main factor behind the prices of essential goods soaring high in the consumers market, Trade Minister Rachmat Gobel said here on Friday.
He said logistic cost in Indonesia is among the highest in ASEAN around 20 to 30 percent of the countrys Gross Domestic Product.
Based on Logistics Performance Index 2014 of the World Bank, the Indonesian logistic performance was the 53th in the world as against Singapore the fifth, Malaysia the 25th, Thailand the 35th and Vietnam the 48th, he said.
Gobel said he would discuss the matter with the transport minister how best to utilize the railway transport which would be faster and more cost efficient.
He said the plan would certainly need supporting facilities such as warehouses for storage in railway stations.
"The plan has to be running in 2015," he asked.
He said currently cost of distribution of essential goods is too high around 17-20 percent of price.
Therefore, the trade ministry would seriously study the possibility of utilizing the railway transport for farm products to the consumers market, he said.
"The transport cost is too high around 17 to 20 percent not to mention delay in the transport because of traffic jams that would need extra cost," he said.