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ASEAN German Technical Cooperation | Transport and Climate Change Transport and

Climate Change

Towards Green Freight and Logistics in


IndonesiaTowards Green Freight and Logistics in
Indonesia
White PaperWhite Paper
Acknowledgements
The authors and the Transport and Climate
Change project team would like to express their
sincere appreciation to the Research and
Development Agency, Ministry of Transport for
Disclaimer the support and guidance: Ir. Sugihardjo MSi,
Ir. Umiyatun Hayati Triastuti MSc, Dr. Ir. Agus
Findings, interpretations and conclusions
Santoso MSc, Dr. Elly Sinaga, Ir. Sugiadi
expressed in this document are based on
Waluyo ME, Ir. Imran Rasyid MBA, Ir. Zulfikri
information gathered by GIZ and its
MSc DEA, Ir. Mutharuddin MSi MMTr, Sri
consultants, partners and contributors.
Hapsari Winahyu and the following experts who
GIZ does not, however, guarantee the accuracy contributed invaluable support and inputs to the
or completeness of information in this completion of this report: Sudhir Gota and
document, and cannot be held responsible for Stefan Bakker (Consultants), Martin Schmied
any errors, omissions or losses which emerge (INFRAS), Stefan Schablinski (DHL) and Tali
from its use. Trigg, Roland Haas and Rico Krüger (GIZ).
Towards Green Freight and Logistics in
IndonesiaTowards Green Freight and Logistics in
Indonesia
White PaperWhite Paper

Friedel Sehlleier
Karmini
Monica Kappiantari
Aditya Mahalana
Joko Purwanto
SetijadiFriedel Sehlleier
Karmini

TCC’s regional activities are in the area of fuel


The Project Context efficiency, strategy development, green freight,
The GIZ project ‘Energy Efficiency and and Nationally Appropriate Mitigation Actions
Climate Change Mitigation in the Land in the transport sector. At the national level the
Transport Sector in the ASEAN region’ project supports relevant transport and
(Transport and Climate Change (TCC) environment government bodies in the
www.TransportandClimateChange.org) aims to Philippines, Thailand, Vietnam, Malaysia and
develop strategies and action plans for more Indonesia, for the development of national
sustainable transport. action plans and improvement of policy
monitoring systems. The project is funded by
the German Federal Ministry for Economic
Cooperation and Development.
Monica Kappiantari
Aditya Mahalana
Joko Purwanto
Setijadi
Table of Contents
1. Introduction ............................................................................................................... 8
1.1. Background ............................................................................................................................. 8
1.2. Vision, Objectives and Scope of the White Paper ............................................................ 9
1.3. Indonesia Country Profile ..................................................................................................10
2. Freight and Logistics in Indonesia .......................................................................... 14
2.1. Logistics Performance and Challenges .............................................................................14
2.2. Energy Consumption and CO2 Emissions ......................................................................17
2.3. Air Pollution .........................................................................................................................20
2.4. Transport Infrastructure .....................................................................................................21
2.5. Modal Split ................................................................................................................... 232324
3. Policies and Stakeholders ........................................................................................ 27
3.1. Stakeholders..........................................................................................................................27
3.2. Policies and Initiatives.........................................................................................................29
4. Road Freight Sector Assessment ............................................................................. 33
5. Recommendations for Greener Freight and Logistics in Indonesia ...................... 39
References ..................................................................................................................... 2
Annex 1: Rail, Seaport, Airport and Inland Waterway Infrastructure ........................... 5
Annex 2: Intermodal Connectivity Improvement ........................................................ 11
Annex 3: Online Freight Exchange ............................................................................. 12
Annex 4: Improving Urban Freight ...................................................................... 151514
Annex 5: Freight Database and Indicators ........................................................... 171716
List of Tables
Table 1: LPI Rank 2012-2016 (Source: World Bank, 2016) ....................................................................... 14
Table 2: Value of Trade Flows between and within Islands in Indonesia in Billion Rupiah (Source:
Firdaus and Widyasanti, 2010) ......................................................................................................................... 16
Table 3: Estimates of Transport Sector Energy Demand in Indonesia (Source: RUEN, 2017; IEO,
2016; APEC, 2016) ............................................................................................................................................ 17
Table 4: Transport CO2 Emissions in Indonesia (Source: IEA data) ...................................................... 19
Table 5: Indonesia Road Network in 2009 (Source: DFAT, 2013) .................................................. 222223
Table 6: Freight Volume Production by Island and Mode (Source: MoT, 2006) ................................... 24
Table 7: Stakeholders in Green Freight and Logistics in Indonesia (Source: Authors) ......................... 27
Table 8: Policies Related to Freight and Logistics (Source: Authors) ....................................................... 29
Table 9: Initiatives by Stakeholders (Source: Authors) ................................................................................ 31
Table 10: Age of Truck Fleet at Port of Tanjung Priok (Source: Ministry of Trade) ............................. 35
Table 11: Recommendations (Source: Authors) ............................................................................................ 1
Table 12: Avoid – Shift – Improve Strategies Applicable for Urban Freight (Source: Authors) 151514
Table 13: National Freight Data vs. Freight Performance Indicators (Source: Authors) ............. 171716

1
List of Figures
Figure 1: Indonesia Demand, Output and Prices (Source: OECD, 2016a) ............................................. 16
Figure 2: Transport Energy Demand by Transport Mode in Indonesia (Source: Based on data from
IEO 2016) ........................................................................................................................................................... 18
Figure 3: Indonesia Domestic Transport Sector Final Energy Demand, 2000-2040 (Source: APEC,
2016) .................................................................................................................................................................... 19
Figure 4: Light- and Heavy-duty Tailpipe Emissions and Fuel Sulphur Standards, G20 (Source:
Kodjak, 2015) ............................................................................................................................................ 212021
Figure 5: Transport Infrastructure Investment (Source: PwC, 2016 based on Oxford Economics)212122
Figure 6: Indonesia Road Network Length (in km) by Road Class (Source: BPS, 2016) ............. 232324
Figure 7: Modal Share Analysis for Indonesia (Source: INDII, 2017) ..................................................... 25
Figure 8: Breakdown of Indonesia Logistics Costs (Source: Martalia, 2016)........................................... 26
Figure 9: Annual Road Freight Vehicle Sales by Vehicle Type 2005-2016 (Source: Authors, based on
GAIKINDO, 2016) .......................................................................................................................................... 33
Figure 10: Rail Freight in Indonesia, in thousand tonnes (Source: BPS, 2015) ......................................... 6
Figure 11: Investment for Ferry and Inland Waterways 2015-2019 (Source: Leung, 2016) .................. 10
Figure 12: Important Elements of Green Freight Intermodal Policy (Source: Authors) ..................... 11
Figure 13: Online Freight Exchange (Source: Authors) .............................................................................. 13

2
Executive Summary
Indonesia, with a population of over 257 million, is the fourth most populous country in the
world and the largest member state of the Association of Southeast Asian Nations
(ASEAN). Indonesia’s per capita Gross Domestic Product (GDP) grew at 5% in 2016,
outpacing global and ASEAN regional averages. The transport and logistics sector has been
one of the fastest growing sectors of the Indonesian economy and will remain to receive a
priority status due to its vital role to support the country’s development
Indonesia’s rank in the global Logistics Performance Index (LPI) of the World Bank
significantly improved from 63rd in 2014 to 46rd place in 2018, as the government started to
address shortfalls in infrastructure and logistic competence. With that Indonesia is among
the top performing lower-middle income countries. Compared to regional peers, however,
Indonesia still ranks below Malaysia, Thailand, India and Vietnam which in fact overtook
Indonesia in the latest LPI report.1 Logistics costs in Indonesia have been estimated at up to
27% of GDP in 2013, higher than regional peers Vietnam (25%), Thailand (20%), Malaysia
(13%) and Singapore (9.8%).
The transport sector accounted for 28% of Indonesia’s energy demand and for 21% of the
energy-related carbon dioxide (CO2) emissions in 2012. Freight transport makes up 28% of
the transport energy consumption which highlights the need for green freight and logistics
in Indonesia. Green freight and logistics policies and programmes support environmentally-
friendly economic development, with many societal co-benefits.
A look into current government strategies for transport, energy efficiency, logistics and
climate change exposes that Indonesia has not yet given green freight the political
importance that the topic deserves according to its footprint on fuel consumption and
carbon emissions. Therefore, this White Paper promotes the following vision: ‘The
implementation of green freight and logistics policies and measures improves the efficiency
of Indonesia’s freight and logistics system and contributes to Indonesia’s climate change
mitigation and energy efficiency goals’.2
This White Paper offers eight primary recommendations (ranked from 1st to 8th to reflect its
priorities), including proposed foreseeable timeline of implementation and key agencies to
implement them, that are intended to support the MoT in improving national regulations
towards a freight transport sector that enables continued economic development while
incorporating adequate environmental protections.
Despite the economic importance of fuel consumption and its relationship to GHG
emissions, those emissions are at present neither estimated nor reported for the heavy
commercial vehicle (HCV) and light commercial vehicle (LCV) fleets. This knowledge gap
reduces market transparency and constrains the entry of energy efficient, lower-emission
technologies and practices into the market. Therefore, Recommendation A is to improve

1 http://www.worldbank.org/en/news/feature/2018/07/24/from-parts-to-products-why-trade-logistics-matterl, accessed
on 21 August 2018
2 The vision was developed at a workshop on Green Freight and Logistics conducted by R&D MoT and GIZ in August

2015.

3
data monitoring and reporting frameworks, as addressing this knowledge gap is an important
foundation for market transparency and the development of increasingly ambitious
measures.
It is also critical to recognise the importance of vehicle fleets themselves and address their
operational inefficiencies. The White Paper includes four recommendations concerning
efficiency – specifically, to improve the efficiency of HCVs (1st priority); improve
operational efficiency and performance of urban freight(3rd priority), reduce empty truck and
container trips (4th priority), and encourage consolidation within the trucking industry (5th
priority).; and
In order to build sectoral capacity and guide both public and private sector stakeholders
towards cleaner and more efficient freight transport and logistics, one recommendation is
included to establish public-private partnerships (PPPs) through a green freight programme
(7th priority).
one other recommendation is included to enhance intermodal freight transport connectivity
(2nd priority) in order to gradually shift freight transport from roads to other modes.
Intermodal connectivity is a key part of making the broader transport and logistics system
more efficient and cleaner by reducing overall fuel consumption and consequent emissions.
Finally, one recommendation is included to urge for participation in international and
regional green freight activities and initiatives (8th priority), which can also support national
and local capacity to develop and implement green freight and logistics policies and
activities.
Putting these eight recommendations into practice will support Indonesia’s continued
sustainable development and a more environmentally friendly freight sector. But
government action alone is insufficient; private sector commitment to green freight is also
necessary for broad success in achieving Indonesia’s climate change and energy efficiency
goals. In implementing activities in support of the recommendations above, government
policies should strive to be ‘technology neutral’ when possible, providing flexibility to the
freight industry to decide what solutions work best for each operator. And in order to spur
effective implementation, the MoT should consolidate measures that promote green freight
and logistics under an umbrella regulation. The Ministerial Regulation No. 69/1993
concerning Road Freight Transport and Amendment No. 30/2002 can be improved to
implement Law No. 22/2009 concerning Land Traffic and Transport and Government
Regulation (PP) and Law No. 74/2014 concerning Land Transport, as well as to support the
achievement of the MoT Strategic Plan (RENSTRA) 2015-2019.

4
Abbreviations and Acronyms
ADB : Asian Development Bank
AFOLU : Agriculture, Forestry and Other Land Use
ALFI : Asosiasi Logistik dan Forwarder Indonesia / Indonesia Logistics and
Forwarders Association
ALI : Asosiasi Logistik Indonesia / Indonesia Logistics Association
APBMI : Asosiasi Pekerja Bongkar Muat Indonesia / Indonesia Stevedoring
Association
APBN : Anggaran Pendapatan dan Belanja Negara / National State Budget
APBN-P : Anggaran Pendapatan dan Belanja Negara – Perubahan / Revised National
State Budget
APTRINDO : Asosiasi Pengusaha Truk Indonesia / Indonesia Trucking Association
ASDEKI : Asosiasi Depo Kontainer Indonesia/ Indonesia Container Freight Station /
CFS Association
ASEAN : Association of Southeast Asian Nations
ASPERINDO : Asosiasi Perusahaan Jasa Pengiriman Ekspres Indonesia / Indonesia Courier
Service Companies Association
BAPPENAS : Badan Perencanaan Pembangunan Nasional / National Development
Planning Agency
BAU : Business As Usual
BBN : Bea Balik Nama / Transfer Tax
BMZ : Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung /
Federal Ministry for Economic Cooperation and Development
BUR : Biennial Update Report
CAA : Clean Air Asia
CBU : Complete Built-Up
CCAC : Climate and Clean Air Coalition
CKD : Complete Knock-Down
CO2 : Carbon Dioxide
DAU : Dana Alokasi Umum / General Allocation Fund
DBH : Dana Bagi Hasil / Revenue Sharing Fund
DEN : Dewan Energi Nasional / National Energy Council
DNPI : Dewan Nasional Perubahan Iklim / National Council on Climate Change
GAIKINDO : Gabungan Industri Kendaraan Bermotor Indonesia / Association of
Indonesian Automotive Industries
GAPASDAP : Gabungan Pengusaha Angkutan Sungai, Danau dan Penyeberangan / Inland
Waterways and Ro-Ro Operators Association

5
GCI : Global Competitiveness Index
GDP : Gross Domestic Product
GHG : Greenhouse Gas
GIZ : Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH / German
Corporation for International Cooperation GmbH
GtCO2eq : Gigatonnes of CO2 Equivalent
GVW : Gross Vehicle Weight
HCV : Heavy Commercial Vehicle
ICCSR : Indonesia Climate Change Sectoral Roadmap
IEO : Indonesia Energy Outlook
IIA : Infrastructure Investment Agency
IIGF : Indonesia Infrastructure Guarantee Fund
INACA : Indonesian Air Carrier Association
INDC : Intended Nationally Determined Contribution
INSA : Indonesia National Shipowners Association
KAI : Kereta Api Indonesia / Indonesia State Railways
LCV : Light Commercial Vehicle
LPI : Logistics Performance Index
LULUCF : Land Use, Land Use Change and Forestry
MLI : Masyarakat Logistik Indonesia / Indonesia Logistics Society
MoEF : Ministry of Environment and Forestry
MoT : Ministry of Transportation
MP3EI : Masterplan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia /
Masterplan for Acceleration and Expansion of Indonesia’s Economic
Development
MRV : Monitoring, Reporting and Verification
MtCO2eq : Megatonnes of Carbon Dioxide Equivalent
MTI : Masyarakat Transportasi Indonesia / Indonesia Transport Society
Mtoe : Megatonnes of Oil Equivalent
NDC : Nationally Determined Contribution
NRE : New and Renewable Energy
O-D : Origin-Destination
OECD : Organisation for Economic Co-operation and Development
ORGANDA : Organisasi Angkutan Darat / Land Transport Organisation
PELINDO : Pelabuhan Indonesia / Indonesia Port Corporation
PP : Peraturan Pemerintah / Government Regulation

6
PPN : Pajak Pertambahan Nilai / Value Added Tax
PPP : Public-Private Partnership
RAN-GRK : Rencana Aksi Nasional Penurunan Emisi Gas Rumah Kaca / National
Action Plan on Greenhouse Gas Emission Reduction
RENSTRA : Rencana Strategis / Strategic Plan
RIPNAS : Rencana Induk Perkeretaapian Nasional / Masterplan for National
Railways
RPJMN : Rencana Pembangunan Jangka Menengah Nasional / National Mid-term
Development Plan
RPJPN : Rencana Pembangunan Jangka Panjang Nasional / National Long-term
Development Plan
RUEN : Rencana Umum Energi Nasional / National Energy Plan
SISLOGNAS : Sistem Logistik Nasional / National Logistics System
SMI : Sarana Multi Infrastructure
SOE : State-Owned Enterprise
TEU : Twenty-foot Equivalent Unit
TKM : Tonne-Kilometres
TTW : Tank-to-Wheel
UNCRD : United Nations Centre for Regional Development
UNFCCC : United Nations Framework Convention on Climate Change
VKT : Vehicle Kilometres Travelled

7
1. Introduction

1.1. Background
The freight sector plays a significant role in transport sector energy consumption and
emissions of GHGs and pollutants, both in Indonesia and across Asia. Nevertheless, the
freight sector’s footprint so far receives comparatively low attention in Indonesia’s national
plans and policies for energy efficiency, climate change and transport.
Taking action to reduce energy consumption and GHG emissions from the transport and
logistics sector is critical for meeting Indonesia’s targets on climate and energy efficiency and
at the same time reduce the high logistic cost which affect Indonesia’s economic progress.
As the sector expands, sustainable development aspects need to be integrated into freight
and logistic planning in order to minimise the risk of being ‘locked in’ to a high-carbon
freight transport system.

Green Freight and Logistics Concept


Definitions of green freight and logistics emphasise the three dimensions of sustainable
development: i.e. environmental, social and economic sustainability. Generally, green freight
aims at helping countries and businesses to develop economically while decoupling that
development from negative environmental impacts and while improving people’s quality of
life. Governments, the private sector and other stakeholders have roles to play in
establishing and running green freight policies and programmes. Therefore, close
cooperation between these stakeholders is a hallmark of green freight initiatives.

What is green freight and logistics?


 A set of strategies, policies, practices and standards;
 Targeted at the movement of goods via road, rail, marine, inland waterways and air;
 Aiming to:
– reduce the environmental, climate and public health impacts through reduced air pollution
and greenhouse gas emission intensity;
– improve social conditions, including road safety, and health and working conditions of
people involved in freight movement; and
– enhance economic development through improved energy efficiency, fuel security, and
efficiency and competitiveness of the freight and logistics sector overall;
 Developed and implemented by government, the private sector and other stakeholder
groups jointly or individually.

(UNCRD, 2014)

8
Green freight and logistics can be achieved through a range of measures to avoid
unnecessary trips; to shift towards more environment-friendly transport modes; and to
improve the energy efficiency of road transport vehicles through operational and
technological enhancements
While plans and policy blueprints like the National Mid-term Development Plan (RPJMN)
2015-2019, the Blueprint on the Development of a National Logistics System
(SISLOGNAS), the Strategic Plan (RENSTRA) of the Ministry of Transport 2015-2019 and
the National Energy Plan (RUEN) approach the issues of climate change and energy
efficiency in various ways, the green freight concept offers an opportunity to link these
related agendas to each other and to Indonesia’s climate commitments under the Paris
Climate Agreement.

International and Regional Drivers


With growing awareness of and interest in green freight and logistics among Member States
of the Association of Southeast Asian Nations (ASEAN) and their development partners,
Indonesia has an opportunity to capitalise on this momentum. For example, the ASEAN
Kuala Lumpur Transport Strategic Plan 2016-2025 includes several action items on green
freight and logistics that the recommended actions detailed in this White Paper can help to
achieve.
In a position paper for the United Nations Centre for Regional Development (UNCRD),
Punte et al. (2013) define three key drivers of green freight and logistics that particularly suit
the Asian context, including Indonesia:

■ Logistics costs in developing economies: Freight constitutes a significant share of


total logistics costs, which are relatively high in Asia’s emerging and developing
economies. Logistics costs as a percent of gross domestic product (GDP) varies from
around 10 to 15% in western industrialised countries, but is 24% in Indonesia3, creating
a risk of bottlenecking economic growth. More efficient freight transport and logistics
systems can reduce logistics costs.
■ Environmental and social impacts: Disproportionate environmental and social
impacts of freight transport, including fuel use, carbon dioxide (CO2) emissions, air
pollution, safety hazards and difficult working conditions.
■ Market pressures: Driven by consumer preferences, international shippers demand
greener practices from local logistics service providers.

1.2. Vision, Objectives and Scope of the White Paper


This White Paper promotes the following vision: ‘The implementation of green freight and
logistics policies and measures improves the efficiency of Indonesia’s freight and logistics

3 Meeuws et al. (2013) suggest this number could be even higher, at 27%.

9
system and contributes to Indonesia’s climate change mitigation and energy efficiency
goals’.4
This White Paper aims to provide a thorough analysis of the current state of freight
transport in Indonesia with a focus on environmental concerns. It does so by reviewing the
current policy framework and proposes measures for improving the environmental
performance of Indonesia’s freight transport system. The White Paper was developed based
on a desk review of available literature and policy documents as well as consultation
meetings with key stakeholders.
Considering that around 90% of Indonesia’s freight is carried on roads, this White Paper
focuses on road freight transport and emphasises ‘low-hanging fruit’ interventions (i.e. easy
to implement, minor barriers, shorter timespans) instead of long-term projects.
The recommendations in this White Paper are primarily aimed at supporting the MoT in
improving national regulations concerning green freight and logistics. However, the
implementation of the recommendations needs to involve all relevant stakeholders from the
public and private sector, including other key ministries, private and state-owned companies,
as well as private sector associations
The White Paper is the result from a cooperation between the Research and Development
Agency of the MoT and GIZ’s ‘Energy Efficiency and Climate Change Mitigation in the
Land Transport Sector in the ASEAN Region’ Project (in short, ‘Transport and Climate
Change’ or TCC) with funding from Germany’s Federal Ministry for Economic Cooperation
and Development (BMZ).

1.3. Indonesia Country Profile


Demography and Geography
Indonesia is an archipelago of 17,508 islands that stretch over 5,000 kilometres along the
equator. Several countries share land borders with Indonesia, i.e. Malaysia, Timor Leste and
Papua New Guinea, and several others share maritime borders, i.e. Singapore, the
Philippines and Australia. Its 261 million inhabitants in 2016 make Indonesia the fourth
most populous country in the world and the largest in ASEAN. Over half of the country’s
population lives in the Java-Bali region. The rest is spread across Sumatra, Sulawesi,
Kalimantan, Nusa Tenggara and Maluku, Papua, and approximately 6,000 other smaller
inhabited islands (ADB, 2012). Economic activity is strongly concentrated in the Java-Bali
region.

Economy
Indonesia was an oil exporter during the 1970s and 1980s, but since 2004 has been a net
importer. Indonesia was not seriously affected by the 2008-2009 global recession due to its
large domestic market and its relatively low dependence on external trade.

4The vision was developed at a workshop on Green Freight and Logistics conducted by R&D MoT and GIZ in August
2015.

10
Indonesia’s GDP grew by 5.2% in 2016 and thus exceeded the average growth (4.9%) of all
10 ASEAN countries for the period (OECD, 2016). The transport sector has been
contributing around 5% of the GDP in recent years, with growth rates of 7-8% per year
(BPS, 2017)

GHG Emissions
According to Indonesia’s most recent Biennial Update Report (BUR) to the United Nations
Framework Convention on Climate Change (UNFCCC)5, GHG emissions from Indonesia
totalled 1.45 GtCO2eq in 2012, of which one third from energy activities, i.e. from fossil fuel
combustion. Excluding land use, land use change and forestry (LULUCF) from the balance,
energy was responsible for 66.9% of 2012 GHG emissions (see figure 1 and 2 below).

Figure 1 Emission Trend without LULUCF (left) and with LULUCF (right)

5Emissions estimates vary by source. The BUR is the most recent submission by Indonesia to the UNFCCC, and contains
updated GHG emissions estimations and information on mitigation actions. Indonesia’s BUR from 2016 is available at
http://unfccc.int/resource/docs/natc/idnbur1.pdf

11
4%
6%
LULUCF (incl. peat fire)
8%
Energy

Agricuture
51%
Waste
32%
Industrial Processes and
Product Use

Figure 2 Sectoral Emission Contribution 2000-2012

Transport is a significant contributor to Indonesia’s GHG emissions, accounting for 26% of


energy-related CO2-Emissions with 131 million tCO2 (see breakdown in figure 3). On a per
capita basis, Indonesia’s transport CO2 emissions are still below the average of the G20
countries (see Figure 1Figure 4). On the other hand, Indonesia’s transport CO2 emission
have grown by 200% since 1990, which represents a much higher increase than in most
other nations of the G20 (except China).

Residential
6%
Manufacturing
industries and Fugitive from
construction Oil/Natural Gas
24% 4%
Petroleum
Transport refining
Other
3%
26% (ACM)
2%
Commercial/Instit
utional
1%
electricity and heat
production Fugitive from
34% solid fuels
0%

Figure 3 GHG Emissions from energy-related sectors in Indonesia, 2012 (source: 1st BUR)

12
Figure 4 G20 per capita transport CO2 emissions and growth (source: Agora 2018)

13
2. Freight Sector Characteristics in Indonesia

2.1. Logistics Performance and Challenges


Indonesia’s rank in the Logistics Performance Index (LPI)6 significantly improved from 63rd
in 2014 to 46rd in 2018 (Table 1Table 1Table 1). With that Indonesia is among the top
performing lower-middle income countries. Compared to regional peers, however,
Indonesia still ranks below Malaysia, Thailand, India and Vietnam which in fact overtook
Indonesia in the latest LPI.7

Table 1: ASEAN LPI Rank 2012-2018 (Source: World Bank, 2018)LPI Rank 2012-2018 (Source: World Bank,
2018)

Country 2018 2016 2014 2012

Singapore 7 5 5 1
Thailand 32 45 35 38
Vietnam 39 64 47 53
Malaysia 41 32 25 29
Indonesia 46 63 53 59
Philippines 60 71 57 52
Brunei Darussalam 80 70 n/a n/a
Lao PDR 82 152 131 109
Cambodia 98 73 83 101
Myanmar 137 113 145 129

Table 2 Indonesia's Performance in the LPI per Indicator (Source: World Bank, 2018)

Indicator 2014 2016 2018

Customs 55 69 62

Infrastructure 56 73 54

International Shipments 74 71 42

Logistics Competence 41 55 44

Tracking & Tracing 58 51 39

6 The LPI is based on surveys among international freight forwarders and measures six indicators: (1) Infrastructure to
reach or leave the ports and airports, (2) Border agencies at ports and airports, (3) Competence of domestic logistics service
providers (4) The timeliness of delivery, (5) Tracking and tracing systems for imports and exports and (6) The availability of
international shipments when needed.
7 http://www.worldbank.org/en/news/feature/2018/07/24/from-parts-to-products-why-trade-logistics-matterl, accessed

on 21 August 2018

14
Timeliness 50 61 41
Despite the recent improvement in overall logistics performance, the situation at this moment
remains that in ‘some areas of the country like the Papua Province can expect to pay two or
three times the cost in Jakarta for critical commodities like cement. Current congestion in
Java and the larger cities imposes a growing time, efficiency, and cost penalty issues for
transport users. The poor condition of many roads, caused by insufficient maintenance and
overloaded trucks, also leads to high operating costs and high incidence of accidents and
loss of life’ (ADB, 2012).

Looking beyond infrastructure, additional issues are limiting the potential performance of
the logistics sector in Indonesia (World Bank, 2013):8
■ Prevalence of illegal charges and transaction fees.
■ Poor export and import processing lead time, and bottlenecks on port services.
■ Inadequate service capacity and networks supporting national logistics providers.
■ Chronic difficulties in stocks management and price fluctuation of basic commodities.
■ High regional cost differences in staple foods and basic products for industry and
construction.
Logistics costs amounted to 23.5% of GDP in 2014, though they are expected to shrink to
19.2% by 2019 (World Bank, 2015). Logistics costs in Indonesia are higher than some
regional peers. 2013 estimates placed them at a higher figure of 27% of GDP, above
Vietnam (25%), Thailand (20%), Malaysia (13%) and Singapore (9.9%) in the same study.
For reference, the figure for the United States was 8% (Meeuws et al., 2013).
The World Bank surveyed logistics costs for manufacturing companies in five large
Indonesian cities in 2016, namely Jakarta, Surabaya, Semarang, Palembang and Makassar.
They found that average total logistics costs were 20% of sales, higher than in Thailand
(15%) and Malaysia (13%).9 These costs were broken down as follows: 17% logistics
administration, 26% inventory, 17% warehousing, and 40% transport and cargo handling
(World Bank, 2016).
Finally, it is important to remark that domestic trade has always been a strong backbone of
the Indonesian economy compared to international trade (Figure 5Figure 5Figure 5)
(OECD, 2016a).

8http://www.indonesia-investments.com/upload/documenten/world-bank-state-of-logistics-indonesia-
2013.pdf, State of Logistic Report 2013, accessed February 2016
9http://isd-indonesia.org/wp-content/uploads/2015/03/World-Bank-Henry-Sandee-Dialogue-Series-I.pdf, accessed
February 2016

15
Figure 5: Indonesia Demand, Output and PricesIndonesia Demand, Output and Prices (Source: OECD, 2016a)

Research conducted by Firdaus & Widyasanti (2010) shows some imbalances in trade flows
among Indonesian regions (Table 3Table 3Table 3). Trade within Java outstrips the trade
within and among other regions by far. The freight transport activity is similarly
concentrated on Java, making the island a key target area for green freight action. According
to the Indonesian trucking Association Apterindo (2018), trucks dominate 97% of Cargo
transportation in Java and 91.2% Cargo Transportation in Indonesia. 70% of Indonesia’s
industrial areas are on Java, of which again 70% are in the JABODETABEK metropolitan
area.

Table 3: Value of Trade Flows between and within Islands in Indonesia in Billion Rupiah (Source: Firdaus and
Widyasanti, 2010)Value of Trade Flows between and within Islands in Indonesia in Billion Rupiah (Source:
Firdaus and Widyasanti, 2010)

Sumatra Java Kalimantan Sulawesi Bali, NTB, Maluku and


NTT Papua

Sumatra 701,042.4 95,916.0 5,843.7 6,180.6 4,872.6 1,346.2


Java 144,044.5 2,470,730.4 40,192 26,624.2 18,742.2 11,538.0
Kalimantan 7,905.1 31,318.5 284,925.8 2,544.0 1,507.6 600.0
Sulawesi 1,103.9 15,791.6 1,508.7 160,577.9 669.1 372.2
Bali, NTB, 1,127.3 14,648.0 889.4 152.1 102,011.2 123.3
NTT

16
Sumatra Java Kalimantan Sulawesi Bali, NTB, Maluku and
NTT Papua

Maluku and 272.8 13,752.5 100.7 387.2 80.0 47,504.1


Papua

2.2. Energy Consumption and CO2 Emissions


The transport sector accounts for around a third of Indonesia’s energy demand today, which
makes it the second biggest energy consumer after the industrial sector. Table 4Table 4Table Formatted: GIZ: body text Char Char
3 shows energy consumption estimates from the RUEN, the Indonesia Energy Outlook Formatted: GIZ: body text Char Char
(IEO) and the APEC Energy Demand and Supply Outlook. Road transport and oil-based
fuels dominate transport energy demand compared to other modes, and to fuels like
biodiesel or gas. Heavy duty vehicles have been estimated to account for up to 46% of road
transport energy demand by APEC, which underlines the need for green freight. A detailed
breakdown of transport energy demand into different transport modes (Figure 6Figure Formatted: GIZ: body text Char Char
6Figure 6 and Figure 7 Road Transport Energy Demand by Mode in 2015 (Source: Based on data Formatted: GIZ: body text Char Char
from IEO 2016)Figure 7 Road Transport Energy Demand by Mode in 2015 (Source: Based on data
from IEO 2016)Figure 7Figure 7Figure 7) exhibits that trucks account for 23% of transport
energy demand (and 27% when only road transport modes are considered).
Table 4: Estimates of Transport Sector Energy Demand in Indonesia (Source: RUEN, 2017; IEO, 2016; APEC, 2016)

Indicator/report RUEN IEO APEC

Year of data 2014 2015 2013

Total energy demand (Mtoe) 132 129 162

Transport energy demand (Mtoe) 50 46 47

Transport energy demand, business as 90 (2030) 83 (2025) 146 (2040)


usual projection (Mtoe)
169 (2050) 228 (2050)

Transport share of total energy demand 38% 36% 29%


40% (2040)

Road transport share of total transport n.a. 88% 89%


energy demand

Freight vehicle share of total road n.a. 37% 46%


transport energy demand
36% (2040)

Share of oil-based transport fuel 95% 96% n.a.

17
passenger train
bus passenger plane 2.2%
8.6% 7.3%
passenger ship
0.0%

motorcycle
24.7%
truck
23.4%
freight 28 %

freight ship
3.9%

passenger car freight plane freight train


29.5% 0.2% 0.2%

Figure 6: Transport Energy Demand by Transport Mode in Indonesia (Source: Based on data from IEO 2016)

16
passenger car
14

12 motorcycle
truck

10
Million TOE

6
Series1, 4
4

0
passenger car motorcycle truck bus

Figure 7 Road Transport Energy Demand by Mode in 2015 (Source: Based on data from IEO 2016)

Looking ahead, strong growth in transport energy demand is projected for the future, at an average
of about 3% increase per year across the different estimates (see for example APEC’s scenario in

18
Figure 8Figure 8Figure 3). IEO, RUEN and APEC all expect that the relative share of freight will
decline over time due to even stronger energy demand growth in the passenger transport sector.
The RUEN and IEO both include alternative scenarios that reflect the potential implementation of
certain passenger and freight transport policies. For example, the IEO estimates that energy demand
from trucks could be cut by 17%-27% by 2030 compared to business as usual if policies for truck
efficiency, transport demand management and modal shift are undertaken.

Figure 8: Indonesia Domestic Transport Sector Final Energy Demand, 2000-2040 (Source: APEC, 2016)

In terms of GHG emissions, data from the International Energy Agency (Table 5) shows
that transport accounts for around 20% of Indonesia’s energy-related CO2 emissions. 85%
of these emissions are caused by road transport.
Table 5: Transport CO2 Emissions in Indonesia (Source: IEA data10)

Indicator Unit 1990 1995 2000 2005 2008

CO2 emissions from fuel combustion Mt 143 195 270 327 390

CO2 emissions from transport fuel combustion Mt 35 52 65 73 81

CO2 emissions from road transport Mt 28 42 56 63 69

How responsible is the freight and logistics sector for transport CO2 emissions? Parikesit et
al. (2014) estimate that trailers and trucks accounted for around 60% of the total TTW CO2
emissions in the transport sector in 2010. In their own BAU scenario, this share will have
already decreased to 50% in 2015 and will further shrink to around 33% in 2050. Clean Air
Asia (2012) estimates that 50% of transport CO2 emissions in 2010 were caused by HCVs
and another 9% by light commercial vehicles (LCVs). This is consistent with an estimate for
Asia by the Smart Freight Centre (2014) that trucks across Asia emit 54% of road transport
CO2 emissions. These figures are in large part a result of the high number of tonne-

10 Accessed through https://knoema.com/ITFTCO2E2010/itf-transport-co2-emissions?Location=1000580-indonesia

19
kilometres (TKM) attributable to HCVs as well as these vehicles’ typically poor fuel
efficiency.

2.3. Air Pollution


In the transport sector, air pollutant emissions occur concurrently to emissions of GHGs
from the combustion of fossil fuels. Improvements to freight efficiency, whether through
fleet upgrades or better operating practices, have the potential to reduce emissions of
harmful air pollutants such as PM and sulphur (which is primarily emitted by diesel engines
as sulphur dioxide, or SO2), among others. The Smart Freight Centre (2014) estimates about
half of Asian PM emissions come from trucks, underscoring the importance of urban freight
in achieving national and local governments’ urban air quality goals.
A comparative assessment of G20 countries’ efforts to reduce air pollutant emissions from
heavy-duty vehicles gives Indonesia’s current policy status a low rating, indicating a need to
step up national efforts (Figure 9Figure 9Figure 9). The same report also shows that
substantial societal benefits have accrued to those G20 nations that have adopted, for
example, clean fuel and vehicle policies (Kodjak, 2015).

20
Figure 9: Light- and Heavy-duty Tailpipe Emissions and Fuel Sulphur Standards, G20Light- and Heavy-duty
Tailpipe Emissions and Fuel Sulphur Standards, G20 (Source: Kodjak, 2015)

2.4. Transport Infrastructure


The current government has given increased attention to infrastructure and transport issues
(Leung, 2016). Infrastructure development for connectivity and accessibility is one of the
issues highlighted in the RPJMN 2015-2019. Total government infrastructure expenditures
in Indonesia increased by a substantial 51% from 2014 to 2015, from IDR 139trn (USD
11.7bn) to IDR 209trn (USD 15.5bn) in 2015. Total foreign direct investment in Indonesia
rose to USD 29.27bn in 2015, up 2.6% from USD 28.52bn in 2014, with mining and
transport being key destinations for investors (PwC, 2016).
In the area of transport, many projects were assigned to state-owned enterprises (SOEs), for
example (PwC, 2016):
■ Ports: Strategic maritime infrastructure projects in 45 different locations have been
assigned to PT. Pelabuhan Indonesia (Pelindo) I, II, III, & IV (Persero).

■ Rail: The Kuala-Tanjung to Sei Mangkei rail road was assigned to PT. Kereta Api
Indonesia (Persero).

■ Road: The Medan-Binjai toll road was assigned to PT. Hutama Karya (Persero) and the
toll road connecting Tebing Tingi-Kuala Tanjung-Sei Mangkei was assigned to PT. Jasa
Marga (Persero) Tbk.
Roads and ports are the largest subsectors today by investment value, but growth is also
expected in airports and railways (Figure 10Figure 10Figure 10).

Figure 10: Transport Infrastructure InvestmentTransport Infrastructure Investment (Source: PwC, 2016 based on
Oxford Economics)

21
PwC (2016), analysing the APBN-P 2016 (approved by the Ministry of Finance), noted that
planned government infrastructure expenditures increased by 9% in the 2016 budget over
the previous budget. The report noted that operational spending cuts, e.g. travel and meeting
expenses, were made to individual areas in the middle of 2016, including the budget of the
Ministry of Public Works and Public Housing and several other infrastructure-related
ministries. Finally, the report pointed out that some national strategic port facilities and
railway projects have been affected by the cuts (e.g. the Madiun-Kedungbanteng double-
track project in East Java and the Makassar-Parepare railway construction in South Sulawesi)
and that the second phase of cuts, made in late August 2016, will affect project realisation
and slow down or postpone the construction of several infrastructure projects.
This section focuses on road infrastructure, which dominates the mobility of people and
goods, serving approximately 85% of passenger transport and 90% of freight. Data and
information related to rail, seaport, airport and in-land waterways infrastructures are
available in Annex 1.

Capacity
ADB (2016) estimates that the total capitalisation of the national road infrastructure assets
has exceeded USD 13bn, with the network including national roads (39,900 km), provincial
roads (48,122 km) and district roads (393,078 km) in 2012 – approximately 481,100 km in
total.
The road sector accounts for 40% of total infrastructure investment and 1.6% of GDP per
annum, with the Ministry of Public Works planning increased spending (World Bank, 2014).

Main Network
More granular information is available for the year 2009, at which point Indonesia’s national
road network was 479,079 km (Table 6Table 6Table 6). While the total number of vehicles
in Indonesia tripled between 2001 and 2010 increased by a factor of three, the national road
network, which serves serving more than one-third of vehicle traffic, increased by only a
quarter (World Bank, 2013a).

Table 6: Indonesia Road Network in 2009 (Source: DFAT, 2013)(Source: BPS, 2016)(Source: BPS, 2016)

Road Class Length (km) Formatted Table

National 47,01738,570
Provincial 48,69155,416
District 384,810435,405

22
Jakarta 6,266
Toll 742
Total 477,079537,838

Around 80% (in km terms) of Indonesia’s road network is classified as district roads, which
are under the authority of local governments – i.e. municipalities (kabupaten/kecamatan) and
cities. The average growth rate of the entire road network is around 3.4% per year. National
roads have grown the fastest, on average (5.3%), while provincial roads have grown the least
(2.8%) (BPS, 2016; see Figure 11Figure 11Figure 6).

Figure 11: Indonesia Road Network Length (in km) by Road Class Indonesia Road Network Length (in km) by
Road Class (Source: BPS, 2016)

Issues and Challenges


National roads and toll roads are mostly kept in good condition, but tend to deteriorate
rapidly and require frequent repairs, adding to heavy congestion on key economic corridors.
Many district roads – the ones making up about 80% of the network – are in bad condition,
while the disparities between urban and rural infrastructure pose further challenges. A total
of 39% of all roads are unpaved, the highest share among ASEAN middle income countries
(Table 6Table 6Table 6).

Pipelines
The government has a goal of building 3,650 km of new roads (including 1,000 km of toll
roads) and carrying out maintenance on 46,770 km of existing roads by 2019. This will
require an investment of IDR 805tn (USD 67.9bn) (PwC, 2016).

2.5. Modal Split


Road is the dominant freight transport mode in Indonesia, both in terms of freight volume (tonnes) and transport
activity (TKM). The Ministry of Transport estimated in 2006 that roads carry around 90% of Indonesia’s freight in terms
of tonnes, followed by maritime and rail transport (

23
Table 7

Table 7Table 7). However, there are significant regional differences in terms of modal split
and volume of freight. As an example, in Kalimantan, Sulawesi and Eastern Indonesia,
maritime transport dominates. It is also important to note that, according to these estimates,
Java accounts for 88.7% of overall freight volume, underscoring the importance of the
region for green freight activities.

Table 7: Freight Volume Production by Island and Mode (Source: MoT, 2006)Freight Volume Production by Island
and Mode (Source: MoT, 2006)

Kilotonnes/year % by area % Road Freight % Sea Freight

Java 7,605,578 88.7 95.7 4.2


Sumatra 807,972 9.4 90.7 9.4
Sulawesi 85,692 1 39.5 60.2
Bali, NTB, NTT 75,773 0.9 93.5 6.7
Kalimantan 4,146 0.5 10.9 89.3
Maluku, Papua 11 0.0001 0.4 99.4
Indonesia 8,579,172 100 93.5 6.5

We prefer to use data set from Origin – Destination (O – D) Survey for Freight from the
year 2006, since the data from the 2016 O – D Survey for Freight are not yet validated. A
detailed breakdown of the modes by TKM is not available. Estimates suggest that road
freight makes up 70%-90% of all TKM (DFAT, 2013; UNCRD, 2010), but given data
limitations and divergent methodologies, these numbers should be viewed cautiously. Figure
12Figure 12Figure 12 shows such one modal share analysis.

24
Figure 12: Modal Share Analysis for IndonesiaModal Share Analysis for Indonesia (Source: INDII, 2017)

Although rail and coastal shipping is available along several corridors, these modes are
unable to compete with road transport, largely due to insufficient investment in railways,
ports and multimodal transfer facilities, in addition to intermodal transport policies that
favour road transport. According to MoT data, more than 58% of intra-Java freight
movements are either within a special region/province or between adjacent special
regions/provinces. Therefore, opportunities for increased use of non-road modes are
limited (INDII, 2012).
In the 2007-2011 period, transport costs were the largest component (12% of GDP) of
national logistics costs, which are estimated at 24-25% of GDP in the same period (Martalia,
2016) as shown in Figure 13Figure 13Figure 13.

25
Figure 13: Breakdown of Indonesia Logistics CostsBreakdown of Indonesia Logistics Costs (Source: Martalia,
2016)

In terms of mode, transport costs break down into 72% road, 20% maritime, 1.4% air, 0.5%
rail and 6.19% related services. Fuel costs are a major component of transport costs, which
is why the overall logistics costs have historically been closely correlated with domestic fuel
prices. Fuel is the biggest expense for truck operators, accounting for 28-39% of total
vehicle operation costs (The Asia Foundation, 2008).
The MoT’s RPJMN 2015-2019 highlights the predominance of road transport. According to
the report, ‘this condition results [in] traffic accident and increases road damages. It causes
economic disadvantages and is not [environmentally] friendly due to congestion, which can
increase [emissions]. About 80% of the transport movements are still dominated by road
transport. The business communities prefer to use trucks rather than trains due to, amongst
others handling, schedule, accessibility. Reducing road-load can be done by shifting it into
other modes such as railway and sea transport which have larger capacity and relatively faster
travel time, no illegal retribution and higher safety and security of the goods’. The prevalence
of road freight transport also helps to explain why heavy duty vehicles account for such a
significant share of energy demand from the transport sector.

26
3. Policies and Stakeholders
Transport initiatives, activities and projects have become increasingly complex over time,
and emerging pressure and action groups have injected even more complexity into decision
making processes (Macharis, 2005). This section briefly describes the relevant stakeholders
for green freight and logistics efforts in Indonesia, discussing their roles and responsibilities
and their interests in transport development. The section also examines relevant policies and
initiatives.

3.1. Stakeholders
Several institutions play an important role in the freight and logistics sector. Table 8Table
8Table 8 lists the key actors from government institutions, the private sector (including
associations) and civil society, and outlines their roles.

Table 8: Stakeholders in Green Freight and Logistics in IndonesiaStakeholders in Green Freight and Logistics in
Indonesia (Source: Authors)

Type Name Role


Central Ministry of Transportation Main regulatory body that develops and
government implements freight policies. Directorate
General for Land Transportation issues
permits for freight for specific goods, heavy
equipment and hazardous goods.
Ministry of Environment and Sets policies on emissions standards and fuel
Forestry economy standards, also for HCVs.
Ministry of Trade Develops regulations to improve distribution
of goods and services. Regulates licenses and
tariffs for import of trucks.
Ministry of Energy Directorate General for Oil and Gas in
charge of fuel quality issues.
Ministry of Finance Vehicle taxation.
Coordinating Ministry of Economic Provide coordination and synchronisation
Affairs for policy development, as well as
implementation for all issues relevant to
Indonesia’s economy.
Coordinating Ministry of Maritime Provide coordination and synchronisation in
all aspects relevant to the government’s
activities in the maritime sector.
National Planning Ministry Main regulatory body for designing national
(BAPPENAS) development plan and to support the
President in national development
National Police Department Responsible authority for law enforcement
Local Provincial Transport Office (Dinas Issues permit for general freight (angkutan
government Perhubungan/Dishub provinsi) barang umum) management.

27
Type Name Role
State-owned Indonesian Railways (KAI) Operator of public railways in Indonesia.
company Subsidiaries include PT KAI Commuter for
passenger transport and PT KALOG (Kereta
Api Logistik) for courier and cargo services,
container and non-container trains, goods
terminal, stevedoring and warehousing.
Angkasa Pura I and II Airport operators.

Indonesia Port Corporation Port operators, some with subsidiaries


(PELINDO I, II, III, IV) handling logistics business.
PT Djakarta Lloyd Provides services for container and bulk sea
freight.
PT Pelayaran Nasional Indonesia Provides sea transport services for passenger
(PELNI) and goods between islands. Implements sea-
toll programme.
PT Varuna Tirta Prakarsya Manages national and international logistics.

PT Pealyaran Bahtera Adhiguna Main business is transporting coal to PLN’s


power plant (a subsidiary of PLN and
Independent Power Producer/IPP); PLN is a
state-owned electric utility.
Private Land Transportation Organisation Organisation of motorised road transport
sector, (ORGANDA) entrepreneurs (both passenger and freight).
including
associations Indonesian Trucking Association Facilitates interaction among truck operators
(APTRINDO) and trucking companies.
Indonesian Logistics and Communication platform for freight
Forwarders Association (ALFI) forwarders.
Association of Indonesia Key private sector partner, working together
Automotive Industries with government to support the national
(GAIKINDO) auto industry.

Indonesian National Ship Owners Protects and promotes the interests of


Association (INSA) members and directs business’ ability to
achieve a common interest.
Indonesia Container Freight Facilitates networking among container
Station/ CFS Association operators and communication with the
(ASDEKI) government.
Indonesia Stevedoring Association Represents stevedoring operators in ports,
(APBMI) railway and container terminals.
Indonesia Courier Service Connects and facilitates freight forwarder
Association (ASPERINDO) companies in Indonesia and represents them
in the trade chamber.
Indonesian Air Carrier Association Ensures effectiveness, promotes national
(INACA) economic growth and strengthens
relationships to achieve national goals vis-à-
vis air transport.
Inland Waterways and Roro Unites inland waterways and Roro operators

28
Type Name Role
Operator Association in order to provide better passenger and
(GAPASDAP) goods transport services.
Civil society Indonesia Transportation Society Supports and implements green freight
(MTI) measures.
Indonesia Logistics Association Organisation for supply chain and logistics
(ALI) professionals.
Indonesia Logistics Society (MLI) Umbrella professional association.

3.2. Policies and Initiatives


Though Indonesia does not yet implement specific national freight policies or programmes
with explicit environmental goals, there are several government strategies, such as RPJMN,
RENSTRA, SISLOGNAS and the Masterplan for Acceleration and Expansion of
Indonesia’s Economic Development (MP3EI), which promote a more efficient freight and
logistics sector. Multimodal freight transport, intermodal connectivity and more investment
in maritime and rail infrastructure are key policy objectives articulated in these strategies;
such efforts may help shift more transport to non-road modes. On maritime transport for
example, the government envisions Indonesia as a ‘global maritime nexus’ (Neary, 2014).
This includes boosting Indonesia’s maritime economy by improving the country’s port
infrastructure and shipping industry, among other activities.
On the other end of the strategic spectrum are environmental and energy efficiency-related
strategies, which touch on transport but with little or no freight-specific action. Table
9Table 9Table 9 offers further details on the relevant strategies.

Table 9: Policies Related to Freight and Logistics (Source: Authors)Policies Related to Freight and Logistics
(Source: Authors)

Policy Description
Presidential Regulation Perpres To develop national connectivity, RPJMN aims to improve
No. 2/2015 on Mid-term transport infrastructure and the integration of multimodal and
National Development Plan intermodal transport, including increasing rail freight volumes
(RPJMN) 2015-2019 up to 1.5 million TEUs/year11 and minimum railway market
shares of 5% for freight and 7.5% for passengers. This would
be achieved in part through 3,258 km of new railways along
Sumatra, South Java, Kalimantan and Sulawesi (Makassar –
Parepare).
Transport Ministerial This strategic planning document was endorsed in September
Regulation PM 189/2015 on 2015 and maps out how to establish better national
Strategic Planning (RENSTRA) connectivity and improved access to transport, including the
2015-2019 distribution of goods throughout the whole country. This
builds on the RPJMN, for which one of the main concerns is
to build energy security in part through energy efficiency.
RENSTRA identifies the need to accelerate multimodal

TEUs, or Twenty-foot Equivalent Units, are a measure of a ship’s cargo capacity. The measure is based on 20 foot (6.1
11

meter) long intermodal shipping containers.

29
Policy Description
transport and to enhance transport services in order to foster
the development of Indonesia’s industry and logistics sector.
Presidential Regulation Perpres SISLOGNAS’s strategic purpose is to increase the
No. 26/2012 on Blueprint for effectiveness and efficiency of national logistics flows in order
Development of National to ensure that the public’s basic needs are fulfilled and to
Logistic System (SISLOGNAS) increase the competitiveness of national products within the
2012 domestic, regional and global markets.
The vision of SISLOGNAS for 2025 is for a national logistics
system that is ‘locally integrated, globally connected for
national competitiveness and social welfare’. The locally
integrated concept aims to have all logistics activities in
Indonesia effectively and efficiently integrated by 2025, at the
rural, urban, inter-regional and inter-island levels. Also, one of
the main objectives of the logistics policy is to ‘promote the
establishment of Indonesia as a maritime state’.
Environmental considerations are not explicitly part of
SISLOGNAS, but the included strategies and programmes for
improving multimodal connectivity as well as rail and water-
borne transport effectively support shifting freight away from
roads.
Presidential Regulation Perpres The MP3EI is an ambitious master plan to accelerate
No. 32/2011 on Master Plan for economic development, reduce poverty and promote
Acceleration and Expansion of equitable regional distribution of income and wealth across
Indonesia Economic Indonesia. The MP3EI sets several priorities in the field of
Development (MP3EI) 2011 freight, including marine connectivity and port facilities. It
also plans to develop a concept of short sea shipping along
the northern Java coastline. It identifies six economic
corridors: Sumatra, Java, Kalimantan, Sulawesi, Bali-Nusa
Tenggara and Papua-Maluku and envisions intraregional
connectivity in each corridor to connect the main economic
centres in each corridor internally and externally with the
global market.
Transport Ministerial RIPNAS aims to have 15-17% rail mode share for national
Regulation PM No. 43/2011 on freight transport service and to increase private sector
Master Plan for National investment and involvement in rail transport. The plan calls
Railways (RIPNAS) 2011 for USD 67bn of investments through 2030, with the
government aiming to source 70% from the private sector.
Transport Ministerial This regulation provides guidance on the criteria for road
Regulation No. 69/1993 freight vehicles and transport of hazardous and other specific
concerning Road Freight goods.
Transport (and amendment No.
30/2002)
Trade Ministerial Regulation The Ministry of Industry enacted the regulation at the end of
No. 127/M-DAG/PER/12/2015 2015 in order to allow companies (end users, ‘reconditioning’
concerning Import of Second- companies and manufacturers) to import second-hand trucks
hand Capital Goods from 1 February 2016 until 31 December 2018.
Industry Ministerial Regulation Referring to the Trade Ministerial Regulation in 2015, this
No. 14/M-IND/PER/2/2016 regulation provides technical criteria for the goods that are
concerning Technical Criteria in allowed to be imported, including: the goods must be usable
Importing Second-hand Capital or can be ‘reconditioned’ or remanufactured and used; they
Goods should not be scrapped products.

30
Policy Description
First Nationally Determined In September 2015, Indonesia officially submitted its INDC
Contribution (NDC) as its intended commitment under the Paris Agreement, with
a GHG emissions reduction target of 29% below BAU by
2030. The INDC was converted into an NDC and registered
with the United Nations Framework Convention on Climate
Change in November 2016. It includes no specific transport
goal or action.
Presidential Regulation No. The RAN-GRK is implemented by various line ministries
61/2011 concerning National including the Ministry of Transport. The plan has a strong
Action Plan for Greenhouse passenger transport focus but proposes two as-yet
Gases Reduction (RAN-GRK) unimplemented freight-specific activities. Firstly, it suggests a
modern logistics system to be introduced in 12 cities,
including improvements in sourcing, stocking, packaging, and
distribution strategies, and potentially mode shift from road to
rail/water-borne transport. Secondly, RAN-GRK mentions a
truck fleet replacement programme that would support
introduction of aerodynamic equipment.
Environment Ministerial Decree Requires the Ministry of Environment to check compliance of
No. 141/2003 concerning the emissions test reports from manufacturers with standards
Emission Standards for New before the Directorate General of Land Transportation can
Types and Current Production. authorise sales of new vehicles.
The 2011 update of the 2005 RIKEN, which remains in the
National Energy Conservation approval process, includes a transport-specific energy
Master Plan (RIKEN) 2011 conservation target of 20% by 2025 compared to 2011 levels
(with conservation potential estimated as high as 35%).
However, the goal and measures are not broken down into
transport subsectors.

Presidential Regulation Perpres RUEN is a central government policy on the plan to manage
No. 22/2017 on National Energy energy. It sets out an inter-sectoral implementation plan of
Plan (RUEN) the National Energy Policy (KEN). RUEN should become a
reference for formulating national and local development
plans as well as national and local budgets, and should guide
ministries and government institutions to develop
RENSTRAs, the local governments to develop RUED (Local
Energy Plans) and ministries and local governments to
coordinate inter-sectoral energy plans.

Numerous other initiatives are being implemented by municipal government, civil society
organisations and the private sector. However, there is an absence of either public or private
initiatives or programmes on green freight.
Table 10Table 10Table 10 provides a list of some other relevant initiatives and efforts being
made by stakeholders in the area of green freight (either directly or indirectly).

Table 10: Initiatives by Stakeholders (Source: Authors)Initiatives by Stakeholders (Source: Authors)

Stakeholder Initiative/Description

DKI Jakarta Regulation This regulation prescribes a mandatory road-worthiness test and

31
Stakeholder Initiative/Description

No.5/2014 inclusion of environmentally friendly aspects regarding transport.


This local regulation provides the basis for regulating freight
activities in the Special Province of DKI Jakarta to make sure
vehicle fleets meet environmentally friendly specifications, e.g.
emissions limits.
Jakarta Government’s A local regulation banning trucks and buses older than 10 years
Regional Law No.5/2014 on from operating; yet to be widely enforced.
the Maximum Age of Public
Transport
Land Transportation In cooperation with NEA Transport Research and Training
Organisation (ORGANDA) (from the Netherlands), ORGANDA has implemented eco-
driving training, which is projected to reduce fuel use by up to
20%. ORGANDA also endorsed the eco green port concept in
the multipurpose terminal of Lamong Bay Port in Surabaya, by
helping to shift the truck fleet from diesel to natural gas.
Indonesian Logistics and ALFI promotes trains as a more environmentally friendly freight
Forwarders Association transport option, especially across Java, increasing capacity and
(ALFI) punctuality of delivery. In turn, it encourages the improvement of
railway services.
Green Freight Asia Regional initiative by shippers and carriers with the objective of
lowering road freight fuel consumption and shipping costs across
the supply chain. So far, no Indonesian companies are utilising
the Green Freight Asia label.
Global Green Freight Action This project, by the Heavy Duty Vehicle Initiative of the
Plan international Climate and Clean Air Coalition (CCAC), works
towards (1) aligning and enhancing existing green freight efforts
through knowledge sharing, peer-to-peer partnerships, and
government-industry; (2) identifying ways to incorporate black
carbon, PM and other air pollutant emission reduction
calculations in green freight programs; and, (3) expanding or
improving green freight programs in interested countries.
Indonesia has so far not joined this project. However, there have
been CCAC supported activities on marine vessels and ports.

32
4. Road Freight Sector Assessment
This White Paper gives special attention to road transport for several reasons. First, the road
freight sector offers a number of ‘low-hanging fruit’ – i.e. relatively feasible short- and
medium-term opportunities to move towards green freight and logistics in Indonesia.
Second, road transport is the predominant transport mode in Indonesia. Third, there is
significant emission reduction potential in shifting from road transport to other modes.

Road Freight Vehicles


According to official registration statistics, the number of trucks doubled between 2006 and
2016 to a total of more than 7 million, accounting for 5% of the country’s total vehicle fleet
(which is 80% motorcycles).12

Size of Trucks
The sale of trucks (Figure 14Figure 14Figure 14) increased significantly from 2009-2013,
with an average yearly growth rate of 46.1%. The sales of trucks with a gross vehicle weight
(GVW) of more than 24 tonnes and trucks with a GVW of less than five tonnes were grew
the fastest in the 2009-2013 period, at 57.7% and 61.4% respectively. However, overall road
freight vehicle sales decreased again in the 2013-2016 period, at an average annual rate of -
14.4%.

Figure 14: Annual Road Freight Vehicle Sales by Vehicle Type 2005-2016 Annual Road Freight Vehicle Sales by
Vehicle Type 2005-2016 (Source: Authors, based on GAIKINDO, 2016)Authors, based on GAIKINDO, 2016)

LCVs (<5 tonnes GVW) dominated the road freight vehicle market in the 2005-2016
period, making up more than 53% of all sales. In 2015 and 2016 LCVs made up 72.6% and
66.1% of all road freight vehicle sales, respectively.

12http://www.ajtpweb.org/ajtp/statistics/Indonesia/data/road-transport-of-indonesia.html, accessed May


2017

33
Manufacturers
Japanese truck brands (e.g. Mitsubishi, Hino, Isuzu, UD Trucks) have a dominant market
share of approximately 90%, benefitting from low import duties and free trade agreements
based on their manufacturing operations in Indonesia. High import duties, such as 40% for
complete built-up (CBU) vehicles, mean that manufacturers prefer to produce complete
knock-down (CKD) vehicles, assembled in-country, which are subject to a smaller 10%
duty. This allows them to offer more competitive prices.13
Some automakers, e.g. Isuzu, decided to have Indonesia as a base to produce commercial
vehicles with Euro 2 or lower emissions standards, while producing higher standard vehicles
in Japan. Similarly, Thailand has been used as a production base for LCVs such as pick-up
trucks and sport utility vehicles.14

Vehicle Imports
The government prohibited the import of second hand trucks from 2006 until 2015.
However, as they are around 50% cheaper than brand new models, as many as two thousand
second hand trucks per year were illegally imported during that period.15 The government
allowed the import of second hand trucks in 2015 through Trade Ministerial Regulation No.
127/M-DAG/PER/12/2015, which allows companies to import trailers and semi-trailer
trucks from 1 February 2016 until 31 December 2018.

Vehicle Age
The average truck age is about 10-11 years, with average utilisation at about 13 years (The
Asia Foundation, 2008).
Data from the Ministry of Trade shows that there are 14,057 trucks in the Port of Tanjung
Priok (Table 11Table 11Table 10). According to these figures, as of 2014, 62% were more
than 10 years old and 8.1% are between 5-10 years, with the rest five years old or newer.16

13
Roland Berger, Go SEA: Chances and Challengers for OEMs, 2012
14 http://bisnis.liputan6.com/read/755060/produsen-truk-jepang-pilih-indonesia-jadi-basis-produksi, accessed 1 May 2017
15 https://en.tempo.co/read/news/2014/10/30/056618244/Used-Truck-Import-Overruns-Domestic-Market, accessed in

March 2017
16 https://m.tempo.co/read/news/2014/11/13/090621607/pembatasan-usia-mobil-9-000-truk-tak-beroperasi, accessed

March 2017

34
Table 11: Age of Truck Fleet at Port of Tanjung Priok (Source: Ministry of Trade)

Age of truck Number of trucks

2010 2011 2012 2013 2014 % (2014)

> 20 years 596 359 847 1,341 3,535 25%

15-20 years 4,127 3,801 4,448 4,589 3,668 26%

10-15 years 3,110 2,620 1,926 2,243 1,493 11%

5-10 years 852 825 1,096 1,922 1,136 8%

< 5 years 502 431 587 1,592 4,225 30%

Total 9,187 8,036 8,904 11,687 14,057 100%

Industry Structure
The road freight industry consists of a handful of large companies and thousands of
individual, small and medium-size logistics players. It is estimated that there are more than a
million road transport companies in Indonesia, with a fleet of six to seven million trucks in
2014, more than 50% of which have a capacity to carry at least 7.5 tonnes (IRU & World
Bank, 2016). This creates intense price competition among operators. The competition and
slim profit margins make it difficult for companies to invest in technology upgrades or fleet
renewal. The dominance of small players in the industry (i.e. firms with one to five trucks,
mostly single axle) stems from very low market entry barriers, with virtually no requirements
for starting a transport business. Furthermore, operational areas for trucks are not limited by
administrative jurisdictions (UNCRD, 2010).
Road freight sector fragmentation is both a cause and an effect of an inefficient industry.
Low profitability in the sector prevents industry overhaul and acts as a main driver for
further fragmentation of industry. Fragmented industry acts as a catalyst for increasing
inefficiency in freight sector. Operators experience a high number of empty trips and in
order to compensate for the loss, use overloaded trucks. Since the industry is fragmented,
they are unable to effectively demand supportive policies from the government, and general
awareness of ‘green freight solutions’ in the industry remains low. Operators and drivers are
generally unaware of technological and non-technological solutions to improve fuel
efficiency and loading efficiency in the freight sector.

Truck Financing
Capital costs for trucks and spare parts remain high because of high loan interest rates and
taxes. Because fleet trucks are categorised as commercial instead of investment goods, they
are taxed at the commercial rate. Currently, fleet procurement is subject to an advance
payment of about 30%, with an interest rate of 12%-14%; over three years the cost of fleet

35
depreciation reaches 17%-20% of total cost of transport.17 In addition, fleet procurement is
also subject to the value-added tax (PPN) and transfer tax (BBN). These high investment
costs have resulted in operators maintaining relatively old fleets, which lead to high fleet
depreciation and operating costs (fuel, oil, spare parts, maintenance, etc.). Truck operators
cannot upgrade their vehicles due to a lack of affordable interest rates from local banks.18
The resulting prevalence of old trucks and poor technology results in high pollutant and
GHG emissions and low vehicle efficiency.

Truck Drivers
Very few companies have permanent drivers, and most hire drivers for single deliveries.
Truck drivers usually get paid a lump sum that includes all costs they may incur along the
way, such as fuel, personnel, tolls and bribes (The Asia Foundation, 2008). Most truck
drivers are middle-aged, as the hard-working conditions are unattractive for younger
generations. On the other hand, it was found out that many drivers’ apprentices are not of
legal working or driving age,19 which demonstrates the complete lack of regulation on
driving competence.

Empty Truck Trips


Examples can be found throughout Java’s northern coastline (Jalur Pantura) of trucks
carrying overweight cargo but returning to their places of origin totally empty. The empty
hauling does not produce economic value, yet contributes to congestion and affects other
road users. At the Jakarta’s port, 40%-50% of truck trips are empty haul trips, exacerbating
problems with traffic and pollution.20 The government has called on freight companies to
implement a two-way system that would ensure trucks entering and exiting the port are
carrying loads.
PELINDO II, one of the port operators, plans to implement vehicle booking technology to
reduce empty trips by the end of 2015. National data regarding empty hauls is still lacking,
however. It is expected that data from the 2016 National Origin-Destination (O-D) Survey
will fill this data gap. Some empty running is inevitable: ‘there are often good reasons for
empty running, including geographical imbalances in freight traffic flows, short lengths of
haul, tight delivery scheduling and vehicle compatibility issues’ (McKinnon, 2015).
Companies like Open Port have started to offer digital logistics platforms to reduce empty
loads through backhaul and shared loads.21

17 Setijadi, Empowering Road Transportation. Bisnis Indonesia, 2014.


18 http://en.tempo.co/read/news/2014/11/13/056621732/Jakarta-New-Law-Could-Put-9000-Trucks-Out-of-Service,
accessed February 2016
19 http://megapolitan.kompas.com/read/2011/07/26/0338236/Umur.Tak.Cukup.SIM.A.Pun.Dipakai.Narik.Trailer,

accessed in March 2017


20 Atlas Information Monitor, Pelindo II Will Apply VBS to Reduce Empty Trips, 2014, http://aim-services.co.id/pelindo-ii-

akan-terapkan-vbs-untuk-kurangi-truk-kosong-bisnis-indonesia/, accessed February 2016


21 https://www.openport.com/news/1333

36
Utilisation of Freight Vehicles
Utilisation of freight vehicles in Indonesia is far below other countries. APTERINDO
estimates that the average annual vehicle kilometres travelled (VKT) of trucks in about
50,000 km, compared to 120,000 in Thailand and 200,000 in Europe. This comparatively
weak performance can be partially blamed on poor operational planning due to low
managerial capacity in truck companies, and overall inefficiency in the freight transport
sector. Only a few companies can afford an information system for efficient and productive
operation. Another factor that negatively affects fleet productivity is congestion and waiting
time. In Jakarta, freight fleets between Cikarang Industrial Complex and the Port of Tanjung
Priok on average have been reported to only make 14-20 trips per month (less than one trip
per day), while the estimate for this relatively short distance of 50 km is at least two trips per
day.

Urban Freight Operations


The economic development of urban agglomerations depends heavily on a reliable supply of
goods and materials. At the same time, freight transport in urban centres contributes to air
pollution, noise and traffic congestion. Optimisation of urban freight delivery can help
alleviate its negative effects. Compared to passenger transport, freight poses additional
challenges, particularly because it is primarily a private sector issue involving a large number
of stakeholders with unique and sometimes-competing interests (Herzog, 2010).

Overloading
As of 2008, more than half of trucks were overloaded – on average, about 45% above the
payload weight limit. This is possible because most trucks are ‘open box’ trucks, allowing
drivers to exceed the maximum capacity to earn more from a single trip (The Asia
Foundation, 2008).22 The more payload a truck has, the more fuel it consumes on its journey
(in L/100km). However, the more suitable indicator to consider is load-specific fuel
consumption- which is fuel consumption per unit of payload, in L/100 tkm. As the load
specific fuel consumption improves with higher payload, overloading could be even
advantageous in terms of fuel effiency. However there are numerous other drawbacks of
overloading: Vehicle overloading damages road infrastructure, in turn contributing to the
unevenness of the road surface and delays caused by road maintenance. In turn, this reduces
the efficiency of road freight transport (McKinnon, 2015). In addition, overloaded trucks
may cause safety issues, increased maintenance expenses and accelerated vehicle wear.

Fuel Consumption
Fuel accounts for a large share of operating costs in Indonesia’s freight transport sector and
is the source of virtually all freight-related emissions. While fuel efficiency should a key
performance criterion for transport firms and companies when acquiring a new vehicle,
manufacturers (and/or sellers) in Indonesia rarely provide this kind of information to users.

22Also http://properti.kompas.com/read/2016/10/25/151926921/truk.kelebihan.muatan.bikin.kesal.ganjar.pranowo,
accessed in March 2017

37
National data on the relative or total fuel efficiency of the road freight sector is not available
publicly. Gathering such data is vital to refining the understanding of efficiency
opportunities and to measure green freight progress. However, even in the absence of data,
it is safe to say that Indonesia has a huge potential to bring forth a fleet of higher-efficiency,
lower-emission vehicles.

Freight Transport Data


Since the 1990s, MoT has been conducting O-D surveys. These surveys record demand
(origin and destination, frequency of trips) and supply (fleet networks) for both passenger
and goods transport. However, the survey is cost- and labour-intensive and therefore only
takes place once every five years, with latest one done in 2016.
The 2016 O-D survey covered a large number of cities (approx. 540 cities) and applied a
new method called a commodity flow survey. The Research and Development Agency of
MoT is responsible for conducting the survey. In the 2016 survey, comprehensive
questionnaires were sent to goods owners (producers and non-producers or distributors),
freight forwarders and logistics companies. The questionnaires cover destinations, origins,
loads, main transport modes and other important issues. The 2016 survey focused on freight
transport of about 40 commodities.

38
5. Recommendations for Greener Freight and Logistics
in Indonesia
This White Paper promotes the vision that ‘the implementation of green freight policies and
measures improves the efficiency of Indonesia’s logistics system and contributes to
Indonesia’s climate change mitigation and energy efficiency goals’. There are many possible
strategic actions the government could take to realise this vision.
Based on this vision and the situation outlined in the previous sections, the White Paper
offers eight recommendations, ranked 1st to 8th (Table 12). These recommendations can
help translate the vision above into reality.
At the moment there is no systematic measurement or reporting of key performance
indicators for green freight (e.g. freight transport specific fuel consumption or CO2
emissions23). This shortage of data can be a problem for selecting, planning and
implementing policies and for monitoring their progress. Therefore, efforts to collect and
analyse data on freight must be stepped up through various activities outlined under
“Improve data monitoring and reporting framework” recommendation. In parallel and
closely related, a set of studies to map the potential of the different feasible policy measures
to improve road freight fuel efficiency should be performed.
The importance of vehicle fleet operations must also be recognised and addressed. Four
related recommendations are the consolidation of the trucking industry, reduction of empty
truck and container trips, efficiency and performance improvements to urban freight
operations and the establishment of public-private partnerships (PPPs) through a green
freight programme.
A gradual shift of freight transport from road to waterways or rail is one of the most
effective of all green freight options. This recommendation is to pursue this modal shift by
enhancing intermodal freight transport connectivity (see also Annex 2: Intermodal
Connectivity Improvement and Annex 3: Online Freight Exchange). Finally, in order to
boost and trigger activities at national and local levels, the last recommendation emphasises
participation in international and regional green freight activities are recommended.

Improve efficiency Develop policy 70% of trucks are more 2019 - Leading Formatted: No bullets or numbering
of HCVs assessments in the than 1 years old (as of 2024  MoT
areas of safety and fuel 2008)
efficiency of HCVs,
1st Priority

including technology Supporting Formatted: No bullets or numbering


2,000 second-hand
options (e.g. trucks are imported  Ministry of Industry (Supporting)
Formatted: Indent: Left: 0", Hanging: 0.17"
telematics, low illegally per year; (Batas  Ministry of Energy and Mineral
resistance tyres, akhir import truck Resources
aerodynamics) sampai akhir 2018)  Ministry of Environment and
capital cost for trucks Forestry

23 See Annex 4 for further relevant indicators.

39
Study policy measures to and spare-parts are 2019 - Leading Formatted: Font: Bold
stimulate fleet renewal, high 2024  MoT Formatted: No bullets or numbering
e.g. a government-
subsidised loan scheme Very few companies
with lower interest rates Supporting Formatted: Font: Bold
have permanent drivers;
most hire drivers for  Ministry of Finance Formatted: No bullets or numbering
single deliveries  Coordinating Ministry of
Formatted: Indent: Left: 0", Hanging: 0.17"
Economic
Apply effective measures More than half of 2019 - Leading Formatted: Font: Bold
against overloading trucks are overloaded 2024  MoT Formatted: No bullets or numbering
(by an average of 45%
above payload weight
limit) Supporting Formatted: Font: Bold
 Transport Agencies at provincial
Formatted: No bullets or numbering
& city level Formatted: Indent: Left: 0", Hanging: 0.17"
 National & Regional Police
Offices
Enhance intermodal Further study policy- Rail transport plays a 2019 - Leading Formatted: Font: Bold
freight transport related and other barriers minor role at just 1% of 2024  MoT Formatted: No bullets or numbering
connectivity to intermodal transport freight modal share

Design policies to Commercial rail freight 2019 - Leading Formatted: Font: Bold
address barriers in services are at a 2024  MoT Formatted: No bullets or numbering
conjunction with disadvantage compared to
developing a multimodal road transport
transport action plan Supporting Formatted: Font: Bold

A number of issues  Ministry of Planning Formatted: Indent: Left: -0.02", No bullets or numbering
prevent rapid scaling-up (BAPPENAS) Formatted: Indent: Left: 0", Hanging: 0.11"
of shipping operations  Coordinating Ministry of
Economic
Increasing role of  Coordinating Ministry of
transport in climate Maritime
Conduct a pilot project change 2019 - Leading Formatted: Font: Bold
2nd Priority

to implement policies 2025  MoT Formatted: No bullets or numbering


related to multimodal
freight transport along
freight corridors between Supporting Formatted: Font: Bold

major cities  Ministry of Planning Formatted: No bullets or numbering


(BAPPENAS) Formatted: Indent: Left: 0", Hanging: 0.11"

Include climate change 2019 - Leading Formatted: Font: Bold


mitigation criteria to 2025  MoT Formatted: No bullets or numbering
programming for
national infrastructure
funding Supporting Formatted: Font: Bold
 Ministry of Planning Formatted: No bullets or numbering
(BAPPENAS) Formatted: Indent: Left: 0", Hanging: 0.11"
 Ministry of Environment and
Forestry

Conduct a study on 2019 - Leading Formatted: Font: Bold


multimodal freight 2025  MoT Formatted: No bullets or numbering

40
exchange operations
based on new Supporting
information and
 Ministry of Communication and
communications Information
technology innovations

Improve the Based on the O-D Congestion in Java and 2022 - Leading Formatted: Font: Bold
efficiency and survey, conduct an large cities 2025  MoT Formatted: No bullets or numbering
performance of assessment of whether it
freight operations in is necessary to develop Decision makers often
urban areas logistics centres in urban Supporting Formatted: Font: Bold
lack relevant information
areas. and knowledge needed to  Transport Agencies at provincial
Formatted: No bullets or numbering
If it is needed, prioritise make informed decisions & city level Formatted: Indent: Left: 0", Hanging: 0.17"
pilot cities based on on city logistics  Ministry of Planning
economic analysis of the (BAPPENAS)
3rd Priority

O-D survey data  Planning Agency (BAPPEDA)

Conduct an assessment 2019 - Leading Formatted: Font: Bold


of policy options to 2024  MoT Formatted: No bullets or numbering
support development of
urban consolidation
centres (see Annex 4:
Improving Urban
Freight)

Reduce empty truck Conduct further research Empty truck and 2021 - Leading
and container trips and analysis on empty container trips that waste 2024  MoT
trips, including an fuel and money while
Formatted: No bullets or numbering
analysis of O-D survey contributing to pollution
data and a study of empty and congestion
trip patterns and the root
causes on selected
corridors

Encourage the wider use 2020 - Leading


4th Priority

of electronic freight 2024  MoT


platforms and other
available logistics
management solutions Supporting Formatted: Font: Bold
 Transport Agencies at provincial
Formatted: No bullets or numbering
& city level Formatted: Indent: Left: 0", Hanging: 0.11"
Implement pilot logistics 2022 - Leading
management activities in 2024  MoT
certain areas and/or with
several companies
Supporting Formatted: Font: Bold
 Transport Agencies at provincial
Formatted: No bullets or numbering
& city level Formatted: Indent: Left: 0", Hanging: 0.11"
Consolidate the Improve the licensing Fragmented market is a 2020 - Leading
Priority

trucking industry system to facilitate barrier for improving 2024  MoT


5th

consolidation within the efficiency


industry, e.g. by

41
prescribing the minimum Supporting Formatted: Font: Bold
number of trucks and Minimal requirements for  Transport Agencies at provincial
Formatted: No bullets or numbering
average truck age starting a transport & city level
business  National & Regional Police
Offices
Develop a policy paper 2020 - Leading
to promote company 2024  MoT
cooperation
Supporting Formatted: Font: Bold
 Coordinating Ministry ofFormatted: No bullets or numbering
Economic Formatted: Indent: Left: 0", Hanging: 0.11"
 Ministry of Trade
Improve data Enhance data collection The transport sector 2019 - Leading
monitoring and processes accounted for 28% of 2024  MoT
reporting Indonesia’s energy
framework demand and for 21% of
energy-related CO2 Supporting Formatted: Font: Bold

emissions (as of 2008)  Ministry of EnvironmentFormatted:


and No bullets or numbering
Forestry Formatted: Indent: Left: 0", Hanging: 0.11"
Indonesia Energy  Coordinating Ministry of
Outlook 2014 shows that Maritime Affairs
transport fuel
Use improved freight consumption may double 2019 - Leading
transport data for a over the next decade 2024  MoT Formatted: Indent: Left: 0", Hanging: 0.11"
monitoring, reporting
and verification (MRV)
6th Priority

system for transport Supporting Formatted: Font: Bold

GHG emission  Ministry of EnvironmentFormatted:


and No bullets or numbering
Forestry Formatted: Indent: Left: 0", Hanging: 0.11"
 Ministry of Planning
(BAPPENAS)
 Coordinating Ministry of
Maritime Affairs

Feed findings back into 2021 - Leading


green freight policy  MoT
design
Supporting Formatted: Font: Bold
 Coordinating Ministry ofFormatted: No bullets or numbering
Maritime Affairs Formatted: Indent: Left: 0", Hanging: 0.11"

Establish public- Hold multi-stakeholder Reducing logistics cost 2019 Leading


private partnerships dialogues with industry to from 23.5% GDP in 2014  MoT
through a green develop a vision, to 19.2% by 2019
7th Priority

freight programme objectives and (President Jokowi’s


programme design target) Supporting Formatted: Font: Bold
 Coordinating Ministry ofFormatted: Indent: Left: 0.01", No bullets or numbering

International trend Economic Formatted: Indent: Left: 0", Hanging: 0.11"


towards more  Ministry of Planning
environmentally friendly (BAPPENAS)

42
Build capacity and offer practices 2019 – Leading
guidance regarding 2024  MoT
development of joint Private sector is interested
programmes to promote but still waiting for
fuel efficiency and Supporting Formatted: Font: Bold
guidance from
integrate initiatives, government  Ministry of Energy and Mineral
Formatted: No bullets or numbering
actions and measures Resources Formatted: Indent: Left: 0", Hanging: 0.11"
towards a more  Ministry of Economic
comprehensive and
coherent approach to
green freight and logistics

Participate in Encourage Indonesian Opportunity to learn 2019 - Leading


regional and companies to join Green lessons and share 2024  MoT
international Freight Asia (GFA) experiences concerning
initiatives activities and apply for green freight policies,
8th Priority

the GFA label programmes and activities

Joining Global Green 2019 - Leading


Freight Action Plan 2024  MoT

Improve efficiency Develop policy 70% of trucks are more 2019 - Leading Formatted: No bullets or numbering
of HCVs assessments in the than 1 years old (as of 2024 MoT
areas of safety and fuel 2008)
efficiency of HCVs,
Supporting Formatted: No bullets or numbering
including technology 2,000 second-hand
options (e.g. Ministry of Industry Formatted: Indent: Left: 0", Hanging: 0.17"
trucks are imported (Supporting)
telematics, low illegally per year; (Batas
resistance tyres, Ministry of Energy and
akhir import truck
aerodynamics) Mineral Resources
sampai akhir 2018)
Ministry of Environment and
capital cost for trucks
Forestry
and spare-parts are
Study policy measures to high 2019 - Leading Formatted: Font: Bold
1st Priority

stimulate fleet renewal, 2024 MoT Formatted: No bullets or numbering


e.g. a government-
Very few companies
subsidised loan scheme
have permanent drivers; Supporting Formatted: Font: Bold
with lower interest rates
most hire drivers for Ministry of Finance Formatted: No bullets or numbering
single deliveries Coordinating Ministry of
Formatted: Indent: Left: 0", Hanging: 0.17"
Economic
Apply effective measures More than half of 2019 - Leading Formatted: Font: Bold
against overloading trucks are overloaded 2024 MoT Formatted: No bullets or numbering
(by an average of 45%
above payload weight
limit) Supporting Formatted: Font: Bold
Transport Agencies at provincial
Formatted: No bullets or numbering
& city level Formatted: Indent: Left: 0", Hanging: 0.17"
National & Regional Police
Offices
Enhance intermodal Further study policy- Rail transport plays a 2019 - Leading Formatted: Font: Bold
Prior
2nd

ity

freight transport related and other barriers minor role at just 1% of 2024 MoT Formatted: No bullets or numbering

43
connectivity to intermodal transport freight modal share

Commercial rail freight


Design policies to services are at a 2019 - Leading Formatted: Font: Bold
address barriers in disadvantage compared to 2024 MoT Formatted: No bullets or numbering
conjunction with road transport
developing a multimodal
Supporting Formatted: Font: Bold
transport action plan
A number of issues Ministry of Planning Formatted: Indent: Left: -0.02", No bullets or numbering
prevent rapid scaling-up (BAPPENAS) Formatted: Indent: Left: 0", Hanging: 0.11"
of shipping operations Coordinating Ministry of
Economic
Increasing role of Coordinating Ministry of
transport in climate Maritime
change
Conduct a pilot project 2019 - Leading Formatted: Font: Bold
to implement policies 2025 MoT Formatted: No bullets or numbering
related to multimodal
freight transport along
Supporting Formatted: Font: Bold
freight corridors between
major cities Ministry of Planning Formatted: No bullets or numbering
(BAPPENAS) Formatted: Indent: Left: 0", Hanging: 0.11"

Include climate change 2019 - Leading Formatted: Font: Bold


mitigation criteria to 2025 MoT Formatted: No bullets or numbering
programming for
national infrastructure
Supporting Formatted: Font: Bold
funding
Ministry of Planning Formatted: No bullets or numbering
(BAPPENAS) Formatted: Indent: Left: 0", Hanging: 0.11"
Ministry of Environment and
Forestry

Conduct a study on 2019 - Leading Formatted: Font: Bold


multimodal freight 2025 MoT Formatted: No bullets or numbering
exchange operations
based on new
Supporting Formatted: Font: Bold
information and
communications Ministry of Communication and No bullets or numbering
Formatted:
technology innovations Information Formatted: Indent: Left: 0", Hanging: 0.11"

Improve the Based on the O-D Congestion in Java and 2022 - Leading Formatted: Font: Bold
efficiency and survey, conduct an large cities 2025 MoT Formatted: No bullets or numbering
performance of assessment of whether it
freight operations in is necessary to develop Decision makers often Supporting Formatted: Font: Bold
urban areas logistics centres in urban lack relevant information
areas. Transport Agencies at provincial
Formatted: No bullets or numbering
3rd Priority

and knowledge needed to & city level


If it is needed, prioritise Formatted: Indent: Left: 0", Hanging: 0.17"
make informed decisions
pilot cities based on Ministry of Planning
on city logistics
economic analysis of the (BAPPENAS)
O-D survey data Planning Agency (BAPPEDA)

Conduct an assessment 2019 - Leading Formatted: Font: Bold


of policy options to 2024 MoT Formatted: No bullets or numbering
support development of

44
urban consolidation
centres (see Annex 4:
Improving Urban
Freight)

Reduce empty truck Conduct further research Empty truck and 2021 - Leading
and container trips and analysis on empty container trips that waste 2024 MoT
trips, including an fuel and money while Formatted: No bullets or numbering
analysis of O-D survey contributing to pollution
data and a study of empty and congestion
trip patterns and the root
causes on selected
corridors

Encourage the wider use 2020 - Leading


4th Priority

of electronic freight 2024 MoT


platforms and other
available logistics
Supporting Formatted: Font: Bold
management solutions
Transport Agencies at provincial
Formatted: No bullets or numbering
& city level Formatted: Indent: Left: 0", Hanging: 0.11"
Implement pilot logistics 2022 - Leading
management activities in 2024 MoT
certain areas and/or with
several companies
Supporting Formatted: Font: Bold
Transport Agencies at provincial
Formatted: No bullets or numbering
& city level Formatted: Indent: Left: 0", Hanging: 0.11"
Consolidate the Improve the licensing Fragmented market is a 2020 - Leading
trucking industry system to facilitate barrier for improving 2024 MoT
consolidation within the efficiency
industry, e.g. by
Supporting Formatted: Font: Bold
prescribing the minimum Minimal requirements for
number of trucks and Transport Agencies at provincial
Formatted: No bullets or numbering
starting a transport & city level
average truck age business Formatted: Indent: Left: 0", Hanging: 0.11"
5th Priority

National & Regional Police


Offices
Develop a policy paper 2020 - Leading
to promote company 2024 MoT
cooperation
Supporting Formatted: Font: Bold
Coordinating Ministry ofFormatted: No bullets or numbering
Economic Formatted: Indent: Left: 0", Hanging: 0.11"
Ministry of Trade
Improve data Enhance data collection The transport sector 2019 - Leading
monitoring and processes accounted for 28% of 2024 MoT
6th Priority

reporting Indonesia’s energy


framework demand and for 21% of
Supporting Formatted: Font: Bold
energy-related CO2
emissions (as of 2008) Ministry of EnvironmentFormatted:
and No bullets or numbering
Forestry Formatted: Indent: Left: 0", Hanging: 0.11"
Coordinating Ministry of

45
Indonesia Energy Maritime Affairs
Outlook 2014 shows that
transport fuel
Use improved freight 2019 - Leading
consumption may double
transport data for a 2024 MoT Formatted: Indent: Left: 0", Hanging: 0.11"
over the next decade
monitoring, reporting
and verification (MRV)
Supporting Formatted: Font: Bold
system for transport
GHG emission Ministry of EnvironmentFormatted:
and No bullets or numbering
Forestry Formatted: Indent: Left: 0", Hanging: 0.11"
Ministry of Planning
(BAPPENAS)
Coordinating Ministry of
Maritime Affairs

Feed findings back into 2021 - Leading


green freight policy MoT
design
Supporting Formatted: Font: Bold
Coordinating Ministry ofFormatted: No bullets or numbering
Maritime Affairs Formatted: Indent: Left: 0", Hanging: 0.11"

Establish public- Hold multi-stakeholder Reducing logistics cost 2019 Leading


private partnerships dialogues with industry to from 23.5% GDP in 2014 MoT
through a green develop a vision, to 19.2% by 2019
freight programme objectives and (President Jokowi’s
Supporting Formatted: Font: Bold
programme design target)
Coordinating Ministry ofFormatted: Indent: Left: 0.01", No bullets or numbering
Economic Formatted: Indent: Left: 0", Hanging: 0.11"
International trend
Ministry of Planning
towards more
(BAPPENAS)
environmentally friendly
7th Priority

Build capacity and offer practices 2019 – Leading


guidance regarding 2024 MoT
development of joint
Private sector is interested
programmes to promote
but still waiting for Supporting Formatted: Font: Bold
fuel efficiency and
guidance from Ministry of Energy and Mineral
Formatted: No bullets or numbering
integrate initiatives,
government Resources
actions and measures Formatted: Indent: Left: 0", Hanging: 0.11"
towards a more Ministry of Economic
comprehensive and
coherent approach to
green freight and logistics

Participate in Encourage Indonesian Opportunity to learn 2019 - Leading


regional and companies to join Green lessons and share 2024 MoT
international Freight Asia (GFA) experiences concerning
8th Priority

initiatives activities and apply for green freight policies,


the GFA label programmes and activities

Joining Global Green 2019 - Leading


Freight Action Plan 2024 MoT

46
Table 12 presents these main recommendations, proposed activities to put them into
practice and the underlying rationale behind each.

47
Table 12: Recommendations (Source: Authors)

Recommendation Activity Rationale Timelin Responsible Ministry


Rank

Formatted: Indent: Left: 0", Right: 0"


e Formatted Table
Improve efficiency Develop policy 70% of trucks are more 2019 - Leading Formatted: Font: Bold
of HCVs assessments in the than 1 years old (as of 2024  MoT Formatted: Font: Bold
areas of safety and fuel 2008)
Formatted: Font: Bold
efficiency of HCVs,
including technology  Supporting Formatted: Font: Bold
2,000 second-hand
options (e.g. trucks are imported o Ministry of Industry (Supporting) Formatted: No bullets or numbering
telematics, low illegally per year; (Batas o Ministry of Energy and Mineral Formatted: Font: Bold
resistance tyres, akhir import truck Resources Formatted: Font: Not Bold
aerodynamics) sampai akhir 2018) o Ministry of Environment and Formatted: No bullets or numbering
capital cost for trucks Forestry Formatted: Font: Bold
and spare-parts are
Study policy measures to 2019 - Leading Formatted: No bullets or numbering
high
stimulate fleet renewal, 2024  MoT Formatted: Font: Not Bold
1st Priority

e.g. a government-
Very few companies Formatted: Indent: Left: 0", Hanging: 0.17"
subsidised loan scheme
with lower interest rates have permanent drivers;  Supporting Formatted: Font: Bold
most hire drivers for o Ministry of Finance Formatted: No bullets or numbering
single deliveries
o Coordinating Ministry of Formatted: Font: Bold
Economic Formatted: No bullets or numbering
More than half of
Apply effective measures 2019 - Leading Formatted: Indent: Left: 0", Hanging: 0.17"
trucks are overloaded
against overloading 2024  MoT Formatted: Font: Bold
(by an average of 45%
above payload weight Formatted: No bullets or numbering
limit)  Supporting Formatted: Font: Bold

o Transport Agencies at provincial Formatted: No bullets or numbering


& city level Formatted: Indent: Left: 0", Hanging: 0.17"
o National & Regional Police
Offices

1
Enhance intermodal Further study policy- Rail transport plays a 2019 - Leading Formatted: Font: Bold
freight transport related and other barriers minor role at just 1% of 2024  MoT Formatted: No bullets or numbering
connectivity to intermodal transport freight modal share

Design policies to Commercial rail freight 2019 - Leading Formatted: Font: Bold
address barriers in services are at a 2024  MoT Formatted: No bullets or numbering
conjunction with disadvantage compared to
developing a multimodal road transport
transport action plan  Supporting Formatted: Font: Bold

A number of issues o Ministry of Planning Formatted: Indent: Left: -0.02", No bullets or numbering
prevent rapid scaling-up (BAPPENAS) Formatted: Indent: Left: 0", Hanging: 0.11"
of shipping operations o Coordinating Ministry of
Economic
Increasing role of o Coordinating Ministry of
transport in climate Maritime
2nd Priority

change
Conduct a pilot project 2019 - Leading Formatted: Font: Bold
to implement policies 2025  MoT Formatted: No bullets or numbering
related to multimodal
freight transport along
freight corridors between  Supporting Formatted: Font: Bold

major cities o Ministry of Planning Formatted: No bullets or numbering


(BAPPENAS) Formatted: Indent: Left: 0", Hanging: 0.11"

Include climate change 2019 - Leading Formatted: Font: Bold


mitigation criteria to 2025  MoT Formatted: No bullets or numbering
programming for
national infrastructure
funding  Supporting Formatted: Font: Bold

o Ministry of Planning Formatted: No bullets or numbering


(BAPPENAS) Formatted: Indent: Left: 0", Hanging: 0.11"
o Ministry of Environment
and Forestry

2
Conduct a study on 2019 - Leading Formatted: Font: Bold
multimodal freight 2025  MoT Formatted: No bullets or numbering
exchange operations
based on new
information and  Supporting Formatted: Font: Bold

communications o Ministry of Communication Formatted: No bullets or numbering


technology innovations and Information Formatted: Indent: Left: 0", Hanging: 0.11"

Improve the Based on the O-D Congestion in Java and 2022 - Leading Formatted: Font: Bold
efficiency and survey, conduct an large cities 20251  MoT Formatted: No bullets or numbering
performance of assessment of whether it
freight operations in is necessary to develop Decision makers often
urban areas logistics centres in urban  Supporting Formatted: Font: Bold
lack relevant information
areas. and knowledge needed to o Transport Agencies at provincial Formatted: No bullets or numbering
If it is needed, prioritise make informed decisions & city level Formatted: Indent: Left: 0", Hanging: 0.17"
pilot cities based on on city logistics o Ministry of Planning
economic analysis of the (BAPPENAS)
O-D survey data
o Planning Agency (BAPPEDA)
3rd Priority

Conduct an assessment 2019 - Leading Formatted: Font: Bold


of policy options to 2024  MoT Formatted: No bullets or numbering
support development of
urban consolidation
centres (see Annex 4:
Improving Urban
FreightAnnex 4:
Improving Urban
FreightAnnex 4:
Improving Urban
Freight)

3
Reduce empty truck Conduct further research Empty truck and 2021 - Leading
and container trips and analysis on empty container trips that waste 2024  MoT
trips, including an fuel and money while
analysis of O-D survey contributing to pollution  MoT Formatted: No bullets or numbering

data and a study of empty and congestion


trip patterns and the root
causes on selected
corridors

Encourage the wider use 2020 - Leading


4th Priority

of electronic freight 2024  MoT


platforms and other
MoT
available logistics
management solutions  Supporting Formatted: Font: Bold

o Transport Agencies at Formatted: No bullets or numbering


provincial & city level Formatted: Indent: Left: 0", Hanging: 0.11"
Implement pilot logistics 2022 - Leading
management activities in 2024  MoT
certain areas and/or with MoT
several companies
 Supporting Formatted: Font: Bold

o Transport Agencies at Formatted: No bullets or numbering


provincial & city level Formatted: Indent: Left: 0", Hanging: 0.11"
Consolidate the Improve the licensing Fragmented market is a 2020 - Leading
trucking industry system to facilitate barrier for improving 2024  MoT
consolidation within the efficiency
5th Priority

MoT
industry, e.g. by
prescribing the minimum  Supporting Formatted: Font: Bold
Minimal requirements for
number of trucks and starting a transport o Transport Agencies at Formatted: No bullets or numbering
average truck age business provincial & city level Formatted: Indent: Left: 0", Hanging: 0.11"
o National & Regional Police

4
Offices

Develop a policy paper 2020 - Leading


to promote company 2024  MoT
cooperation
MoT
 Supporting Formatted: Font: Bold

o Coordinating Ministry of Formatted: No bullets or numbering


Economic Formatted: Indent: Left: 0", Hanging: 0.11"
o Ministry of Trade
Improve data Enhance data collection The transport sector 2019 - Leading
monitoring and processes accounted for 28% of 2024  MoT
reporting Indonesia’s energy MoT
framework demand and for 21% of
energy-related CO2  Supporting Formatted: Font: Bold

emissions (as of 2008) o Ministry of Environment Formatted: No bullets or numbering


and Forestry Formatted: Indent: Left: 0", Hanging: 0.11"
Indonesia Energy o Coordinating Ministry of
Outlook 2014 shows that Maritime Affairs
6th Priority

transport fuel
consumption may double
Use improved freight 2019 - Leading
over the next decade
transport data for a 2024  MoT Formatted: Indent: Left: 0", Hanging: 0.11"
monitoring, reporting
and verification (MRV)
system for transport Supporting Formatted: Font: Bold

GHG emission o MoT Formatted: No bullets or numbering


o Ministry of Environment Formatted: Indent: Left: 0", Hanging: 0.11"
and Forestry
o Ministry of Planning
(BAPPENAS)

5
o Coordinating Ministry of
Maritime Affairs

Feed findings back into 2021 - Leading


green freight policy  MoT
design
MoT
 Supporting Formatted: Font: Bold

o Coordinating Ministry of Formatted: No bullets or numbering


Maritime Affairs Formatted: Indent: Left: 0", Hanging: 0.11"

Establish public- Hold multi-stakeholder Reducing logistics cost 2019 Leading


private partnerships dialogues with industry to from 23.5% GDP in 2014  MoT
through a green develop a vision, to 19.2% by 2019 MoT
freight programme objectives and (President Jokowi’s
programme design target)  Supporting Formatted: Font: Bold

o Coordinating Ministry of Formatted: Indent: Left: 0.01", No bullets or numbering

International trend Economic Formatted: Indent: Left: 0", Hanging: 0.11"


towards more o Ministry of Planning
environmentally friendly (BAPPENAS)
7th Priority

Build capacity and offer practices 2019 – Leading


guidance regarding 2024  MoT
development of joint Private sector is interested
MoT
programmes to promote but still waiting for
fuel efficiency and guidance from  Supporting Formatted: Font: Bold

integrate initiatives, government o Ministry of Energy and Formatted: No bullets or numbering


actions and measures Mineral Resources Formatted: Indent: Left: 0", Hanging: 0.11"
towards a more o Ministry of Economic
comprehensive and
coherent approach to
green freight and logistics

6
Participate in Encourage Indonesian Opportunity to learn 2019 - Leading
regional and companies to join Green lessons and share 2024  MoT
international Freight Asia (GFA) experiences concerning
initiatives activities and apply for green freight policies,  MoT Formatted: No bullets or numbering
8th Priority

the GFA label programmes and activities Formatted Table

Joining Global Green 2019 - Leading


Freight Action Plan 2024  MoT
 MoT Formatted: No bullets or numbering

7
In addition to government initiatives, private sector commitment is an important factor.
Government policies should as much as possible be technology neutral, providing flexibility
to the freight industry to decide what works best for each operator. Meeuws (2014) for
instance, quantified the cost reduction potential of various technology neutral measures in
Indonesian trucking sector. In order to spur effective implementation, MoT should
consolidate measures that promote green freight and logistics under an umbrella regulation.
The Ministerial Regulation No. 69/1993 concerning on Road Freight Transport and its
amendment No. 30/2002 can be improved to implement Law No. 22/2009 concerning
Land Traffic and Transport and Government Regulation (PP) No. 74/2014 concerning
Land Transport as well as support the achievement of MoT’s Strategic Plan (RENSTRA)
2015-2019.
The Government of Indonesia may wish to implement joint activities with international
technical and financial supports. This would allow for the development and implementation
of flagship projects to establish sustainable freight transport infrastructure and process
improvement measures, targeted at establishing replicable best-case examples for broad
application of ‘green’ measures in Indonesia’s freight sector. Such efforts can tie in with the
development of a freight database and robust freight sector indicators (see Annex 5: Freight
Database and IndicatorsAnnex 5: Freight Database and IndicatorsAnnex 5: Freight
Database and Indicators), which is touched upon in Recommendation concerning improve
data monitoring and reporting framework but would support implementation of the full
spectrum of activities related to green freight and logistics.
Indonesia’s freight and logistics sector is at a time of potential transition. As the country
continues to grow economically, it can choose to pursue green freight and logistics measures
that help achieve its climate and energy goals. The case put forth and the recommendations
presented in this White Paper offer guidance on how to make those choices and embrace a
future for Indonesia characterised by economic prosperity and environmental stewardship.

1
References
APERINDO (2018): Green Freight, Presentation held at MoT R&D Workshop.
ASEAN Secretariat (2015): Kuala Lumpur Transport Strategic Plan (ASEAN Transport Strategic
Plan) 2016 – 2025. ASEAN Secretariat, 280.0959.
Asian Development Bank (2012): Indonesia: Transport Sector Assessment, Strategy and Road Map.
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APEC (2016): APEC Energy Deman and Supply Outlook, 6th Edition: Economy Reviews 2016.
APERC, Volume II: Economy Reviews.
Badan Perencanaan Pembangunan Nasional (BAPPENAS) (2009). Indonesia Climate Change
Sectoral Roadmap (ICCSR).
Badan Perencanaan Pembangunan Nasional (BAPPENAS) (2015): Rencana Pembangunan Jangka
Menengah Nasional 2015 – 2019.
Badan Pusat Statistik (BPS) (2015-2016): Data retrieved from https://www.bps.go.id/index, last
accessed 2016.
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Statistik, No. 16/02/Th.XX, 6 Februari 2017.
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Laporan Perekonomian Indonesia 2015.
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Road Transport and Electricity.
Department of Foreign Affairs and Trade (DFAT) (2013): Program Design Document: Pilot
Program for Provincial Road Improvement and Maintenance (PRIM). Australia Indonesia
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Dikun, Suyono (2010): Future Indonesian Railways – An Interface Report Towards the National
Railway Master Plan. Australia Indonesia Partnership, Indonesia Infrastructure Initiative.
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Regional Science Asociation (IRSA) International Conference on 28-29 July 2010 in Surabaya, Indonesia.
Herzog, Bernhard O (2010): Urban Freight in Developing Cities. Sustainable Transport: A Sourcebook for
Policy-makers in Developing Cities, Module 1g. GTZ GmbH.
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Final Report of Scoping Study.
Indonesian Infrastructure Initiative (INDII) (2017). Improving Transport Connectivity Across
Indonesia: Infographic.
International Road Transport Union (IRU) and the World Bank (2016): Road Freight Transport
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Kato, Hironori and Sato Junichi (2006): Urban Freight Transportation Analysis in Developing
Countries: Case Study in Medan, Indonesia.

2
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Leung, Kang Hang (2016): Indonesia’s Summary Transport Assessment. ADB Papers on Indonesia, No.
15, August 2016.
Macharis, Cathy (2005): The Importance of Stakeholder Analysis in Freight Transport. European
Transport, 25-26 (2005): 114-126.
Martalia, Lusi (2016): The Opportunities for Establishment of Logistics Clusters in Indonesia. TU
Delft, master thesis.
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Design, Implementation and Monitoring of Public Policy. Roundtable on Logistics Development
Strategies and their Performance Measurements, February 2015. OECD.
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on 5th Regional EST Forum in Asia, April 2010. CAA.
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3
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paper, TRA Paris 2014.

4
Annex 1: Rail, Seaport, Airport and Inland Waterway
Infrastructure
Rail Infrastructure
To improve competitiveness through greater connectivity and productivity, and to address
inequality by prioritising development in eastern Indonesia, shifting transport from road to
rail and shipping is one of the focuses of the RPJMN 2015-2019. Thus, targets are set for
2015-2019 to improve rail infrastructure.

Capacity
Indonesia’s four independent railway systems are spread between Java (one) and Sumatra
(three), with 5,040 km of total track, of which 3,700 km is in Java. This network is primarily
single-track using a 1,067 mm gauge. Electric rail technology is only found in Jakarta. Across
the country, the fleet of 468 locomotives suffer from inadequate maintenance and
insufficient spare parts, leading to poor performance (BPS, 2016; Martalia, 2016).
The Indonesian public rail system is operated by the Indonesian Railway Company, PT
Kereta Api Indonesia (PT KAI) and carries over more than 20 million tons of cargo, or
around 0.6% of goods transported (Leung, 2016; Woroniuk et al., 2014).

Main Network
According to the World Bank, ‘freight traffic on the Java railway consists mostly of
petroleum fuel, fertiliser, cement, coal, and containers; the South Sumatra network
transports mostly coal; the West Sumatra railway carries primarily coal and cement; and the
North Sumatra railway is used for crude palm oil’.24 The core rail freight commodities are
bulk commodities: coal, cement and petroleum products make up over 90% of tonnage,
while the remaining 10% are agricultural products, fertiliser and container products.

Issues and Challenges


With its miniscule mode share, the rail system is underutilised. The existing railway network
in use is only 4,800 km. In Java, there may be opportunities to reutilise currently unused
portions of the network (Leung, 2016).
Nonetheless, after years of stagnation, volumes have increased over the past few years
(Figure 15Figure 15Figure 10) due to a doubling of rail freight cargo on Java over the past
two years. Sumatra accounts for more than three-quarters of all rail transport, while the rest
is carried by the railway network in Java.

24

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/EXTEAPREGTOPTRA
NSPORT/0,,contentMDK:20458729~menuPK:2066318~pagePK:34004173~piPK:34003707~theSitePK:574066,00.html
#Railways, accessed in February 2016

5
30000

25000
Thousand tonnes

20000

15000 Sumatra
Java
10000

5000

0
2006 2007 2009 2009 2010 2011 2012 2013 2014

Figure 15: Rail Freight in Indonesia, in thousand tonnesRail Freight in Indonesia, in thousand tonnes (Source:
BPS, 2015)

Commercial rail freight services in Indonesia are at a disadvantage compared to road


transport because of short haul lengths (usually between 250 and 300 km) and very low axle
loadings25, which limit the freight volume that can be carried and provide poor net-tare
ratios (the weight of the freight versus the weight of the empty freight wagon).

Pipelines
The government has set a target of adding 3,258 km to the existing railway network (2,159
km intercity and 1,099 km urban), which will require IDR 283trn (USD 23.9bn) of
investment between 2015 and 2019 (PwC, 2016).
There are several new rail projects planned in Indonesia. These include lines in Java,
Sumatra, Kalimantan, Sulawesi and Papua. Among these projects are (Leung, 2016):
■ Ujung Pandang (South Sulawesi) to Bitung (North Sulawesi) line.
■ Trans Papua Railway line connecting Sorong to Jayapura over 595 km of difficult
terrain.

Port Infrastructure
As an archipelago, Indonesia is heavily dependent on sea transport for much of its domestic
as well as for its international trade connections (OECD, 2012). Sea freight is expected to
grow by 4.9 percent this year. The improvement of terminal infrastructure, port capacity and
equipment are cited as the drivers for the growth26.

25 Typical axle loadings on Java are 15 tonnes per axle with some lines able to handle 18-tonnes/axle (low efficiency). Axle
load limits of 25 tonnes could become the new standard for new lines in Indonesia in the future, increasing efficiency.
26 http://www.thejakartapost.com/news/2016/03/04/logistics-providers-eye-double-digit-growth-2016.html, accessed in

March 2017

6
Capacity
Indonesia has more than 100 commercial ports, although many of them cater only to
relatively small vessels on domestic routes, and only a few have container facilities (Leung,
2016). There are four large ports that handle most foreign trade: Port of Tanjung Priok
(Jakarta), Port of Tanjung Perak (Surabaya), Port of Belawan (Medan), and Port of Makassar
(Makassar). One dry port in Cikarang (Bekasi, West Java) has a capacity of 2.5 million
TEUs.

Main Network
Most commercial ports are managed by SOEs, namely Indonesia Port Corporations
(PELINDOs):
 PELINDO I27: Belawan, Dumai, Tanjung Pinang, Pekan Baru, Tanjung Balai Karimun,
Kuala Tanjung, Batam, Sungai Pakning, Sibolga, Malahayati, Lhokseumawe, Tanjung
Balai Asahan, Tembilahan, Gunung Sitoli
 PELINDO II28: Tanjung Priok, Palembang, Panjang, Pontianak, Teluk Bayur, Banten,
Bengkulu, Cirebon, Jambi, Pangkal Balam, Sunda Kelapa, Tanjung Pandan
 PELINDO III29: Tanjung Perak, Banjarmasin, Bima, Gresik, Celukan Bawang, Kotabaru,
Kumai, Tenau Kupang, Maumere, Pelabuhan Lembar, Pelabuhan Sampit, Tanjung Intan,
Tanjung Emas, Tanjung Wangi, Benoa, Tanjung Tembaga
 PELINDO IV30: Sulawesi, Maluku, East Kalimantan, Papua

Issues and Challenges


Inter-island shipping is the prevailing means for distributing goods throughout Indonesia.
The cargo volume carried by inter-island shipping services tops over 300 million tonnes31,
far exceeding the volume of international trade. It is estimated that inter-island shipping
accounts for 60% of the total seaborne cargo in the country. For remote islands like
Sulawesi, the percentages of cargo carried by inter-island shipping are even higher. The
connectivity to the hinterland is constrained due to bad road conditions and high traffic
density.
While the commodity composition differs between domestic and international freight, dry
bulk goods (especially coal) dominate both. Over three-quarters of the total volume handled
in Indonesia's ports moves through the thirty largest ports. The container business in
particular is concentrated in just five ports (Tanjung Priok, Tanjung Perak, Belawan,
Tanjung Emas and Panjang), covering nearly 85% of domestic and 94% of international
container traffic (OECD, 2016b).

27 http://www.pelindo1.co.id/wps/portal/Home/Profile/Wilayah-
Kerja/!ut/p/a1/04_Sj9CPykssy0xPLMnMz0vMAfGjzOL9LM08Db3cDbz9jcLMDRydnbwDHZ2DPY09jIAKIoEKDHA
ARwM8-o18jA2g-vEoIGB_uH4UWAkeFxTkhkYYpCsqAgCPfWK7/dl5/d5/L2dBISEvZ0FBIS9nQSEh/, accessed in
March 2017
28 http://www.indonesiaport.co.id/read/tanjung-priok.html, accessed in March 2017
29 https://www.pelindo.co.id/profil-perusahaan/cabang-anak-perusahaan/cabang-perusahaan, accessed in March 2017
30 http://inaport4.co.id/?cat=58, accessed in March 2017
31 Indonesia Transport Statistics, 2013

7
High logistics costs caused by ports inefficiency remains an issue, e.g. the bottleneck at
Jakarta’s Port of Tanjung Priok, the country’s busiest and most advanced port, that leads to
long waiting times. It takes around four days for containers to leave the port after being
unloaded, which is still around four times as long as in Singapore. According to The
Economist, ‘Many of the country’s 1,700 other ports are not even containerised. Such
backlogs drive up the cost of basic goods. And once [trucks] move the goods out of port,
they are in the twisted, narrow streets of Jakarta, which has some of the world’s worst
traffic’.32
Leung (2016) also highlighted the overburden issue in Jakarta’s Tanjung Priok as it has to
handle about two-thirds of Indonesia’s imports and exports. The report mentioned Tanjung
Priok’s long term container vessels handling capacity expansion plan up to 18,000 TEU to
deal with the current port incapacity to accommodate very large container ship. Finally,
Leung (2016) also made a point in term of regional port competition: Tanjung Priok current
throughput capacity is merely 5 million TEU per annum which is significantly small
compared to the neighbouring Singapore whose yearly throughput capacity has already
reached 31 million TEU.

Pipelines
In November 2015, the government launched its maritime highway programme, which
connects Jakarta’s seaport of Tanjung Priok and Surabaya’s Tanjung Perak in East Java with
major ports in Maluku and Papua, in the eastern part of the country, and to the Riau Islands.
This includes, ‘among others things, the development of 24 commercial seaports across the
country, as well as 1,481 non-commercial seaports’.33
The government will subsidise the freight rates charged by a SOE national sea liner (PELNI)
on the routes covered under the programme in the beginning, so that the service will be able
to run regularly even though the load factor will initially be very low. The subsidised
freighter service facilitates the realisation of the ‘trade follows the ship’ principle. This means
after a few months, the regular freighter service will eventually attract the attention of
shippers, traders and manufacturers and encourage them to use the services. And as the load
factor increases the subsidy will eventually be removed.34
According to Leung (2016), a budget of USD 50bn is needed to build, upgrade and extend
the 24 designated ports namely 5 main and 19 feeders including their supporting facilities.
The report listed the following major improvements plan: Cilamaya Port, West Java;
Makassar New Port; Kuala Tanjung Port, North Sumatra; and Bitung Port Manada.
New dry ports will at least be built in three cities: Tangerang, Semarang and Surabaya to
reduce dwelling time; more dry ports will also be built in eastern Indonesia.35 Furthermore,

32 http://www.economist.com/news/special-report/21693404-after-decades-underinvestment-infrastructure-spending-
picking-up-last, accessed in March 2017
33http://www.thejakartapost.com/news/2016/03/04/logistics-providers-eye-double-digit-growth-2016.html, accessed in

March 2017
34 http://www.thejakartapost.com/news/2015/11/11/editorial-here-comes-sea-toll-road.html, accessed in February 2016
35 http://www.mediaindonesia.com/index.php/news/read/71434/dry-port-kurangi-waktu-tunggu/2016-10-11, accessed in

March 2017

8
some areas are also being assessed to build new dry ports, such as southern Bogor and
Bandung (near container terminal Gedebage).36

Airports
Airports are critical transfer points for passengers and goods alike, both between
destinations and modes. Airports have also taken on critical roles as international and
domestic business centres (Martalia, 2016).

Capacity
There are 297 airports in Indonesia, of which 24 are categorised as first-class airports, 19 as
second-class airports, 118 as third-class airports, two as fourth-class airports, and one as a
fifth-class airport (Martalia, 2016).
Since the enactment of deregulation in 2004, the development of air transport increased into
double digits every year, while the slow development of airports has fallen behind demand
for air transport services (BAPPENAS, 2015).

Main Network
Most of the commercial airports are managed by SOEs: Angkasa Pura I and II. Angkasa
Pura I manages nine airports in eastern Indonesia37, and Angkasa Pura II manages 14
airports (and another six airports starting 2019) in western Indonesia, including two airports
in Jakarta: Soekarno-Hatta International and Halim Perdanakusuma airports.38

Issues and Challenges


Though there are many airports, not all of them have capabilities to handle cargo
movement. South Sulawesi has nine airports, but only Sultan Hasanuddin International
Airport can handle extensive cargo movements. West Java has three airports but these are
dedicated only for passenger transport. Thus in the two regions, logistics depend highly on
road and sea transport.

Pipelines
The rapidly expanding demand for air transport, enhanced by the upcoming ASEAN Open
Skies Policy, already exceeds the capacity of many Indonesian airports, requiring extensions
and new airport developments (Leung, 2016; PwC, 2016).
According to PwC (2016), ‘the government has set a target of IDR 165tn (USD 13.9bn) of
investment in the airport sector, including maintenance of existing airports and construction
of new airports and Air Traffic Control facilities. . . . Investment can still come from a
number of sources. Angkasa Pura I and II are undertaking multi-billion-dollar capital

36 http://mediaindonesia.com/news/read/72843/pembangunan-dry-port-ditargetkan-menyebar/2016-10-19, assessed in
March 2017
37 https://www.ap1.co.id/en, accessed in March 2017
38 https://id.wikipedia.org/wiki/Angkasa_Pura_II, accessed in March 2017

9
investment programmes across more than half of their 26 airports (a mixture of bond and
internal financing). In addition, the Ministry of Transport is building 15 new airports and
revitalising ten existing airports with state funds’. Furthermore, the government also plans to
enhance airport for air cargo in 9 locations (BAPPENAS, 2015).

Inland Waterways
The role of inland waterways for the transport sector, including freight and logistics, is
relatively minor and limited to specific areas in Kalimantan and Sumatra, which have large
rivers. There is more than 10,000 km of navigable waterways along 50 river systems in these
areas.
Investment required for ferry and inland waterways development in accordance with
RPJMN 2015-2019 is summarised as follows (Figure 16Figure 16Figure 11) (Leung, 2016):

Figure 16: Investment for Ferry and Inland Waterways 2015-2019Investment for Ferry and Inland Waterways
2015-2019 (Source: Leung, 2016)

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Annex 2: Intermodal Connectivity Improvement
Intermodal freight movement is defined as the use of at least two or more modes to move a
shipment from origin to destination. Due to high variation in the performance of various
modes and infrastructure within the Indonesian transport sector, there is a significant
potential for improvement. In order to improve intermodal connectivity, the Indonesian
government needs to provide a level playing field for the freight industry, provide an
interoperable high quality transport network of routes, corridors, ports, airports and
terminals and promote their optimised use to reach environmental targets. It is important to
provide incentives to the private sector in order to promote use of intermodal freight
transport. The government should look at establishing a comprehensive list of guidelines or
criteria for identifying priority intermodal projects and a standard approach for evaluating
infrastructure investment proposals. A financing program (for example like the European
Union’s Marco Polo programme) is needed to support companies with incentives and
funding for viable projects to shift freight from roads to greener modes. The five important
elements of green freight intermodal policy are shown in Figure 17Figure 17Figure 12.

Figure 17: Important Elements of Green Freight Intermodal PolicyImportant Elements of Green Freight
Intermodal Policy (Source: Authors)

In order to improve intermodal freight connectivity, the following steps need to be carried
out in Indonesia: understand freight flow and isolate long distance corridors, identify
intermodal friendly freight, carry out a detailed cost and externality assessment, identify
mode shift targets, identify priority intermodal freight projects, develop financing and
funding support, improve technology, carry out capacity building solutions and collect and
assess freight data and benchmarking.

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Annex 3: Online Freight Exchange
An Online Freight Exchange is a website that facilitates effective private or public
communication between carriers and shippers with regard to freight traffic information. The
main objective of the development of a freight exchange is to ensure optimal exploitation of
modern communications and information technology to ensure enhanced synergy among
shippers, carriers and logistics companies. By ensuring better communication, logistics
networks could be used in an optimal way to reduce logistics cost (Figure 18Figure 18Figure
13).
There are several operational models for single mode freight exchanges. However,
Indonesia’s freight movement is highly segregated into different modes such as road,
waterways and rail, with very poor intermodal connectivity between them. Further, road
freight has a high rate of empty trips and poor loading due to short haulage lengths, low
capacity of trucks and the fragmented trucking industry. In this scenario, an online freight
exchange could play a key role in Indonesia in improving intermodal connectivity by
facilitating multimodal operations, reducing empty trips (both urban and intercity) and
facilitating efficient communication among different stakeholders – carriers and shippers,
logistics service providers and also regulatory authorities. Considering continuing
innovations in information and communications technology, multi-modal freight exchange
operation at a country scale with active participation from stakeholders could transform the
entire supply chain in Indonesia.
Among the large variety and quality of freight exchanges across the world, three typical
models of freight exchange39 that could be combined into a single project are described
below.
1. Spot or Auction Market: Spot exchanges provide simple postings of loads and
capacities of trucks, as well as shippers’ requirements. A spot exchange could also
provide a value-added service of matching requirements from different shippers and
truckers. An auction freight exchange could allow auction capability where
competitors compete (bid) for loads based on price and specific requirements.
Modern freight exchanges often provide both options with several other additional
options such as route congestion, vehicle location, weather information, etc.
Matchmaking ensures shippers can find carriers with available capacity on routes to
best suit their transport needs.

2. Closed or Open System: An open freight exchange can be accessed by all the
companies registered with the corresponding service provider. Closed systems focus
only on a few predetermined partners (transport companies, freight forwarders and
shippers). Closed systems are mainly preferred for high volume and high value
contracts. Only partners selected by the customer may participate due to security and
quality issues.

39 A brief note – Online Freight Exchange in Vietnam – Clean Air Asia

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3. Free or Subscription-based Exchanges: Online freight exchanges could be
subscription-based or completely free. Many freight exchanges are trying out various
financial models with additional value added services that are generally subscription-
based, or use advertising fees. Some freight exchanges also charge a percentage of
the agreed fee for the delivery.

SHIPPER SHIPPER SHIPPER SHIPPER SHIPPER

FREIGHT
EXCHANGE/ELECTRONIC
LOGISTICS MARKETPLACE
3PL 3PL

CARRIER CARRIER CARRIER CARRIER CARRIER

Figure 18: Online Freight Exchange (Source: Authors)Online Freight Exchange (Source: Authors)

The main objective of developing an online freight exchange is to increase truck load factors
and reduce empty trips. Many companies see freight exchanges as an opportunity for
networking and business development, as an incentive to perform better because of
improved monitoring of business practices and to reduce administrative overhead costs
regarding billing and payments. Small and medium enterprises may also benefit from better
technology and software without having to invest directly in improvements. For
government, this is a win-win scenario as it will reduce freight inefficiency. Data from freight
exchanges could be used by the government for benchmarking companies based on
business risk, operation practices and environmental performance, which could ultimately
lead to development of a sector-specific recognition scheme. The government could use a
freight exchange to increase quality control by allowing freight forwarders to choose
companies based on risk and create a fair business market with a level playing field for small
and medium enterprises. The government could also use data from an online freight
exchange to understand freight demand and pricing bottlenecks. Reliable data on this is not
often otherwise available. Improved and transparent communication between stakeholders
could also create consolidation opportunities.
Since online freight exchanges replace the brokers’ link among shippers and carriers,
traditional brokers may resent the development and use of an online freight exchange. Thus,
in order to develop an effective freight exchange, a feasibility study needs to be carried out
to identify stakeholders, different platforms, local legislation and regulations, financing the

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development and operation of a freight exchange, etc. It is important to analyse the
intermodal freight system to identify physical and information exchange choke points.

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Annex 4: Improving Urban Freight
The main objective of consolidating urban freight movement is to induce changes in vehicle
trips, vehicle kilometres, total fuel consumed and vehicle emissions.
Recommendations for urban freight are below.
■ Develop a vision for urban freight and develop urban freight policy and link it with
national sustainable transport policy, master plan and trade policy and customise for
each city for specific unique requirements.
■ Optimise land use strategy for urban green freight movement.
■ Improve urban freight data, indicators, modelling and tools.
■ Overcome market failure of technologies especially in cities by access to low cost
finance for shippers and carriers.
■ Develop partnerships with the private sector.
■ Carry out large scale city-based experiments.
■ Develop an urban freight recognition programme.
■ Develop urban intermodal transfer facilities and other infrastructure.
■ Develop city-based traffic and parking regulations.
■ Conduct a feasibility study for development of urban consolidation centres.
■ Off-peak delivery scheme.

Table 13: Avoid – Shift – Improve Strategies Applicable for Urban Freight (Source: Authors)

Avoid Shift Improve  Crosscutting


 Enhanced building  CargoTram  Appointments and  Create a Freight
codes  NMT freight pricing strategies at Advisory Committee
 Freight clusters distribution ports (FAC)
(freight villages)  Using capacity of  Developing network  Create a Freight Quality
 Increase storage public transport of ecommerce pickup Partnership (FQP)
capacity at delivery points  Designate a freight
points – to permit  Energy efficient person at key agencies
delivery of larger warehouses  Developing Urban
loads  Exclusive truck lanes Logistics Plans (ULPs)
 Integrating freight  Eco-driving  Environmental justice
into land use
planning  Extend opening  Foster an Industry-Led
hours of premises for Best Practices
 Introduce fuel tax collections and Dissemination Program
 Loading and deliveries  Freight Company
parking restrictions  Freight exchange Consortium
 Low emission zones  Freight parking and  Freight Operators
 Relax just-in-time loading zones Recognition Scheme
replenishment  Implement truck  Labelling and
schedules to permit scrappage scheme Certification
greater load
consolidation  Pick-up/delivery to  Mandatory GHG
alternate locations reporting
 Restriction on truck

15
Avoid Shift Improve  Crosscutting
idling  Real-time  Noise programs/
 Road pricing/ information systems regulations
incentives  Relocation of large  Urban freight
 Urban traffic generators information and maps
consolidation  Reschedule deliveries  Urban freight policy
centres to inter-peak periods
 Vehicle size and and evening / night
weight restrictions  Retrofitting
aerodynamic
technologies to
improve fuel
efficiency
 Retrofitting rolling
resistance
technologies to
improve fuel
efficiency
 Ring roads for
through traffic
 Subsidies for low
emission delivery
vehicles
 Subsidising use of
low sulphur fuel
 Telematics
 Time access
restrictions
 Train drivers in the
techniques of fuel
efficient driving (eco-
driving)
 Use small delivery
vehicles

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Annex 5: Freight Database and Indicators
Freight data requirements to support Indonesian national freight policy making is quite wide
and covers a variety of freight-related decisions such as business processes, including trade,
planning, design, construction, operations, and maintenance of freight infrastructure; and
environmental, energy & safety impacts. Considering stakeholders’ diverse requirements, a
comprehensive freight database and indicators should be developed for evaluation and
monitoring purposes. A freight database and indicators need to be collected to answer the
following questions: what is freight demand (how much, where it is going), what is the
relative use of different transport modes (tonnes, TKM and value transported), and how
efficiently is freight being transported. This data could be collected by aggregating insights
from the following surveys – carrier surveys, distributer surveys, shipper surveys, receiver
surveys, freight informatics, commodity flow survey, origin-destination survey, axle load
survey, congestion survey, etc.

Table 14: National Freight Data vs. Freight Performance Indicators (Source: Authors)

National Freight Data Freight Performance Indicators


 Descriptions of freight shipped or received;  Freight transport intensity (TKM/GDP)
 Shipment origins and destinations;  Freight transport mode share (tons, TKM and
 Shipment weight; total value of freight moved)
 Freight volumes;  Heavy and Light freight motorisation index
 Carrier used;  Freight cost/TKM for different modes
 Railroad tonnage data;  Loading – Productivity (TKM/fuel), utilisation -
 Commodity inventories; the ratio of the capacity actually used to the total
 Licensed carrier data; capacity available, average loading and empty
trips (%)
 Vehicle inventories;
 Handling factor - ratio of tonnes-lifted to weight
 Business directories;
of products produced / consumed
 Employment by freight activity;
 Freight transport emissions per TKM or energy
 Import and export statistics; consumption in relation to output measures as
 Economic data; tonne-km
 Transportation infrastructure inventory and  Fuel consumption/vehicle kilometre travel
condition; (MJ/Trucks km) for different types of trucks
 Pipeline volumes;
 Traffic volumes;
 Distribution warehouse truck traffic data;
 Travel time, speed, and delay data;
 Traffic bottlenecks;
 Oversize and overweight permitting and routing
data;
 Safety data;
 Fuel statistics & emissions data
 Number of applications for new operating
licenses

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Items from named contributors do not necessarily reflect the views of the company/the editors.

Publishedby
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

Registered offices
Bonn and Eschborn, Germany

Lake Rajada Office Complex


(16th floor)
New Ratchadapisek Road, Klongtoey,
10110 Bangkok

www.TransportAndClimateChange.orgwww.TransportAndClimateChange.org

Authors:
Friedel Sehlleier
Karmini
Monica Kappiantari
Aditya Mahalana
Joko Purwanto
Setijadi

Reviewers:
Tali Trigg
Sudhir Gota
Stefan BakkerTali Trigg
Sudhir Gota
Stefan Bakker

Editor:
Anders ImbodenAnders Imboden

Picture credits
Friedel SehlleierFriedel Sehlleier

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Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH

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