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SeamlessChainLogisticsbetweentheNetherlandsandIndonesia
1. Introduction
2. Theconceptexplained3. Thetriplehelixconstruction4. Nextsteps
1. Introduction
TradebetweenIndonesiaandEuropehasincreasedoverthelast5yearswithmorethan25%toavalueof28billiondollarseachyear.ThegrowthintradevolumebetweenIndonesiaandEuropeis
expectedtocontinueandevenfurtherincreaseasaresultoftheeffectuationoftheASEANfreetradezonefrom31December2015onwards.Withamarketofover250millionpeopleIndonesiaisthelargesteconomyinSoutheast-Asiaandstrategicallypositionedtodevelopintothe‘industrialand
logisticspowerhouse’oftheregion.TradebetweentheNetherlandsandIndonesiahasbeensubstantialovertheyearsandexceedsalreadymorethan2.5billiondollarsonanannualbasis.ThemostimportantindustrialandserviceindustrieswithinIndonesiahavealreadystrongconnections
withtheso-called‘topsectorsofindustry’intheNetherlandsasshownbelow.
Source:BuckConsultantsInt.
Severalprivatepartiesandregionalauthoritieshavetakentheinitiativetostrengthentheseintense
relationshipswiththeconceptofSeamlessChainLogistics(SLC),usinginlandlogisticshubs(dryports)withinanintegratedlogisticssystem.
Theaimistoenlargethecurrentamountofshipments(asdetailedfurtheroninthisdocument),butmoreimportanttostrengthentherelationshipsbetweenindividualcompanies,groupsofcompanies
gatheredwithinanintegratedbusinesscommunity.Importantistoinvolveknowledgeinstitutions
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alsoaswellasgovernmentalbodiesinasocalled‘triplehelix’inthiscasewithinaninternational
context.
2. Theconceptexplained
Introduction
Moreandmorelogisticchainsofcompaniesandgroupsofcompanieswithinachainoperateinaworldwideenvironmentinwhichthecompaniesinvolvedoccupyseveralstrategicpositions.Below
wedescribethekeyelementsofthisconcept.
Asworldtradeisgrowingfasterandfaster,thedistancesmanufacturedgoodshavetoaccomplishareincreasing.Thus,logisticsserviceproviderswillhavetocreateamorereliablesupplychainandtransportationnetworkbyintegratingitasmuchaspossible..
Integratingdifferenttransportmodes(shortseashipping,inlandshipping,rail,highways)by
combiningthecargoflowsina‘seamlessoperatingsystem’runbya(orseveral)virtualcontroltower(s),enableslogisticserviceproviderstoimprovereliability,increaseefficiencyandreducecosts.Becausethiswillenabletheircostumerstoavoidtherelativehightransportcosts(handling
charges,butalsostockkeepingcosts)ofseaports,wherecongestionisslowingdownthewholelogisticsprocess..
Inpractisethebusinessconceptof‘SeamlessChainLogistics’istoextendtheseaterminalgateintothehinterlandbyconnectinginlandportsdirectlywitheachother.Thiswillleadtosubstantial
benefitsintermsofmodalshift,logisticsperformancesandeconomicregionaldevelopment(employment,newbusiness).Thegraphbelowshowsfirsthowthecurrentsupplychainworksandwhichelementsincreasetherelativecostsofthesupplychain:
1. Transporttothebusinesssitessurroundingtheinlandterminal
2. Terminalhandlingcharges3. Transporttothedeep-seaport4. TerminalHandlingchargeswithintheseaport
5. TransportationfromforexampleAsiatowardsEurope6. Terminalhandlingchargesintheseaport7. Stockingintheport
8. Transporttotheinlandregion9. Terminalhandlingchargesandenddistribution
Intheconceptof‘SeamlessChainLogistics’,whichwasinventedalreadyyearsagobutisnowbeing
implementedworldwide,wereduceatleast4steps(1,4,6,7).Thiswillreducecostontheothersteps,asbusinesssitesintheinlandportsarelessexpensiveandsituatedclosertothecostumerandconsumermarkets.Atthesametime,inlandportscanofferabroaderrangeofservicesrelatedto
thebusiness.
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Source:BuckConsultantsInt.
AdvantagesofSeamlessChainLogistics
Someoftheadvantagesof‘SeamlessChainLogistics’forinlandportsandtheirsurroundingarea’sare:
• ‘freetradezones’withclearandfastcustomsserviceso Experienced,specialized,proactiveandflexible
o VATdefermentandbondedwarehousepossibilitieso Beneficialregime:toobtaincustomslicenceso Rulingpolicy:toobtainrulingsystemformafromcustoms
• Lesscongestioninlargeseaports,respectivelyJakartaandRotterdam• UsingtheinlandportsaspointofentrytoandfromtheEU• Contractmanufacturingregion(inthecaseofCikarang)forcontractmanufacturing
activities,butalsofortheexportofhighendconsumermarketproductstotheEU
Expectedregionalimpact
Basedonseveralcalculationsandexpectedinvestmentsoverthefirstfiveyearstheintentionofthesecommunitiesistoboosttheeconomywith:
• 350.000containerhandlings• 800additionalworkforce(andindirectanother350)
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3. Thetriplehelixconstruction
Belowtheintendedco-operationisdescribed
LogisticsValley(basedinTheNetherlands)
LogisticsValleyisatriplehelixconglomerateoftreelogisticshotspotsinthesouthernpartoftheprovinceofGelderland.Itinvolves:
• Regionalauthorities,theProvinceofGelderland• Privatebusinesspartners
o LogisticsValley(representingseveralLogisticsHotSpotswithinTheNetherlandswhereover1000companiesaresituated).
o SeveralambassadorsofLogisticsValleywillbepartofthedelegationoftheProvince
ofGelderlandvisitingIndonesiainNovember2016duringthemissionofPMMarkRutteofTheNetherlands
• Knowledgeinstitutes:HANinstituteofappliedscienceandseveralROC’s
ThisRegionaimstobethelogisticsporttothehugeEuropeanmarket.Itwasstudiedthatthisregion
isthebestsituatedfortheorganizationofEuropeandistributionactivities.Inordertoenlargethisfunction,theregionbuildsinternationalconnectionswithhighlyvaluedbusinesspartners.BelowfindagraphofLogisticsValleyandsomeofitsinternationaloperatingcompanies.
Source:BuckConsultantsInt.
CikarangDryPort(CDP,basedinIndonesia)
Indonesiawantstoreducetherelativeindependenceofimportofgoodsbyattractingforeigninvestors(forinstancewithintheautomotive,manufacturingandfoodprocessingindustries).TheCikarangDryPortanditsinvestorsarecreatingabroadspectrumofindustryandlogisticsinKota
Jababeka,anindustrialdevelopmentofover5000hectares.BelowisagraphofthecurrentsituationinWestJavaandthestrategicpositionofCDP.
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Source:Jababeka(2016)
Severalimportantbusinesspartnershavealignedtheiractivitiesinordertobuildthisuniqueinternationalsystem.Themainpartiesinvolvedare:
Indonesia
• Regionalauthorities:ProvinceofWestJava• PrivateBusinesspartners
o CikarangDryPorto Jababeka
• Knowledgeinstitutes,PresidentUniversity
4. Nextsteps
InNovember2016aLoI(LetterofIntent)willbesignedbyrepresentativesofthepartiesandorganizationsinvolved.Itwillbethestartingpointintheintendedco-operation.
TheLoIwillfocuson:
• Clarifytheconcept
• Bringingmarketpartiestogetherinmatchmakingevents• Howtodobusinesstogether
Afterwardsseveralactionswillbecarriedoutsuchascostcalculations,estimatingthecapacityof
warehousesneededonbothsidesandplanningschedulesforrealization.