An overview of inland freight transportation in Indonesia based on vehicle operating cost

Abstract

From an economic point of view, the high cost of freight transportation is indicated to increase the production of cost and weaken the industrial sector's competitiveness. Indonesia's logistic cost is the highest in Southeast Asia, which has absorbed more than 26% of the Gross Domestic Product (GDP). The operational costs of truck transportation, as the major freight transportation in Indonesia, is the highest compared to the operational cost of trucks in Vietnam, Thailand, Malaysia, and China. This paper introduces the issues related to the costs of inland freight transportation in Indonesia. The results show that high operational costs are caused by geographic, trip length, congestion, imbalance of freight movement, waiting time and the disutility of truck. Meanwhile, fuel consumption is a major component of the high transportation costs.