Analysis of Indonesia’s Position in the 2023 Logistics Performance Index

Abstract

The Logistics Performance Index (LPI) is an indicator for measuring the performance of the logistics sector, developed by the World Bank since 2007 and widely accepted globally. The LPI is based on surveys conducted with logistics professionals about their perceptions of a country's logistics performance. There are six indicators in the LPI: customs, infrastructure, international shipments, logistics quality, tracking and tracing, and timeliness. The LPI score is derived from these six indicators using principal component analysis. This study explains the LPI and Indonesia's position in the latest 2023 LPI. In the 2023 Logistics Performance Index (LPI), Indonesia dropped 17 spots to rank 63rd out of 139 countries. This represents a decline from its 2018 position at 46th, with a decrease in score from 3.15 to 3.0. The areas where Indonesia faced the most significant performance drops were in "Timeliness" and "Tracking & Tracing," both crucial for efficient logistics operations. Indonesia's fall contrasts with several ASEAN neighbors that made improvements, such as the Philippines (which climbed 13 places to rank 43), Malaysia (up to 31), and Singapore, which advanced to the top of the global ranking. Analysts highlight that Indonesia's logistics issues stem from regulatory inefficiencies, infrastructure gaps, and operational delays. Improvements are needed in areas such as infrastructure development, logistics management, and better integration with global supply chains. Efforts to address these challenges, including the implementation of the National Logistics Ecosystem (NLE), aim to simplify logistics processes and enhance the country's performance in future LPI rankings. In addition, experts suggest that improving regulatory frameworks, upgrading infrastructure, and streamlining operational processes could help Indonesia enhance its logistics performance in the future. There is also ongoing discussion about the need for better coordination and investment in logistics technology.