Problems in global maritime trade that trigger rising sea logistics costs are feared to affect the demand for export products in destination countries. Business actors do not have many options to deal with this situation. Chairman of the Association of Indonesian Export Companies (GPEI) Benny Soetrisno said the tangled threads of global trade that had been felt since the end of 2020 often made the delivery of goods late. The problem of the availability of containers and ship space makes shipping costs can swell up to 5 times.
"Because the export of some industrial products uses FOB [freight on board], it's back again whether the buyer wants to bear it or not because they arrange the costs," said Benny, Tuesday (23/11/2021).
This situation, said Benny, makes importers who resell their goods make price adjustments. The selling value of products exported from Indonesia tends to be the same, except for products with high imported components.
“Product prices that start to rise at the consumer level will trigger global inflation. Purchasing ability may decrease. If so, in the long term, the order for Indonesian products could also go down," he said.
However, he believes that the competitiveness of Indonesian export products in destination countries has not changed much, considering that the tangled thread of global logistics is not only felt by Indonesia.
The United Nations Conference on Trade and Development (UNCTAD) in its report on maritime trade said the spike in global logistics costs could trigger an increase in the price of imported goods by 10.6 percent and consumer goods up 1.5 percent. percent globally.
Greater risk threatens small and developing countries (SIDS) with the increase in the price of imported goods reaching 24 percent and at the consumer level rising 7.5 percent. UNCTAD simulations project this situation to take place in 198 countries until 2023.
The goods at the consumer level that will be affected by logistics costs are imported finished goods and manufactured products made from imported raw materials.
Five product groups that experienced significant increases include computers, electronics, and optical products (11.4 percent); furniture (10.2 percent); textiles and textile products (10.1 percent); rubber and plastic products (9.4 percent); and pharmaceutical products and electrical equipment (7.5 percent).
Coordinator of Deputy General Chair III of the Indonesian Chamber of Commerce and Industry (Kadin) for Maritime, Investment, and Foreign Affairs Shinta W. Kamdani said the issue of global logistics costs bothered national exporters because it had an impact on increasing export costs and decreasing competitiveness. This is most felt when the cost burden exceeds the buyer's budget in the export destination country.
“Generally, our exporters export using the FOB system so that the cost of export logistics is borne by the buyer. If logistics costs are beyond the ability to pay, usually exports will be postponed or rescheduled until logistics prices are more affordable, even cancelled, "said Shinta.
He said that this case is quite common in manufacturing exports, especially in products that have not entered the global value chain (GVC) with long-term supply contracts.
According to Shinta, this is also what makes manufactured exports tend to grow slower than exports of raw commodities, despite the high demand in global markets.
He also said that national exporters did not have many solutions to solve this problem. The only strategy being implemented, said Shinta, is to intensify communication with importers or buyers to determine delivery schedules and financing.
"Communication with logistics service providers is also carried out to ensure the smoothness and availability of containers so that exports continue to run according to the agreement with the buyer," he said.