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Indonesia opens bonded logistics centres 11 March 2016

Aiming to reduce supply chain costs

As part of Indonesia's second economic stimulus package that was unveiled on 30 September 2015, the country has formally opened 11 bonded logistics centres.

The bonded logistics centres aim to improve supply chain efficiencies, targeting the country's high logistics costs. The official opening ceremony for the 11 centres, which are mostly located on the island of Java, was held in Jakarta.

At a bonded logistics centre imported goods can be subject to certain tax incentives. Currently, however, the bulk of goods imported by Indonesian companies are stored in Singapore or Malaysia. This causes logistics costs to rise steeply as storage costs in Singapore and Malaysia are high.

Indonesian authorities have ambitious targets to see the existence of 50 bonded logistics centres across the country. Contrary to the bonded warehouse system (which is only used by the owner), bonded logistics centres can be used by other companies.