High Cost of Logistics and Solutions

The logistic efficiency system and excellent performance is a critical factor from sustainable economic development because there is a positive influence between the Logistics Performance Index (LPI) and PDB.The purpose of this paper is to know and see the cause of high logistics cost in Indonesia and how to overcome the high logistics cost.The study used qualitative research done by library research method, The results found that the logistic cost is expensive due to many factors: 1) Unsupported infrastructure, 2) The logistics system is not good; 3) the number of supply product is distributed evenly; 4) Unsupported and overlapping regulations; 5) Inadequate human resources; and 6) Innovation technology is not comprehensive yet.The concrete action that can be done by the government to overcome the high logistics cost is infrastructure improvement to build the commodity based on logistics, regulation improvement, and provide the facility of Economic Packet Policy (PKE).