The Challenge of Globalization for the Logistics Industry: Evidence from Indonesia

Abstract

Abstract Trade liberalization is increasingly accompanied by efforts to liberalize logistics services as nations have realized the importance of logistics services in achieving economic progress and integration. However, liberalization also brings with it costs and challenges. In this light, this article tries to assess the progress in implementing the liberalization commitments and their implications on the logistics sector using Indonesia as a case study. The implementation of Indonesia's liberalization commitments has been slow and cautious. Substantial barriers to trade in logistics services still exist, constraining the path toward economic progress and integration. Its logistics sector is also unlikely to benefit from trade liberalization, except in the maritime, air transport, and cargo-handling services. Indonesia's experience could be applicable to emerging nations that are in the process of liberalizing their respective logistics services industries, as this study contributes to the understanding of the liberalization process.

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