The Role of Maritime Logistics in the Local Economy Development in Island Regions of East Indonesia

Abstract

The study analyzed the role of maritime logistics in the archipelago’s economic development and the impact of air externalities arising from the sea transportation sector. The method uses a dynamic system to measure the causality relationship between maritime logistics and regional economic indicators. The maritime logistics economic sub-systems consist of loading and unloading goods, the number of port workers, loading and unloading costs, sea transportation costs, and logistics service activities, namely land connections and expedition services, including stuffing, packaging, and packing. The results of the first scenario showed that reducing sea transportation costs could reduce the inflation rate and encourage an augmentation in the rate of change of GRDP. The second scenario proved that increased economic growth positively affects the monetary value of maritime logistics and promotes the gain in the value of externalities and environmental costs from air emissions generated from the sea transportation sector. The third scenario revealed that the raise in the number of goods in the long term has a negligible effect on reducing sea freight costs.

Keywords

maritime logistics / externality / local economic / islands

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