Jakarta (VNA) – The founder and Chief Executive Officer of Supply Chain Indonesia (SCI), Setijadi, has urged caution over the potential spillover effects of escalating tensions between the US and Venezuela, warning that geopolitical instability in energy-producing countries could disrupt global logistics despite no immediate impact on Indonesia’s trade routes to South America.
Setijadi said geopolitical shocks in oil-producing nations risk triggering volatility in global crude prices, which would ultimately raise fuel costs and international shipping expenses, according to the Tempo.co.
Such dynamics, he noted, can create new pressures on energy supply security and global supply chain efficiency at a time when Indonesia is seeking to diversify its export markets, particularly in South America.
He warned that shipping costs could rise on trans-Pacific routes as well as routes transiting major global logistics hubs, driven by higher bunker fuel prices and additional surcharges imposed by shipping lines.
These cost increases could undermine the price competitiveness of Indonesian exports, especially manufactured goods and medium value-added products that are highly sensitive to logistics expenses.
Setijadi also highlighted the risk of declining shipping reliability amid heightened global tensions. Adjustments to shipping routes, cargo consolidation practices, and port calls by shipping companies could extend delivery lead times and increase supply uncertainty for South American destinations such as Brazil and Peru, as well as other markets.
According to him, buyers in the region are already showing signs of caution, including tightening contract clauses, requesting greater delivery flexibility, and seeking stronger guarantees of supply continuity amid growing global uncertainty.
In response, SCI has recommended that Indonesian exporters strengthen supply chain resilience by diversifying shipping routes and logistics partners to reduce dependence on single corridors or service providers.
Exporters are also advised to proactively review and adjust contract provisions, particularly those related to delivery schedules, logistics cost adjustments, and force majeure clauses.
Setijadi also said such measures are crucial to maintaining long-term commercial relationships with overseas buyers as global dynamics continue to shift rapidly.
He added that exporters should also improve inventory planning and lead time management, including the use of buffer stocks or safety lead times for recurring contracts, to ensure service reliability and preserve market confidence despite potential disruptions to international transport.
The expert emphasised that rising geopolitical tensions should not derail Indonesia’s efforts to expand exports to South America. Transparent communication with trading partners and stronger supply chain risk management could instead enhance Indonesia’s standing as a reliable and competitive trading partner in the region./.
