TRANSPORT & LOGISTIC MARKET IN INDONESIA
The Indonesian Logistics Association (ALI) is optimistic. It is hoped by the ALI that the logistics sector could post double digit growth rates in 2016 – in the region of 10-12%. The domestic market size is estimated at $163.4 billion.
Indonesia joins ASEAN Economic Community (AEC). By joining the AEC, cross-border cargo should become an easier prospect in Indonesia – a very pleasant prospect for logistics suppliers. One major positive aspect of Indonesia’s AEC membership is a further reduction in logistics costs.
As much as $450 billion is being poured into essential infrastructure upgrades until at least 2020. Connectivity and the nation’s economy go hand in hand. As much as 17% of an Indonesian company’s total expenditures are absorbed by logistics. Transportation costs account for 24% of Indonesia’s $861 billion economy, hence the government’s colossal infrastructure spending program.
The Asia Times report 2017 is set to be a blisteringly active year for Indonesian infrastructure construction. A wide range of projects are slated to begin or be completed this year including 55 seaports and 13 airports. Jakarta is planning on allocating an extra $30 billion to its country-wide projects across the next 12 months. Highway and toll road construction is essential for transport and logistics in Indonesia.
According to the report by Ken Research, a noteworthy CAGR of 7.9% in revenue in Indonesia Logistics Market is expected in next 5 years till 2021 and warehouse space requirement is estimated to be increased by over 240,000 sqm in the year 2021.
Freight Forwarding is expected to be the fastest growing segment in future with an expected CAGR of 9.2% from 2016-2021. The express delivery logistics has witnessed a tremendous growth in Indonesia and global E-commerce logistics costs are expected to have a 17% CAGR through 2020.
Indonesia Logistics Market Outlook 2023
Indonesia will spend over USD 450 billion for infrastructure projects until 2030 including toll roads, new intercity road, transport projects (MRT, LRT, High Speed Train, Trans Sumatra, Trans Papua, Trans Sulawesi, Trans Kalimantan), new airport, new seaport and terminal, etc. Some of the projects are ready to operate by 2019.
The strategic position of Indonesia in combination with enormous infrastructure investments brings Indonesia forward to become one of the world’s logistic hotspots. Logistics sector is the backbone of development and the growing logistic sector indicates a healthy trend of economic growing.
Indonesian government has released the blueprint for National Logistics System Development (Sistem Logistik Nasional / SISLOGNAS) to strengthen national connectivity, through the development of economic corridors. This blueprint not only optimizes the development of integrated physical infrastructure but also optimizes digital aspects to be able to compete in the era of the Industrial Revolution 4.0. According to the report by Ken Research, a noteworthy CAGR of 7.9% in revenue in Indonesia Logistics and Warehousing Market is expected to reach USD 74.9 billion in terms of revenues by the year 2023
The Indonesian Logistics Market is segmented by function (freight transport, freight forwarding, warehousing, courier, express, and parcel (CEP), value-added services, and cold chain logistics)