Indonesia Transportation and Logistics Industry Continued Economic Growth Momentum Supports Transport Infrastructure Investment and Development

Frost & Sullivan
2016-03-03 19:15 3627

JAKARTA, Indonesia, March 3, 2016 /PRNewswire/ -- Frost & Sullivan is forecasting the Indonesian logistics industry to grow 15.4 percent in 2020. Gopal R, Global Vice President of Transportation & Logistics Practice, Frost & Sullivan, said the growing economy is due to high domestic consumption, growth in export of manufactured products, and improvement in infrastructure investment coupled with regional trade integration to drive growth.

He added that growth drivers of logistics industry are also derived from improved maritime trade connectivity due to its geographical location on global key trade and increase in e-commerce trade.

Gopal R also said that the ASEAN Economic Community (AEC) unlocks untapped opportunities for Logistics Service Providers (LSP) through business expansion in the region. He said currently Indonesia has limited logistics infrastructure, average productivity at ports, and above average carrying cost.

However, there are several growths through the ASEAN Economic Community (AEC) logistics network, such as network with cutting-edge facilities, infrastructure investments, value proposition to meet customers' needs, high quality cargo handling, and training for logistics professionals.

Key Industry Trends

Gopal R said that the Indonesia transportation and logistics industry continued economic growth momentum supports transport infrastructure investment and development. He said that government spending in public infrastructure along with the private sector is expected to reach around 15 percent of growth domestic product (GDP).

Gopal R also said that the manufacturing industry is to grow around 6.4 percent in 2016. He said that labor intensive segments such as palm oil, cacao, wood, rubber, fishery and mineral will become a strong growth engine for the manufacturing industry in 2016.

He said that higher consumer spending on consumer electronics which estimated around USD 1.9 billion with potential annual growth around 12 -13 percent annually would be potential domestic and export segment in 2016.

The Way Forward

Facing the current logistics trends, Logistics Service Providers (LSP) must move forward to a new business model to stay profitable. Gopal R said the potential industries to focus in 2016 include Infrastructure, Manufacturing, Automotive and Electronics.

Meanwhile, he said the potential services to focus on in 2016 include air cargo, warehousing, multi-modal movement, and E-commerce.

Further he said that the key to moving forward through integrated SEA logistics network include competitive international gateway, development of an effective transport network and systems, improved national regulatory framework, efficient freight movement and planning, and increased skilled manpower for logistics industry.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants. Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.

  • The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
  • The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.

For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?

Contact Us: Start the discussion
Join Us: Join our community
Subscribe: Newsletter on "the next big thing"
Register: Gain access to visionary innovation

Media Contact

Shena Agusta
Corporate Communications Executive - Indonesia
Phone: 0856 887 0992

Source: Frost & Sullivan
Related Links: