In the Face of Recession, Indonesian Logistics Sector Has a Chance to Grow

So far, logistics sector has managed to grow despite the social and economic issues arising from the pandemic. It is unsurprising because the sector, which involves sourcing, shipping or distribution, and warehousing, becomes one of the pillars of both the manufacturing industry and the service industry.

As long as humans consume goods and services, the sector is here to stay. The sector keeps growing despite any dreadful social and economic condition, including during the COVID-19 pandemic.

Statistics Indonesia and Supply Chain Indonesia (SCI) estimated that in 2021, the logistics sector, which comprises transportation, warehousing, and distribution (including courier services), contributed 676 trillion rupiahs to Indonesia’s gross domestic product (GDP). The logistics sector’s growth was attributed to the higher national consumption and the development of infrastructure across the country.

This consumption, however, made up a large portion of this growth. This is understandable considering Indonesia’s high level of household consumption, thanks to its population of 270 million.

And at the same time, the new e-commerce industry had also started to grow even though overall, the transportation sector made the greatest contribution to the logistics sector.

Over the course of 2021, the transportation sector alone made up IDR 548.8 trillion out of IDR 676 trillion the logistics sector contributed to the national GDP.

SCI predicted that in 2022 the logistics sector will see a 1.08% growth over 2021. It is estimated that the market value of the sector will reach IDR 699.1 trillion.

“The logistics sector’s growth in 2022 will be driven mainly by the performance of the manufacturing industry, particularly non-oil and gas, followed by the agriculture, forestry, and fisheries sectors; trade sector; construction sector; and mining sector,” stated the Chairman of SCI, Setijadi.

In parallel with its potency, the competition in the logistics sector is getting fiercer as both domestic and foreign investments keep coming in. With the development of infrastructure such as toll roads, railroad, and docks, the logistics sector is set to attract many investors.

Moreover, the government has improved the performance of national logistics as it issued the Presidential Instruction Number 5 of 2020 on National Logistics Ecosystem Management. 

The government seeks to promote more efficient national logistics through digital transformation, collaboration, and synergy by implementing Supply Chain Management (SCM). The successful implementation of SCM can be achieved through collaboration between involved parties including the government, logistics service providers, owners of goods, operators and providers of cargo port services, and shipping companies.

2022 Logistics Outlook

The Secretary General of Indonesian Logistics and Forwarder Association (ILFA), Akbar Djohan, has recently stated that Indonesia’s logistics sector will see continued growth despite all the challenges faced. Akbar explained that there are two areas of growth –

the first is the integrated and digitalized national market and the second is the logistics, which becomes the main and important driver of the national revenue.

To address various challenges in 2022, logistics service providers should employ the following two strategies. The first strategy involves digitalization of services by understanding and optimizing the use of advanced technologies.

The second strategy encourages logistics service providers to apply good corporate governance. These two strategies also require the logistics service providers to organize capability building for their talents to boost efficiency and effectiveness in their day-to-day tasks.

One of the largest companies in the sector is PT Serasi Autoraya (SERA). The subsidiary company of PT Astra International Tbk, SERA is renowned for its transportation and logistics solutions. First established to provide vehicle rental solutions, it has become the largest, industry-leading transportation provider.

With its Astra Fleet Management Solution (AstraFMS), SERA provides businesses in Indonesia with IT-based comprehensive solutions for managing fleet vehicles. The service caters to any fleet management needs, be it passenger vehicles or goods vehicles.

For 32 years, this Astra Group company has continuously created innovations to improve the quality of its services. SERA’s core businesses include used car dealer, car rental, and through its SELOG brand, courier service.

SELOG now also has a warehouse management system (WMS) in place. WMS enables continuous tracking of received, picked up, delivered, and detained goods as well as damaged goods and completed shipments. WMS also allows customers to monitor inventory, including low-stock goods in real time. 

SELOG offers various end-to-end logistics services, including an express courier solution with two categories of service: standard services and solution services. The standard services include the same-day service, the next-day service, and the regular service, 

while the solution services provide two tailored services you can always count on: VPD (valuable, perishable, and dangerous goods) service for document delivery and the package delivery service for items that are too large and heavy to be shipped using regular cargo services. For more information, click here.