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Various groups and institutions project that Indonesia’s economy will continue to grow in 2024, following the achievements of 2023. However, economic growth in 2024 is predicted to be slower than in 2022.
The government predicts the national economic growth of 5.1 percent in 2023 and 5.2 percent in 2024. Meanwhile, Bank Indonesia estimates it to be in the range of 4.7 to 5.5 percent.
The World Bank projects Indonesia's economy to grow by 4.9 percent this year, while the IMF and Asian Development Bank (ADB) have also made similar growth projections of 5.0 percent.
Regarding the national economic growth projection, Setijadi, Chief Executive Officer of Supply Chain Indonesia (SCI), said that the logistics sector can potentially drive economic growth amid the slower pace.
The potential of the logistics sector to drive economic growth is seen from its contribution to Indonesia's Gross Domestic Product (GDP) in recent years.
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According to data from the Central Bureau of Statistics for Q3 2023, SCI projects that the transportation and warehousing sector will contribute Rp 1.245 trillion in 2023, representing a 14.99 percent growth. In 2024, the sector is expected to reach Rp 1.436 trillion or grow by 14.16 percent.
Despite its growth, the logistics sector is currently facing significant challenges. Among them is the ongoing conflict in Europe and the Middle East, disrupting the global maritime logistics flows in the Red Sea and Black Sea.
According to Associate Professor (Hon) in Supply Chain Management, R. Beni Adi Setiawan, the conflict has caused the region’s political, security, and economic instability and affected international trade routes.
As a result, there are obstacles in acquiring empty containers, rising transportation costs, and delays in goods delivery.
Beni Adi believes that to overcome these challenges, all stakeholders, including logistics businesses, the government, associations, and business partners, both domestically and internationally, must collaborate to seek effective and efficient solutions.
Harnessing digital technologies, including information systems, apps, and online platforms, is crucial to enhancing supply chain visibility, coordination, and integration.
“We also need to expand our network and cooperation with logistics providers in other regions, such as Southeast Asia, East Asia, and Africa, to create alternative and market diversification,” he said in an official statement released in Jakarta on Monday (1/1/2024).
See also: The Prediction of Logistics Sector Growth in Political Climate
The Head of the National Single Window Agency, Agus Rofiudin, stated that the government has prepared a solution to address the challenges faced by the domestic logistics industry. The government will establish a National Logistics Ecosystem (NLE).
“The NLE serves as a digital platform for collaboration, facilitating seamless movement of goods for export, import, and domestic distribution, both within and between islands,” Agus said.
The NLE is expected to contribute significantly to the national economyand thus, remains the government’s focus.
Moreover, the World Bank highlights that the national logistics is still not optimal. In the 2023 Logistics Performance Index (LPI), Indonesia remains in the 63rd position, according to the World Bank, achieving a score of 3.0. High logistics costs, at 14.29 percent of GDP, further impede economic growth and competitiveness.
“Trade allows a country to access cheaper goods and services from other countries, utilizing its comparative advantages, while FDI facilitates technology transfer, expertise, and institutional improvements from developed countries to developing ones,” he said.
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To address these challenges, Agus continued, the NLE simplifies state logistics businesses and collaborates with domestic and international private logistics service systems.
Furthermore, it facilitates government revenue transactions, enables payments between logistics businesses, and organizes port spatial planning and distribution routes.
These improvements are made possible through NLE's fundamental concept, which consists of four pillars. First, simplifying state and private sector service processes. Second, collaborating on logistics platforms.
Third, enhancing payment convenience with a single billing scheme. Lastly, spatial planning is implemented through policies to enhance cargo movement efficiency.
All NLE pillars are implemented through the Single Submission (SSm) Online Service Systems, which the National Single Window Institution continuously develops.
SSm Carrier Services, Permit SSm, and Single Submission Quarantine Customs (SSm QC/SSm Customs Quarantine) are implemented to streamline business processes, minimize repetition and duplication through single submissions, and facilitate managing state logistics services.
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The practical application of this ideal concept, particularly by logistics service providers, is crucial. They must exhibit professionalism, effectiveness, and efficiency in the processes, timing, and costs.
With extensive experience in the industry, SELOG, a PT Serasi Autoraya or SERA business line and part of PT Astra International Tbk, is one of theselogistics companies.
SERA, which was initially established to provide vehicle rental solutions, has become the largest, industry-leading transportation provider.
With over 32 years of experience, SERA continues to innovate and provide effective, efficient, and high-quality logistics services through SERA Logistics (SELOG).
SELOG is here to serve the customers’ needs in end-to-end logistics through diverse services, including Contract Logistics, Shipping Services, Shipping Agency, Freight Forwarding, Warehouse and Yard Management, and Courier Services.
Driven by the latest digital technologies, its services bring greater convenience and are practical and efficient to your business.
With its Astra Fleet Management Solution (FMS), SELOG provides businesses in Indonesia with IT-based comprehensive solutions for managing fleet vehicles.