E-commerce spurs double digit growth for Indonesian logistics industry
Indonesia’s logistics industry is expected to see continued double-digit growth this year, as a result of e-commerce demand and the government-supported investment in infrastructure.
In an article posted on the Indonesian Logistics Association (ALI) website today (30 July),the ALI Chairman Zaldi Ilham Masita said that the growth “could be above 10%”.
Masita explained why ALI is predicting strong growth – but also pointed out there are challenges to be overcome
“E-commerce in Indonesia has driven express business growth exponentially for the last five years, with a lot of new express logistics companies launching,” said the ALI chairman.
“The challenge is that there is little logistics standardisation in Indonesia, so it’s very difficult to implement automation systems that could increase productivity. Indonesia’s geography of 17,000 islands is a big challenge for newcomers from overseas.”
The article on the ALI website also quoted Yuki Nugrahawan Hanafi, the Chairman of the Indonesian Logistics and Forwarders Association (ALFI), as predicting a 10+% growth. But Yuki added that Indonesia’s logistics sector still had to address a number of issues before it could realise its full potential. Most importantly, Yuki said, Indonesia has to reduce its logistics costs, which are high in comparison to Malaysia and Thailand.
Yuki added that all the stakeholders in Indonesia’s logistics industry must “prepare themselves for the Industry 4.o” (this is the so-called Fourth Industry Revolution, which will see manufacturing and distribution transformed by Artificial Intelligence, automation and bid data).