Supply Chain Council of European Union | Scceu.org
Freight

Indonesian Freight and Logistics Market Business Strategies and Transformation Overview to 2023 – The Market Publicist

The Indonesian freight & logistics market is expected to reach a market value of USD 383 billion by 2023. The logistics sector of Indonesia was more unregulated till 2007, since the time protectionist measures were applied. Given the importance of maritime trade, there has been a general trend to keep the sector closed to foreign players over the past decade. However, the current government has taken initiatives to open up the sector again by raising FDI ownership percentage ceilings.

International freight forwarding companies can now hold a majority stake in Indonesia-based entities. However, the capital requirement for foreign players is very high, at USD 10 million, minimum, paid-up capital. Road freight forwarding is a larger market than air and sea freight forwarding in Indonesia. Among sea and air segments, sea freight forwarding segment is larger than the air freight forwarding segment.

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Some of the major players of the market are:

DB Schenker, DHL, Yusen Logistics, Sinotrans, Kerry Logistics network, Samudera, YCH, SELOG, BGR, CKB and Ceva, amongst others.

Insights on Value-added Logistics

The scope of value-added logistics covers services, such as contract logistics, integrated logistics services, and project logistics, along with some other areas, like value-added warehousing and distribution services. The outlook for project logistics in Indonesia is bright, given that there is an ongoing infrastructure overhaul ongoing in the country. International project logistics contracts involving foreign companies in Indonesia are more likely to be handled by international project logistics providers and partners. These make up majority of the demand and value of the project logistics market. Key industries with requirements of project logistics include oil & gas sector, manufacturing industry with constituent sub-segments, and public sector projects.

Yusen Logistics announced in June 2017 that it will be strengthening and expanding its presence in the contract logistics business in Indonesia. Post the expansion at the MM 2100 industrial town (which is accessible to Jakarta and the largest sea ports and airport in Indonesia at Jakarta),Yusen now has 45,000 sq. m of warehousing space at the industrial park, the largest warehousing capacity for a logistics provider in MM 2100 establishment. In fact, Yusen is using one of its three companies in Indonesia to develop a single window for providing contract logistics services, while the other two companies are also involved in warehousing and freight forwarding.

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Insights on E-Commerce Fulfilment

Indonesia’s current e-commerce market is similar to China’s online marketplace in early stages, around a decade or so ago. E-commerce in Indonesia also mimics the early US e-market, which was flooded with customers wary of trusting online payments and retailers. Indonesia is truly unique, in that, it has the potential to create a hybrid of the widest opportunities from America and China’s e-commerce economies, propelling the Indonesian online marketplace onto the global stage. E-commerce logistics also depends significantly on return logistics and cash logistics (specifically in Indonesia, due to lower digital finance and digital banking penetration). E-commerce fulfillment logistics has also changed the prospects for courier, express, and parcel companies. Postal companies with state backing had almost become defunct, if not for how e-commerce has reinvigorated them given their expertise with moving small-sized and low-weight packages across the country networks they operate in.

Players, such as aCommerce and 8commerce, have become key e-commerce trade enablers and are supporting multiple mid-sized e-commerce companies and startups with order fulfilment and execution. aCommerce operates fulfillment centers in Jakarta for its clients, and hence, can be a great partner for any large logistics companies that are looking to set up e-commerce fulfilment infrastructure in Indonesia. Pos Indonesia, on the other hand, is already taking shots at becoming the foremost e-commerce logistics company in Indonesia by collaborating with SingPost, a regional leader in e-commerce fulfilment and various other players. Pos Indonesia is working aggressively to upgrade e-commerce fulfillment capability, and moreover, it is also looking to IPO by 2020.

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Table of Contents:

1 Introduction
2 Freight & Logistics Market Research Methodology
3 Executive Summary
4 Freight & Logistics Market Dynamics
5 Freight & Logistics Market Segmentation
6 Competitive Landscape
7 Freight & Logistics Market Opportunities And Future Trends

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