Indonesia to Record $160bn in Logistics Related Expenses
By: Jakarta Globe March 27, 2014
Companies operating in Indonesia may spend as much as $160bn to move goods, materials and merchandise to and from Southeast Asia's largest economy this year, according to Frost & Sullivan, an industry tracker.
That would be 14.7 percent more than last year’s estimate of Rp1,588tr, the firm said. Around Rp328.8tr of last year’s spending was outsourced to logistic firms, while the remaining Rp1,254.5tr was spent on in-house logistic services.
Frost & Sullivan said growth in the industry will be driven largely by the improvement in international trade as well as a rise of the middle-income group, which would increase demand for goods and logistics.
Volume-rise, sea freight remains dominant but rail transportation and airfreight are expected to grow rapidly as a result of the rise of the middle-income group.
Frost & Sullivan forecast that the volume of sea-borne freight will rise 4.3 percent to 1.04 billion tons, while rail transportation and airfreight will grow 8.5 percent to 25.5 million tons and 15.3 percent to 1.34 million tons, respectively.
The rise in airfreight volumes will be driven largely by private consumption as more and more Indonesians use these services to deliver goods and merchandise.