Supply chain: Logistics service potentially growing 8%
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Rantai pasok: Jasa logistik berpotensi tumbuh 8%
3 February 2023
By: M.G Noviarizal Fernandez
Jakarta - The Indonesian Logistics Association (ALI) predicts that the national supply chain services business will grow 8% throughout this year, sustained by micro, small, and medium enterprise digitalisation.
ALI Board of Experts Chairperson Nofrisel said that the logistics sector that supports micro, small, and medium enterprises (MSMEs) must grasp the opportunity.
Besides that, the positive forecast for the logistics sector refers to Indonesia’s economic growth forecast in 2023 that is predicted to reach around 4.7%-5.3%.
“The Indonesian Logistics Association forecasts that logistics business in 2023 will grow around 5%-8%,” he said on Thursday (2/2).
He explained that the growth of logistics services would rely on macro and sectoral economic growth.
He hopes that the logistics industry could innovate and take advantage of the opportunities that have yet to be fully utilised, such as regional economic potential and opportunities in the global value-added chain.
Nofrisel also said that the government must resolve various issues regarding the regulations, especially the weak law enforcement.
According to him, legal uncertainty in logistics services significantly hinders business development. “ALI hopes that there is collaboration and coordination in preparing the regulations and enforcing them as the logistics sector needs certainty,” Nofrisel said.
ALI Chairperson Mahendra Rianto stated that the government and the private sector must prepare suitable policies and strategies in the supply chain sector so that economic fundamentals remain strong.
According to him, the government and other stakeholders must support industries that are oriented towards value-added products and services as well as efficiency improvement.
“That can recover the state’s balance sheet to positive after some time,” Mahendra said.
He reckoned that all parties needed to support the industries that produce commodities and products with high added value.
Besides that, business players must also cut inefficient costs by simplifying regulations, implementing standardisations, and becoming more disciplined.
He noted that the start-up business must be a lesson for stakeholders in the logistics sector. “We must learn so that we do not pin our hopes on something unsustainable,” he stated.
He continued that he supported e-commerce to be one of Indonesia’s barometers that must be maintained with policies that favour and focus on the sellers.
Recommendations
To boost logistics services business, he is offering eight recommendations for all stakeholders in the supply chain sector.
First, Indonesia needs to observe the global logistics development as all countries rely on each other globally.
Hence, he suggests the government to observe the global logistics development so that Indonesia will have a stronger bargaining power.
Second, the downstreaming policy. He welcomes the government’s policy to develop value-added products and services.
“Third, ALI welcomes the government’s step to prepare Indonesia to face the energy crisis threat,” he said.
Fourth, the government’s program regarding national MSME development. He suggests that knowledge of delivery efficiency, packaging, export-import, warehouse organisation, technology utilisation, and human resource development in MSMEs must be improved.
Fifth, standardisations are required for both equipment and services to adjust to the global logistics development.
Specifically for logistics, Indonesia is intensively involved in the agreement to standardise packaging, carrying equipment, and pallets.
He suggests those factors to be improved to create products and services that are more competitive and to reduce logistics costs.
Sixth, one of the catalysts for inflation is expensive logistics. Hence, ALI suggests the government to focus more on logistical issues to handle inflation.
Seventh, human resource competence in the logistics sector is improving slowly. He encourages more majors or faculties for the logistics sector in industrial centres, especially outside Java.
Eighth, the halal industrial estate development policy that include the implementation of the halal logistics concept.
