2023 business projection: Logistics in growth trend
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 - Proyeksi bisnis 2023: Logistik dalam tren pertumbuhan
15 November 2022
By: Dany Saputra
Express delivery companies predict that the logistics sector will still continue its growth trend in 2023 despite the global recession threat.
Lalamove Chief Operating Officer (COO) Paul Loo said that the logistics sector would still have some power despite the challenging situation in the future.
According to him, Lalamove is still targeting to grow triple digits, similar to the previous year. According to him, this is reflected from the growth of business partners that has surpassed 328% from the Covid-19 pandemic.
“To face 2023, we aim to maintain the triple-digit growth from year to year. This will be the opportunity to accelerate our performance, especially during the recovery period after the pandemic,” he said in his official statement on Monday (14/11).
Next year, Paul predicts that there will be a change in behaviour with more package deliveries using vans and pick-up boxes.
For e-commerce package deliveries, he predicts that they will still boost the logistics sector, especially Lalamove.
“Especially for deliveries of e-commerce packages and relocation of goods for infrastructure construction in Indonesia,” he continued.
Lalamove Indonesia Managing Director Andi M. Rizki said that the turmoil in the logistics sector had been happening throughout this year. For example, he mentioned that the increase in fuel prices that impacted goods delivery companies.
“Everyone is impacted by the fuel price increase including our three pillars, namely customers, drivers, and SMEs (small and medium enterprises),” Andi explained.
Since operating for the first time in 2018, the number of orders served by Lalamove have grown 1,867%, drivers 800%, active users 633%, and business partners 328%.
Lalamove currently owns 10 types of vehicles, starting from motorcycles to CDD box trucks with a capacity of 5 T.
“In the next 1-2 years, we are planning to add six more vehicles, including wing box trucks [with a capacity of] 18 T,” Andi continued.
The technology-based express delivery company, Paxel, is also targeting to grow their business in 2023, but it is more moderate.
Paxel.co President Director Zaldy Ilham Masita said that the moderate target was due to the decrease in the purchasing power of the people and the increase in operating costs of the company next year.
“We do not expect much in 2023 due to the decrease in the purchasing power of the people and the increase in costs thanks to the fuel price increase and minimum wage increase. We hope to grow 25%-35%, which is already great compared to 2022,” Zaldy stated.
According to him, economic slowdown that has the potential to occur in 2023 will impact the logistics sector.
Hence, he reckoned that Paxel must provide better services and innovate new products.
Some of the services are vending machines for Paxel merchant partners and cold chain for seafood merchants, especially for those with an export market.
He explained that frozen food was one of the products that contributed to Paxel’s delivery performance growth.
Approaching the end of the year, Zaldi hopes that delivery performance will be boosted by the high demand during Christmas and New Year holidays.
“For the fourth quarter of 2022, we hope to grow 20% compared to the third quarter of 2022 with the high season during Christmas and New Year,” he said.
Recession threat
Meanwhile, Supply Chain Indonesia (SCI) Chairman Setijadi stated that the logistics sector grew consistently for three quarters in a row since the start of 2022. However, he affirmed that the growth consistency would face a challenge approaching the end of the year and next year due to the recession threat.
He revealed that the challenge for the logistics sector in the fourth quarter of 2022 and 2023 was to maintain consistency as well as the high growth of transportation and warehousing from the first quarter of 2022 until the third quarter of 2022.
Other challenges include facing the recession threat and the global supply chain uncertainty due to the global geopolitical dynamic.
“The national logistics sector is expected to boost the growth of various businesses through increasing the volume and competitiveness of each product and commodity,” Setijadi said.
Hence, he emphasised that the logistics sector needed to be improved to strengthen the resilience of the national supply chain.
Setijadi stated that logistics needed a synergy among logistics companies and their users, such as manufacturing and retail companies.
“Support and cooperation must also be provided from logistics facility operators, such as ports and airports, as well as from the central government through related ministries/institutions and regional governments,” he continued.
According to him, the recovery of transportation and warehousing or the logistics sector does not only occur nationally, but also regionally and globally.
One of the indicators is global shipping that has recovered with shipping costs returning to the amount before the pandemic.
Statistics Indonesia stated Indonesia’s economic growth in the third quarter of 2022 reached 5.40% year-on-year (YoY) compared to the realisation in the third quarter of 2021.
