Indonesia's Logistics Cost-to-GDP Ratio Decreases Between 2005 and 2022

Indonesia's logistics costs have decreased over the past two decades.

However, the government aims to further reduce these costs in the coming years.

According to Presidential Regulation No. 26 of 2012, "logistics" is part of the supply chain that handles the flow of goods, information, and money through the processes of procurement, storage, transportation, distribution, and delivery from the point of origin to the destination.

According to the Coordinating Ministry for Economic Affairs, logistics has several cost components, including:

• Transportation costs: The cost of transporting goods using various modes of transport.
• Warehousing costs: The cost of storing goods in warehouses, including the operational costs of storage facilities.
• Inventory storage costs: The costs incurred due to goods being stored in warehouses, such as the cost of tied-up capital, interest, taxes, insurance, and the risk of damaged or unsold goods.
• Administrative costs: The costs of managerial activities, planning, control, and coordination of the logistics system.

Citing data from the Coordinating Ministry for Economic Affairs, in 2005, total logistics costs in Indonesia reached 21.38% of the country's GDP.

Since then, the trend has fluctuated with a downward trend, until the ratio of logistics costs to Indonesia's GDP reached 14.29% in 2022, as shown in the chart.

In 2022, Indonesia's largest logistics costs came from transportation costs, with the following breakdown:

• Transportation costs: 8.79% of GDP
• Warehousing and inventory storage costs: 3.19% of GDP
• Administrative costs: 2.30% of GDP

Despite the downward trend, according to the Ministry of Trade (Kemendag), the ratio of logistics costs to Indonesia's GDP is still higher than that of developed countries, which ranges between 8–10%.

The government aims to further reduce the ratio of logistics costs to Indonesia's GDP by 2029, so that product prices can become more affordable.

"We will only target [the logistics cost ratio to decrease] from 14.29 percent to 12 percent in 2029," said Director General of Domestic Trade at Kemendag, Iqbal Shoffan Shofwan, as reported by Antara (4/11/2025).