Indonesia's Logistics Sector Supports the Economy: How Big is the Market?

Indonesia's logistics market size reached $275 billion in 2020, with a CAGR of 16.2% from 2015, according to AC Ventures.

Meanwhile, revenue from this business is projected to exceed $300 billion by 2024. However, various fundamental issues persist among Indonesian businesses in the logistics sector, ranging from a fragmented ecosystem and inefficient business systems to suboptimal utilization of logistics infrastructure.

Badan Pusat Statistik (BPS, Indonesia's Central Bureau of Statistics) reported that the consumer price index (CPI) for goods delivery services was at 116.46 in September 2022, up 0.34% from the previous month. This means that goods delivery service tariffs increased by 0.34% month-on-month (MoM).

Compared to December 2021, goods delivery service tariffs increased by 1.89% year-to-date (YTD). Similarly, compared to September of the previous year, current goods delivery service tariffs have increased by 1.94% year-on-year (YoY).

Nationally, the transportation expenditure group experienced a monthly inflation of 8.8% (MoM) in September 2022. The sub-group of private vehicle operation recorded the highest inflation, while the sub-group of vehicle purchases recorded the lowest.

The government's increase in Pertalite and Solar fuel prices in September 2022 triggered high inflation in the transportation expenditure group, but did not significantly impact goods delivery services.

Several regions recorded substantial increases in goods delivery service costs, with their annual inflation rates exceeding the national average.

The CPI for goods delivery services in Kudus Regency recorded a 10.35% increase (YoY) in June 2022. This means that the cost of goods delivery services in this regency increased by 10.35% in the last year. This was the highest increase among the 90 regencies/cities surveyed by BPS.

The next highest increase in goods delivery costs was in Kotamobagu, reaching 9.01% (YoY). This was followed by Banjarmasin City at 7.16% (YoY), Banda Aceh City at 6.53% (YoY), and Bekasi City at 5.14% (YoY).

Following these were Luwuk Regency with a 4.92% (YoY) increase in goods delivery service costs, Palangka Raya City at 4.62% (YoY), Bulukumba Regency at 4.55% (YoY), Singkawang City at 4.21% (YoY), and Banyuwangi Regency at 4.2% (YoY).