Indonesia Logistics and Warehousing Market Forecast (2018-2028)

Executive Summary

Indonesia logistics and warehousing market revenue is experiencing a significant surge, driven by the rapid growth of the digital economy and the booming e-commerce industry. This growth has been particularly pronounced in recent years, reflecting the increasing demand for efficient transportation, storage and warehousing solutions. According to the National Development Planning Agency (Bappenas), the logistics costs for both domestic and export activities accounted for approximately 23.27% of the GDP in 2023, a slight decrease from around 23.5% in 2022 and 2021.

The rise of e-commerce and the digital economy has led to a surge in demand for logistics services, particularly in last-mile delivery and warehousing. To meet this demand, companies are increasingly investing in technology and infrastructure to improve efficiency and reduce costs. This includes the adoption of digital platforms for tracking and managing shipments, as well as the development of new warehousing facilities in strategic locations. With a renewed focus by the government on infrastructure development and the ongoing digital transformation of the industry, the future looks promising for Indonesia's logistics and warehousing market.

Logistics Transit by Mode of Transportation

Sea freight accounts for majority of share in Indonesia’s international logistics sector, highlighting the significant role of air transport in the country's logistics industry. In contrast, road freight makes up 3/4th share in the domestic transit, emphasizing the importance of road transport. Several advancements have been made in logistics transportation. The government has built 11 ferry ports as part of a goal to have 36 ports by 2024. Rail transport holds a significant place in domestic logistics market.

Moreover, Indonesia's logistics and warehousing market is undergoing transformation through mergers, acquisitions, and strategic investments. Companies are seeking to leverage synergies, broaden their market presence, and offer comprehensive solutions to customers. In meeting the evolving demands for efficiency and real-time tracking, logistics providers are introducing flexible and customer-centric services. Those adept at navigating these changes are well-positioned to secure a competitive edge in the market.

Key Highlights of Major Players in the Indonesia Logistics and Warehousing Market

• Indonesia ranks 55th in logistics quality and competence, 51st in parcel tracking and tracing ability, and 62nd in delivery timetables according to the World Bank and is the world's 9th largest e-commerce market.
• The number of parcels processed in Indonesia surged to 1.8 billion in 2022, a significant increase from 200 million in 2017.
• Cainiao Group launched its first warehouse, Cainiao Cikarang Logistics Park, in Jakarta, Indonesia, in 2023, as part of its regional cHub expansion initiative. Spanning 320,000 square meters, the warehouse is strategically positioned to support the growing manufacturing sector in the region.
• NTC Group entered the Indonesian market in September 2023, expanding its global footprint. The company has started operations in Jakarta, strengthening its position as a comprehensive logistics solutions provider worldwide.
• Indonesia's online spending growth surpasses that of other regional countries like Thailand, Australia, and Japan, which reported online spending rates of 60%, 55%, and 48% respectively.

Major Infrastructure Developments in Indonesia

• Indonesia boasts approximately 318 seaports, with Tanjung Priok handling a significant portion of international trade activities, accounting for 50% of total operations.
• The Port of Pontianak accommodates both domestic and international vessels, managing around 7,000 vessels, 143,500 TEUs (twenty-foot equivalent units), and 3,475,700 tonnes of cargo annually.
• The country currently has 683 airports, with 35 commercial ones managed by state-owned enterprises Angkasa Pura I (AP I) and Angkasa Pura II (AP II). Jakarta’s Soekarno-Hatta International Airport is the largest airport in Indonesia, followed by Ngurah Rai International Airport.
• Indonesia boasts several major national highways crucial for its transportation network. Among these is the Trans-Java Highway, which stretches across Java from west to east and serves as a pivotal route for the island's transportation needs.
• The Trans-Sumatra Highway spans Sumatra and plays a vital role in connecting regions across the island.
• According to World Data, Indonesia is ranked 33rd globally in terms of rail network length, with only 2.6 centimeters per capita in 2022. The total length of the rail network in the country was around 7,032 kilometers in 2022. The government plans to increase the railway network length to 7,451 km by the end of 2024, with a long-term vision of 10,524 kilometers by 2030.

Indonesia Logistics Sector Growth Rate, Q1/Q2/Q3/Q4 2020 – 2023

Significant Acquisitions in the Indonesia Logistics and Warehousing Market

• According to data from the Indonesian Ministry of Investment/Investment Coordinating Board (BKPM), the transportation, warehousing, and telecommunications sector made a significant contribution in 2021. This sector contributed Rp. 61 trillion, equivalent to 13.7% of the total PMDN realization, and USD 3.1 billion, accounting for 10% of the total PMA realization.
• In 2023, MC Urban Development Indonesia (MCUDI), a 100% subsidiary of Mitsubishi Corporation engaged in real estate development, announced a strategic partnership with INA(Indonesia Investment Authority) and ESR group to unlock the potential of investing in warehouse facilities in Indonesia.
• Vesta, a leading global transaction guarantee platform for online purchases, has announced its partnership with Blibli, one of the leading and most trusted commerce and lifestyle platforms in Indonesia. This partnership aims to increase approval rates through Vesta’s proven payment guarantee product.
• Indonesia’s Gojek, a payment firm, and e-commerce leader Tokopedia merged in 2021 to create a multi-billion-dollar tech company called GoTo. This collaboration serves online shopping, courier services, ride-hailing, food delivery, and other services in Indonesia.

Future Outlook of Indonesia Logistics and Warehousing Market

In conclusion, Indonesia's logistics and warehousing market presents immense opportunities for growth and innovation, driven by the country's strategic location, expanding economy, and the rapid evolution of the digital economy and cold chain infrastructure in the country. Despite facing challenges such as infrastructure constraints and the need for skilled manpower, the sector is witnessing significant advancements in technology and service offerings. With continued investment in infrastructure, adoption of digital solutions, and a focus on meeting customer demands, the future of Indonesia's logistics and warehousing market looks promising. Companies that can adapt to the changing landscape and embrace innovative approaches are poised to thrive in this dynamic market.

The future of Indonesia's logistics, warehousing, and cold chain market is promising, driven by increasing digitalization, the adoption of online platforms, and a growing demand for efficient transportation and storage solutions. These trends are expected to spur market growth and innovation, providing consumers with more convenient and accessible options for managing their logistics needs, particularly in new and emerging towns across the country. Companies that embrace these trends and leverage technology effectively are likely to thrive in this evolving market landscape.

The President of Indonesia has recently unveiled a bold initiative to move the nation's capital from Jakarta to Borneo. The new city, named "Nusantara" after an ancient Javanese term meaning "archipelago," will be the new capital city of Indonesia.

Scope of Indonesia Logistics and Warehousing Market

The scope of work for the Indonesia logistics and warehousing market study includes an in-depth analysis of key market trends, drivers, and challenges. It will provide insights into the market size, competitive landscape, and regulatory framework. The study will assess the warehousing infrastructure, transportation networks, the impact of COVID-19 and on the cold chain sector. Additionally, it will analyze the cold chain logistics segment and highlight major players and their strategies. The study aims to offer stakeholders valuable insights to make informed decisions and navigate the evolving market landscape effectively.

Key Areas Discussed in the Report

Logistics Infrastructure

Rail

Road

Marine

Air

Logistics Services

Freight Forwarding

Third-Party Logistics

Warehousing

Courier /Express and Parcel

VAS

Types of Warehouses

• Specialized Warehouses
• Cold storage
• Container Freight Stations (CFS)
• Retail

By Cold Chain Services

• Cold Storage
• Cold Transport

By Types of Players

• International
• Domestic

By Industries

• E-Commerce
• Mining
• Manufacturing
• Agriculture
• Food-processing
• Pharmaceuticals
• Retail

Key Questions Answered

1. What is the current performance of the logistics market in Indonesia?

2. How Indonesia warehousing market revenue is growing?

3. What are the major services in warehousing sector contributing to the growth?

4. Is cold chain demand rising in Indonesia?

5. Is E-commerce sector driving demand for road transport in Indonesia?

6. Who are the key players in Indonesia's logistics, warehouse, and cold chain market?

7. What characterizes the investment landscape among the major players in the industry?

8. Which industries are driving the growth of the logistics and warehouse market in Indonesia?

9. What significant mergers and acquisitions have shaped the history of Indonesia's logistics and warehouse market?

10. What opportunities to be tapped in Indonesia logistics market?

11. Can foreign players benefit by collaborating with Indonesian logistics companies and how? Show more