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layers in the country'€™s logistics industry are predicting that the sector will still grow by a healthy margin this year on the back of high domestic consumption and the government'€™s efforts to boost infrastructure development.

The Indonesian Logistics Association (ALI) said the industry could still expand by 10 percent to 12 percent this year after a robust 18.8 percent annual growth in 2015.

'€œThe raw material import and export of finished goods has decreased, but domestic consumption is still there,'€ ALI vice chairman Mahendra Rianto said on Wednesday.

Last year, the market size of the domestic logistics industry stood at an estimated Rp 2.15 quadrillion (US$163.4 billion), a double-digit increase from the estimated Rp 1.81 quadrillion in the previous year, based on a study conducted by ALI partner, Frost and Sullivan.

Total exports dropped by 14.62 percent to $150.25 billion last year, but imports plunged at an even faster rate of 19.9 percent to $142.7 billion, helping the country book a 2015 trade surplus of $7.51 billion.

However, Mahendra said that the domestic consumption of 250 million Indonesian citizens would still boost the logistics industry this year.

The association also cited improving infrastructure development as a factor that would aid growth.

'€œWhen the government focuses on developing infrastructure, there comes opportunity for more utilization of our assets,'€ he said.

The study from Frost and Sullivan also forecasts the total freight volume to grow by 4.9 percent to around 1.18 billion tons this year.

Sea freight, which accounts for 97 percent of total freight traffic in Indonesia, is also expected to grow by 4.9 percent this year. The improvement of terminal infrastructure, port capacity and equipment are cited as the drivers for the growth.

President Joko '€œJokowi'€ Widodo'€™s administration has pledged to improve the country'€™s connectivity through the maritime highway program, which includes, among other things, the development of 24 commercial seaports across the country, as well as 1,481 non-commercial seaports.

Indonesia'€™s biggest port, Tanjung Priok in Jakarta, is also expected to have its capacity increased by 4.5 million total equivalent units (TEUs) with the opening of its New Priok port this year.

Meanwhile, air cargo, which makes up a much smaller proportion compared to sea freight, is also expected to continue its rapid growth over the past five years.

Frost and Sullivan'€™s global vice president of transportation and logistics practice, Gopal R., said air freight volume was expected to increase by 8 percent this year.

'€œThe key contributors would include general cargo, perishable goods, couriers, pharma and electronics,'€ he said.

The air cargo market turnover grew by 28 percent to the value of Rp 491 trillion last year.

Mahendra added that the country'€™s e-commerce boom would also aid air cargo growth, as many e-commerce players used it to distribute their goods.

With the expected growth for this year, Gopal also mentioned that the logistics players should focus on air cargo services, warehousing, multi-modal movement and e-commerce as the key services trends this year.

He also was not concerned over the increasing competition that would come with the ASEAN economic community.

'€œIt will give Indonesia the advantage because we seem to be doing more in logistics, more infrastructure development,'€ he said.