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Jakarta Post

Railways, warehousing boost logistics sector as it grows by 10.5% in 2019

  • Riza Roidila Mufti

    The Jakarta Post

Jakarta   /   Mon, March 16, 2020   /   04:14 pm
Railways, warehousing boost logistics sector as it grows by 10.5% in 2019 Trans-Sulawesi railway construction activities in Pekkae village, Barru regency, South Sulawesi, are pictured in this 2018 file photo. (Antara/Abriawan Abhe)

Indonesia’s logistics sector recorded 10.5 percent growth last year supported by high growth in railway and sea transportation, as well as warehousing, but the COVID-19 pandemic is likely to disrupt growth for 2020 as businesses limit operations worldwide.

Independent advisory Supply Chain Indonesia (SCI) reported on Monday that the domestic logistics sector was now valued at Rp 881.7 trillion, representing 5.6 percent of Indonesia’s gross domestic product (GDP). The sector’s 10.5 percent growth last year marks an acceleration from 8.52 percent in 2018. The logistics sector covers rail, road, sea, river and air transportation, as well as warehousing, courier and postal services.

The transportation subsector contributed around 83 percent of the overall logistics sector, valued at Rp 728.5 trillion. The remaining 17 percent was contributed by the warehousing subsector with a Rp 153.1 trillion valuation in 2019, a 16.7 percent rise from the previous year.

“Based on Indonesia’s economic data in the past three years, the SCI projects that Indonesia’s logistics sector will grow around 12.7 percent in 2020 with a contribution to GDP of Rp 993.9 trillion,” SCI chairman Setijadi said in a statement obtained by The Jakarta Post. The transportation subsector is predicted to grow by 8.2 percent and warehousing by 11.3 percent.

“The 2020 projection will be revised because of the COVID-19 disease that has had a significant effect on global trade and logistics activities, including in Indonesia.”

Read also: Indonesia's domestically driven economy could be blessing in disguise amid outbreak: ADB

Around 27 percent of Indonesia’s non-oil and gas imports come from China and 16.7 percent of Indonesia’s exports go to China, the SCI noted.

In 2019, road transportation contributed 54 percent to the whole transportation subsector, followed by air transportation (35.4 percent), sea transportation (6.9 percent), river and lake ferrying (2.4 percent) and railways (1.7 percent).

“Although road transportation contributed the most, the highest growth rate in 2019 was railway transportation [15.57 percent] and sea transportation [12.12 percent],” the SCI’s statement reads. Road transportation grew 10.36 percent, river and lake ferry transportation at 6.64 percent and air transportation 6.96 percent.