Indonesian logistics benefits as booming e-commerce leads to cheaper PLBs (The Load Star)
Indonesia’s logistics industry will enjoy double-digit growth this year, thanks to booming e-commerce and a string of new bonded logistics centres.
According to the Indonesian Logistics Association (ALI), the industry will grow 10-12% this year, while e-commerce will expand by up to 30%.
“E-commerce in Indonesia has driven express business growth exponentially for the last five years, with a lot of new express logistics companies launching,” said ALI chairman Zaldy Masita.
“The challenge is that there is little logistics standardisation in Indonesia, so it’s very difficult to implement automation systems that could increase productivity. Indonesia’s geography of 17,000 islands is a big challenge for newcomers from overseas.”
However, he added: “The e-commerce opportunity is still wide open, with the portion of e-commerce of total retail sales still below 5% – so there’s plenty of room for further growth,”
Mr Masita is also confident Indonesia’s new bonded logistics centres (PLBs) give the country a much-needed advantage over rivals Singapore and Malaysia, where logistics costs are roughly half.
The centres act as “mini free-trade zones”, deployed strategically throughout the country, helping reduce storage costs for importers and exporters. The first 11 opened in 2016, another 50 launched last year and a second generation is under development.
“PLBs will bring regional warehouses in ASEAN to be based in Indonesia,” claimed Mr Masita. “As the biggest economy in ASEAN, Indonesia consumes the majority of products, so it makes sense if more warehousing is here to save logistics costs.
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