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Opportunities in Indonesia’s Logistics Market in the ASEAN Economic Community (AEC) Context 

  • October 2015
  • -
  • Frost & Sullivan
  • -
  • 57 pages

Summary

Table of Contents

Opportunities in Indonesia’s Logistics Market in the ASEAN Economic Community (AEC) Context : AEC Implementation will Trigger Big Growth Opportunities for Indonesia's Logistics Market

The imminent ASEAN Economic Community (AEC) is expected to have several implications on various economic sectors. This study provides a detailed overview of the implications and potential impact that the AEC will have on the Indonesian logistics market. It supplies key market dynamics such as drivers and restraints and evaluates the development in Indonesia’s air, sea, and rail freight sectors. The report also supplies an overview of the AEC and its evolution and highlights its relevance to Indonesia’s logistics market and the ASEAN logistics industry as a whole. It also provides an analytical overview of Indonesia’s logistics market and discusses freight volumes and key trends.

Executive Summary—Indonesia’s Logistics Profile

Indonesia’s logistics market is expected to grow at a percent Compound Annual Growth Rate (CAGR) for the next five years.

-Indonesia’s freight volume is highly correlated to economic growth. In the next five years, Indonesia’s freight volume is expected to increase following better economic growth in the next five years.

- From 2014 to 2019, the CAGR of Indonesia’s logistics market is expected to grow at percent, which is percent higher than the 2010–2014 CAGR.

- Indonesia’s logistics-costs-to-Gross Domestic-Product (GDP) ratio has been increasing in the last five years; this shows that Indonesia’s logistics are expensive. The poor quality and small quantity of Indonesia’s infrastructure are key drivers for its high logistics costs.

- After Indonesia had a new government in early 2014, the country now allocates a fair portion of the budget towards infrastructure projects, especially for transportation and logistics. Hence, Indonesia’s logistics costs may decrease in the next five years.

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