Indonesia is poised to become a major centre for logistics growth as its economy grows, with 3PLs poised to win market share, according to a leading analyst.

Gopal R, VP for Transportation and Logistics Practice in Asia-Pacific at Frost & Sullivan, told IFW that South-east Asia’s largest economy would see logistics revenue increase 8.3% year-on-year to Rp1,414 trillion ($155bn) in 2011, while exports of goods and services would increase by 9.7-10.8%.

Thereafter, he added, the logistics sector would grow at a compound annual rate of 9.6% to reach Rp2,042 trillion by 2015.

The oil, gas, minerals, plantations and manufacturing industries all seeing rising demand for logistics services.

“Indonesia presents great opportunities for logistics service providers, as most of the leading business segments have shown a considerable revenue growth in the last few years,” Gopal said.

Last year, the 3PL market was valued at Rp149 trillion, while in-house logistics spending in manufacturing, agriculture, forestry and fishing, construction, mining, telecoms and other services was valued at Rp843.7 trillion.

For 3PLs, the Indonesian oil and gas sector offered the most potential, he said. The potential for logistics services could reach $3.2 billion in 2011.

“Increasing household consumption also provides opportunities for logistics players,” he added.

Gopal said that freight forwarding, inbound and outbound transport and warehousing were the most outsourced logistics functions in Indonesia, while information management was mostly handled in-house.

He said around 70% of Indonesia’s 3PL revenues were generated from outsourcing, with the remaining revenue contributed by advanced and full-service 3PL offerings at 20% and 10%, respectively.

Gopal also forecast that 3PL full-services would grow at around 22.5% a year to be worth $280 million in 2012.

Source: ifw