Frost & Sullivan is expecting the transportation & logistics market to grow with expected CAGR 15.2 per cent in 2015. Gopal R, global vice president, transportation & logistics practice at Frost & Sullivan said that the industry is set to record strong double digit growth over the forecast period due to the continuous growth of the Indonesian economy driven by resilient domestic demand.
Gopal R is expecting strong private consumption growth, higher trade growth, lower external financing cost & oil price and infrastructure development to continue drive logistics industry growth in 2015. However, he said that rising labour wages will force businesses, including transportation & logistics to incur lower profit margin. He also said that the limitations to invest optimally in logistics infrastructure such as ports, airports and roads will hamper freight movement.
Freight activity in indonesia
Gopal R said that over 1.1 billion tons of total freight is expected by 2015 with CAGR of 5.4 per cent between 2010 – 2015. He said that road transport is the predominant domestic mode, accounting for about 69.7 per cent of freight ton-km.
He also said that sea freight in Indonesia continue to dominate with 97.1 per cent of total freight in 2014 while sea freight is expected to grow 5.1 per cent by end 2015.