Indonesia Freight Transport Report

Providing expert analysis, independent forecasts and competitive intelligence on the freight transport industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, Freight Transport Risk Reward Index, Macroeconomic Forecast, Company Profiles and Regional and Country Industry Overviews.

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Indonesia Freight Transport Report
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$1,295.00

BMI View: In 2016 the air freight mode will see the most significant growth in Indonesia, as trade in Asia is set to rebalance after stalling in 2015 and key sectors such as the pharmaceutical market will see a boost in growth. In our medium-term forecast to 2019, BMI believes the rail and air freight modes will see higher growth than road freight transport, as a result of state and external investment in upgrading rail networks and higher growth in key air freight indicators. Road freight will continue to be hampered by poor road infrastructure and competitiveness.

BMI is optimistic about Indonesia's domestic and trade growth in the coming years. 2016 will mark a return to positive real trade growth (with both positive import and export growth) of 1.75%, up from an estimated -2.32% in 2015. In addition, we forecast real GDP growth of 5.6% in 2016, which should rise to a level comfortably above 6% for the remainder of our medium-term forecast period to 2019, growing at an average annual rate of 6.0%. Coupled with robust growth in GDP income per capita - above 10% in the medium-term - and steady real private consumption growth (reaching 5.3% in 2016 and above 6% from 2017-2019), we see healthy indicators all round for Indonesia's economic growth. The country's large domestic market, low land and labour costs and proximity to other South East Asian and East Asian markets make it an attractive manufacturing hub and freight transport destination - which is further boosted by the country's ports and shipping routes. External factors in the medium-term such as a further economic slowdown in China and the rest of Asia could pose a threat to maintaining growth. On the other hand, improvements in infrastructure across the country's freight modes and further diversifying trade to destinations such as Europe could help buffer the country from external shocks.

Indonesia's road freight industry will see a slight rise in growth in 2016, moving from 3.4% in 2015 to 3.7%, and at an average of 4% y-o-y growth to 2019 - the most sedate growth in the country's total freight mix. Key infrastructure projects such as the 2,700km Trans-Sumatra toll road should facilitate the transport of the country's natural resources, although there remains a need for significant investment in the stimulation of further private investment. President Joko Widodo's government is making efforts to secure this boost, with the third phase of the National Long Term Transport Sector Plan - running from 2015-2019 - aiming to achieve greater integration of infrastructure across the archipelago nation. The final phase should complete the incorporation of transport networks for regional connectivity, including remote regions which have lower quality roads and lesser access to well-connected routes.

Prospects for the country's rail freight industry bode well over the medium term, growing at an average rate of 6.0% until 2019, a higher rate than both road (4.0%) and air (4.9%). However, in 2016 we see a slowing down to 4.4% to our estimate for 2015 of 5.6%. This comes off the back of huge growth in rail transport in 2014, so in relative terms the mode is still performing well. President Joko Widodo is still pursuing a series of moves to improve rail infrastructure, particularly in the form of high- and medium-speed rail projects, some of which are attracting intense international bidding competition. In the medium-term the shrinking of the trade in both ores and metals and iron and steel is set to reverse, moving into higher figures in our medium-term forecast period, which will also help drive the higher rail growth figures we see towards 2019.

This quarter we have revised down our estimates for Indonesia's 2015 air freight total tonnage, down to 1.5% growth when previously we had forecast growth of 4.1%. This is due to the economic slowdown in Asia, particularly China, which impacted trade and saw a slowdown of air freight trade across the region, which added to the problems caused by slowing growth in the pharmaceutical sector. However, as the country is likely to see high GDP per capita income and stable private consumption growth, fuelling trade in other airfreight staples such as consumer products, things bode well for the country's airfreight over the medium term. In 2016 we forecast that growth will more than double from the 2015 rate to 3.5%. Improvements in safety, capacity and regulation over the coming years will add to Indonesia's competitiveness as a global player and continue to encourage investment, as well as confidence from international partners.

Recent Developments

  • China has reportedly won a contract over Japan to build a USD5bn rail project between Jakarta and Bandung on the island of Java, ending a drawn-out process that included two reversals by the Indonesian government. However, it should be pointed out that although the contract has sparked intense competition, the project is no longer technically a high-speed railway (it is now a medium-speed railway) and will not make a significant difference to Java's rail infrastructure.

  • The IATA recently criticised a new regulation on supply chain safety and air cargo that has been issued by the country's transport ministry, claiming it could reduce the competitiveness of Indonesia's air freight.

  • Garuda Indonesia, the country's national airline, has partnered with Cargo Air to jointly market, promote and sell space on freight routes operated by both airlines.

Key BMI Forecasts

  • Road freight growth is forecast to reach 3.7% in 2016, at 1.38bn tonnes, with average growth of 4.0% during our forecast period to 2019.

  • Rail freight volumes are forecast to rise by 4.4% in 2016, reaching 36.891mn tonnes, and average growth to 2019 is set to be the highest of Indonesia's freight modes at 6.0%.

  • Airfreight tonnage is set to rise to 3.5% in 2016, more than doubling the 1.5% we estimate was seen in 2015, to reach 512,000 tonnes. Airfreight will grow at an average of 4.9% to 2019.

  • Indonesia's real trade growth will move back into positive figures in 2016, at 1.75%, building on 2015's -2.30%.

BMI Industry View
7
SWOT
10
Freight Transport
10
Political
12
Economic
14
Operational Risk
16
Industry Forecast
18
Trade Forecast
18
Table: Trade Overview (Indonesia 2012-2019)
21
Table: Key Trade Indicators (Indonesia 2012-2019)
21
Table: Main Import Partners
22
Table: Main Export Partners
23
Road Freight Forecast
24
Table: Road Freight (Indonesia 2012-2019)
26
Rail Freight Forecast
27
Table: Rail Freight (Indonesia 2012-2019)
29
Air Freight Forecast
30
Table: Air Freight (Indonesia 2012-2019)
32
Market Overview
33
Company Profile
36
Garuda Indonesia (Cargo)
36
Political Outlook
40
Domestic Politics
40
Long-Term Political Outlook
42
Table: Indonesia Political Overview
46
Oil Price Outlook
47
Europe - Brent On Board For A Bumpy Ride
47
Macroeconomic Forecast
48
Economic Activity
48
Demographic Forecast
51
Demographic Outlook
51
Table: Population Headline Indicators (Indonesia 1990-2025)
52
Table: Key Population Ratios (Indonesia 1990-2025)
52
Table: Urban/Rural Population & Life Expectancy (Indonesia 1990-2025)
53
Table: Population By Age Group (Indonesia 1990-2025)
53
Table: Population By Age Group % (Indonesia 1990-2025)
54
Methodology
56
Industry Forecast Methodology
56
Sector-Specific Methodology
57
Sources
59

The Indonesia Freight Transport Report has been researched at source, and features latest-available data covering commercial transport and logistics by road, rail, air and water; industry forecasts, company rankings covering leading national and multinational operators; and analysis of latest industry trends, opportunities, projects and regulatory changes.

BMI Research's Indonesia Freight Transport Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Indonesian freight transport and logistics industry.

Key Benefits

  • Benchmark BMI's independent freight transport industry forecasts on Indonesia to test other views - a key input for successful budgetary and planning in the strategic freight transport market.
  • Target business opportunities and risks in the Indonesian freight transport sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Indonesia.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs, and latest activity).

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts, views and trend analysis covering freight transport and logistics, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major strengths, weaknesses, opportunities and threats within the freight transport sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2008-2012) and forecasts to end-2019 for all key industry and economic indicators (see list below), supported by explicit assumptions plus analysis of key downside risks to the main forecast including:

  • Transport Sector: Total freight carried by road, rail, inland waterways, maritime, air and pipeline (mn tonnes-km/mn tonnes).
  • Trade: Exports and imports (USDmn) by category of goods (manufactured goods, food, chemicals etc.); top five import and export trade partners (USDmn); imports/exports to each global region (USDmn)
  • Port Data: Throughput (‘000 tonnes) for all major ports in the state.
  • Oil Products Prices: Price forecasts for gasoline and aviation fuel (USD/bbl) at all major global energy trading hubs.
  • Economic Indicators: Nominal GDP (USDbn); real GDP growth (%); GDP per capita (USD); industrial production (%); unemployment (%)

Market Overview

Details of the freight infrastructure in each state by segment (road, rail, air, water and pipelines). Full analysis of the competitive landscape within each segment.

Industry Trends and Developments

Analysis of the latest projects across the freight transport sector (road, rail, air, sea and logistics) including a market overview which provides an outline of the key elements driving development.

Political Outlook

The Freight Transport market reports contain a chapter detailing the political outlook of a given region, examining the domestic politics, long-term outlook and foreign policy, and assessing the impact this could have on freight and transport businesses.

Company Profiles*

Examines the short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Freight Transport reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.