• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

OpenAI CEO Warns: ‘Not A Huge Amount Of Time’ Until China Overpowers American AI

May 9, 2025

Short and Funny Sayings for a Happy Summer with Friends

May 9, 2025

Trump Announces First Post-Tariff Trade Deal

May 8, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Friday, May 9
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    OpenAI CEO Warns: ‘Not A Huge Amount Of Time’ Until China Overpowers American AI

    May 9, 2025

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025

    Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Finance»Indonesia Seeks a Fairer Deal for Its Domestic Logistics Industry
Finance

Indonesia Seeks a Fairer Deal for Its Domestic Logistics Industry

October 11, 2023No Comments6 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Indonesia Seeks a Fairer Deal for Its Domestic Logistics Industry
Share
Facebook Twitter LinkedIn Pinterest Email
Advertisement

Indonesia, a nation of 17,000 islands that stretches more than 4,800 kilometers from the western tip of Benggala Island to the Torasi Estuary at the boundary with Papua New Guinea, has a population of nearly 280 million. It has the largest economy in southeast Asia, and the world’s seventh largest, with a GDP in 2021 approaching $1.2 trillion.

Indonesians are increasingly active on social media, and its internet economy, which reached $77 billion in 2022, is expected to expand to $130 billion by 2025. The e-commerce market alone is expected to generate $45 billion in 2023, growing to $67 billion by 2027 as user penetration grows from the current 71 percent to nearly 86 percent.

According to the Indonesian Chamber of Commerce and Industry (Kadin), the nation’s logistics industry is expected to grow by more than 6 percent a year, sustained by rapid growth of the nation’s digital economy. Akbar Djohan, the head of Kadin’s logistics and supply chain department, boasts that the transportation and warehousing sectors that represent the core of the logistics industry grew by nearly 16 percent in the first quarter of 2023.

One problem facing Indonesia’s logistics industry, stemming from its weak connectivity infrastructure, is the challenge of high costs. Djohan says that his nation’s logistics costs could reach as high as 23 percent of GDP, while Thailand, China, and Malaysia have logistics costs no higher than 15 percent of GDP. Logistics costs in Japan and Taiwan, by contrast, are under 10 percent of GDP.

A major factor in Indonesia’s high logistics costs is its archipelagic topography, which means that transport of goods often requires the repeated loading and unloading of goods between various modes of transportation. For that reason, the improvement of logistics governance requires that the stakeholders in transportation and logistics, and the ministries that govern their activities, prioritize cost efficiency.

See also  Indonesia Announces Hefty Tariffs on Chinese-made Goods

Enjoying this article? Click here to subscribe for full access.

In recent years, Indonesia has made significant improvements in its Logistics Performance Index by strengthening its logistics and supply chain infrastructure – particularly roads and highways. The nation’s Industrial Revolution national road map calls for the creation of a “smart logistics” plan to implement a modern logistics and supply chain system across the vast country.

Since taking office in 2014, President Joko Widodo has launched a major infrastructure campaign that includes some $450 billion of upgrades, including over 3,200 kilometers of new highways and nearly 800 kilometers of new toll roads, plus new seaports and airports. There is still a long way to go to reach full modernization, yet the push for full digitization has taken a back seat to the government’s primary focus on physical infrastructure projects.

The biggest challenge to continued improvements, therefore, lies with modernizing operations by Indonesian-owned private companies, many of which lag far behind. One problem is that local trucking companies, many still manually recording delivery logs, typically lack the technology and skills – and money – to digitize their processes.

Advertisement

Meanwhile, fierce competition within the digital economy sector leaves little wiggle room for retooling by underfunded Indonesian enterprises, giving the 70 percent of the industry controlled by foreign companies a decided advantage.

Manorsa P. Tambunan, secretary of the Indonesian Digital Economic Logistics Association (ALDEI), sheds light on the implications of foreign dominance of Indonesia’s logistics industry. One tangible threat is the inevitable occurrence of unhealthy competition due to foreign investors possessing stronger capital and steering towards price wars.

See also  China Gloom Made Some Assets ‘Ridiculously Cheap,’ Aimco Says

According to Zhenhub, many foreign investors, including Tokopedia, Lazada, Shopee Indonesia, and BukaLapak, are investing in Indonesia’s e-commerce logistics industry due to the market’s promising prospects. Investors know there is money to be made and are already making moves to reap the benefits.

“This significant shift encompasses a growing dominance of foreign players seizing market share with greater strength, leading to a market structure shift into an oligopsony, where logistics partnerships are no longer dependent on user (online buyer) preferences, but regulated by e-commerce platforms,” said Tambunan.

In recent years, Tambunan added, price competition within the courier industry has uncovered instances of predatory pricing. Cost dynamics are closely related to volume scale in this industry, where well-capitalized players implement massive investment strategies to build service capacity and set selling prices below production costs to capture market share and harm domestic competitors.

This is a big problem, says Tambunan, because there are insufficient monitoring mechanisms for ascertaining that the net prices do not fall below the cost of production. Gross prices are the published rates, but many providers sell below the gross price; but it is illegal to sell below the cost of production – a tool for destroying competitors.

Furthermore, according to Tambunan, these price wars negatively impact couriers. The pressure to lower prices impacts courier wages, as courier companies shift from permanent employees to independent contractors. After severing employment relationships, employee earnings are no longer guaranteed to align with regional minimum wages. Yet, the courier industry employs a significant number of workers, potentially reaching hundreds of thousands.

Enjoying this article? Click here to subscribe for full access.

See also  Why pay transparency is on the rise for jobseekers

Tambunan said that he is also concerned that, because of the dominance of foreign entities of Indonesia’s logistics industry, the information they acquire might not be properly safeguarded and could be misused.

Tambunan emphasized the need for equal opportunities in the logistics industry. In this regard, the government, as the regulator, plays a crucial role in maintaining fair play rules within the scope of business in Indonesia and preventing excessive price wars, while protecting all parties involved, including entrepreneurs, consumers, and industry workers.

“The government, via Presidential Regulation 49 of 2021 (Perpres 49/2021), has set a maximum foreign ownership limit of 49 percent (in the courier activity sector) to protect the domestic industry,” Tambunan noted. Yet he said that the largest courier company in Indonesia is 100 percent owned or controlled by a foreign entity.

Advertisement

International giants like DHL, UPS, TNT, and FedEx all do significant business in Indonesia, but ALDEI claims that J&T Global Express Ltd., a foreign company based overseas, owns 100 percent of the shares of J&T Indonesia, which had the highest shipping volume in Indonesia in 2020.

Tambunan said that the foreign ownership issue deserved “serious attention” from the authorities and that sanctions may be needed to protect all aspects of the future logistics industry and to provide opportunities for domestic players to compete fairly.

The renewed focus on assisting Indonesian-owned businesses to modernize while protecting them from predatory foreign firms could help support continued rapid economic growth across the gigantic archipelago. But it will all be for naught if the bulk of the added wealth accrues to foreign-owned entities and not to the people of Indonesia.

Deal Domestic Fairer Indonesia Industry Logistics seeks
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

‘Silver Lining’: Private Domestic Investment Soared In First Quarter Of 2025

April 30, 2025

‘They Came With Their A Game’: Donald Trump, Scott Bessent Reveal Which Country Could Be Close To Making Trade Deal

April 24, 2025

Ending China’s De Minimis Exception Brings 3 Benefits for Americans

April 17, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

Elon Snubbed? Xi Jinping Grants Bill Gates Warm Beijing Meeting

June 17, 2023

FTX Felon Heading To Prison Celebrates ‘New Position’ On LinkedIn And The ‘Congratulations’ Poured In

October 11, 2024

Former NBA Player Dwight Howard Walks Back Calling Taiwan a ‘Country’ After Genocidal China Objects

May 13, 2023

Amid China Loan Talks, Pak Army Chief Says Pakistanis Must Throw Out Beggar’s Bowl

July 24, 2023
Don't Miss

OpenAI CEO Warns: ‘Not A Huge Amount Of Time’ Until China Overpowers American AI

Business May 9, 2025

The United States has “not a huge amount of time” before China reaches parity or…

Short and Funny Sayings for a Happy Summer with Friends

May 9, 2025

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,111)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,627)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

Republicans release top targets of Democratic-held House seats in 2024

March 23, 2023

Wikipedia Co-Founder Jimmy Wales Surrenders Admin Privileges Following Site Controversy

May 2, 2023

Mainstream Hollywood Hates America, So It Hates ‘Special Ops: Lioness’ Too

July 24, 2023
Popular Posts

OpenAI CEO Warns: ‘Not A Huge Amount Of Time’ Until China Overpowers American AI

May 9, 2025

Short and Funny Sayings for a Happy Summer with Friends

May 9, 2025

Trump Announces First Post-Tariff Trade Deal

May 8, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.