Indonesia Logistics Grew Slower, from 5.45% Last Year to Only 1.27% in Q12020

Amid the coronavirus (covid-19) outbreak that hit throughout any aspects of economy activity, Indonesia logistics sector still grew up in the first quarter (Q1) 2020, but compared to the growth in the same period last year, it was much lower, according to Supply Chain Indonesia (SCI).

In its recent statement, SCI explained cargo volumes in the logistics sector, including transportation and warehousing, in the first quarter of 2020 grew by just 1.27% (year on year), a decline from 5.45% growth registered in the year-ago period.

In the press statement released yesterday (Tuesday, May 12), SCI Chairman Setijadi said: “The decline in volumes in the logistics sector was greatly influenced by the impact of the COVID-19 pandemic. This triggered a drop in demand for goods and commodities, as well as industrial activities.”

Quoting data from the Central Statistics Agency (BPS), Setijadi said that the slow logistic growth was in parallel with the slow economy growth during the period. According to BPS, the economic growth in the first quarter of 2020 was at 2.97% (yoy). Compared to the fourth quarter of 2019, economic growth declined 2.41%.

The logistics contribution to GDP (Gross Domestic Product) was also down. Its contribution was contracted at 5.17% to the GDP, a decrease compared to the first quarter of 2019, when it was registered at 5.53%.

The logistics sector includes the warehousing subsector and transportation support services, as well as post and courier services.

The logistics sector also includes the transportation sub-sector by mode, which covers transportation via rail, land, sea, air, as well as rivers, lakes, and crossings.

Manufacturing Driven Growth

Setijadi said the growth of the logistics sector in the first quarter of 2020 was mainly driven by the manufacturing industry, which grew by 2.06% (yoy); food and drink accommodations, which expanded 1.95%; and trade (1.60%). During the quarter, agriculture, forestry, and fisheries only grew by 0.02%.

Compared to the previous quarter, there was a decline in growth in the sectors of manufacturing (-1.79%); food and drink accommodation (-3.92%); trade (-3.61%); and agriculture, forestry, and fisheries (-1.80%).

In the first quarter of 2020, the transportation subsector that experienced the highest growth rate (yoy) was sea transportation (5.93%); followed by land transportation (5.15%); and river, lake, and ferry transportation (1.16%). Negative growth was seen in rail transportation (-6.96 %) and air transportation (-13.31%).

Meanwhile, the warehousing and transportation support services subsector, as well as post and courier services, also experienced negative growth of -0.73 % (yoy).

“Compared to the previous quarter (q-to-q), all transportation subsectors in the first quarter of 2020 experienced negative growth, with the highest decline (recorded) in air transportation (-23.11%); followed by rail transport (-14.22%), river, lake and crossing transportation (-4.16%); sea transportation (-4.07%); and, land transportation (-0.67%),” Setijadi said.

The warehousing and transportation support services subsector, as well as post and courier services, experienced a significant q-to-q negative growth of -10.89%.

“Household consumption which contributes the most to GDP has shown decreased growth: from 5.02% in the first quarter of 2019 to 2.84% in the first quarter of 2020,” he added.

He said the decline in volumes in the logistics sector was also influenced by negative growth in Indonesia’s exports and imports. The nation recorded a growth in exports of -6.37% and imports of -11.89% (q-to-q).

“The decline in exports and imports occurred because the Indonesian industry became part of the global supply chain affected by the COVID-19 pandemic,” he explained.

Setijadi pointed out the large decline in imports, in addition to the fall in domestic demand, also showed the dependence of Indonesian industry on the supply of capital goods and raw materials from abroad.

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