Economy and Logistics Sector to Grow in 2021

Link Pacific Logistics held a webinar entitled “Economic  and Logistics Business Prospects in 2021” on Wednesday, March 24, 2021. To find out about the condition of the Economy and Logistics Sector in 2021, PT Link Pasipik Indonusa invited Expert Staff for Connectivity, Service Development, and Natural Resources, Coordinating Ministry for Economic Affairs Edi Pambudi and Chairman of the Indonesian Supply Chain Setijadi as speakers.

2021 is an opportunity for Indonesia’s economic recovery because trading partner countries have started to recover. Edi Pambudi said that various economic indicators continued to show an improving trend.

Retail sales in February (2021) have started to improve, confidence from the production side is already at an optimistic level and total investment is increasing. Edi Pambudi added that the KUR (People’s Business Credit) distribution program, especially for production activities, continued to increase, almost reaching the target. In addition, sales of motorized vehicles, which are commonly used as indicators of people’s purchasing power, have increased.

Consumer purchasing power has improved as optimism has recovered, as reflected in a Bank Indonesia survey, namely: Consumer Confidence Index (IKK), Current Economic Condition Index (IKE) and Expectation Index for Economic Conditions (IEK). Ideally, if the index is above 100, this indicates consumer optimism. The IKK January 2021 was still at the pessimistic level (84.9) when the pandemic in Indonesia was at its peak, as was the IKE (63). However, the public sees a recovery that will occur, this can be seen from the IEK which has reached an optimistic level (106.7).

Edi Pambudi also estimated that the cycle of economic growth in Indonesia will reach its peak in the second and third quarters because of the National Religious Holidays (HBKN) or Eid. Various strategies will be taken by the government to accelerate economic recovery, especially vaccinations will be encouraged to reach the community immediately. The prediction of Indonesia’s economic recovery in 2021 itself, conveyed by Chairman of Indonesia’s Supply Chain Setijadi, shows optimism. Quoting various media, Indonesia’s economy in 2021 will grow in the range of 4.5% -5.3%. 

Logistics Sector

Freight transportation by sea tends to be stable, especially for domestic routes. Air and rail transport received a significant impact during the pandemic, but have been gradually improving with the implementation of health protocols and relaxed mobility.

Setijadi conveyed in the second session, that the imbalance of economic growth in various regions has an impact on the logistics sector. Java Island still dominates economic growth with a rate of 59%, followed by Sumatra Island.

The uneven trade balance between regions causes complexity of routes and increases the burden of logistics costs. The trading and transportation margins are increasing, but the additional stages in the supply chain will result in higher freight costs. Even though trade increases, it will not be efficient if the logistics burden is still high. 

Edi Pambudi stated that the transformation from the traditional sector to the modern sector requires a better national logistics system. To do this, smooth connectivity from producers to consumers is required. Producers send their goods to distribution centers so that consumers who order will get goods faster and at lower costs.

Currently, the transformation of the national logistics system is underway with the formation of various kinds of platforms to make this sector more efficient. However, these platforms have not been integrated as a whole. Edi Pambudi said there was a need to build a digital corridor between related business actors in order to more quickly distribute information, data, and proof of agreement as well as to distribute them. This integration must ensure every business actor’s platform flexibility control remains in their hands while making sure these platforms are compatible. 

In the closing session, Chairman of Indonesian Supply Chain Setijadi said the role of logistics service providers is needed to consolidate at the collection and delivery stages of commodities, including in facilitating the implementation of cold chains. Setijadi also encouraged logistics service providers to continue to develop their services and business models. In order to be more competitive, companies with basic services need to continue to transform into third-party logistics providers (3PL), lead logistics providers (LLP), and lead logistics manager (LLM). 

The Moderador in this webinar who is the Commissioner for Link Pacific Logistics Subagiyo said that synergy and collaboration from all parties is needed to foster an improving business climate. So that exports can grow and have contributions for Indonesia’s economic growth ahead of Indonesia Maju in 2045.

About Link Pacific Logistics

Link Pacific Logistics is a total logistics provider under PT Link Pasipik Indonusa which has been established since 2006. During its 15 years of existence, Link Pacific Logistics service scoop has covered Sea Freight both export, import, LCL and FCL; Air Freight Export and Import; SOC (Shipper Owned Containers) services from Jakarta-Semarang-Surabaya to Singapore and from Singapore to Jakarta-Semarang-Surabaya; Domestic Projects, Trucking, Sea and Air Export Import Custom Clearance, Warehousing, PPJK, Dangerous Cargo, and Ecommerce China-Jakarta.

With branch offices spread across major port cities in Indonesia, as well as in Cikarang, Bandung, Soekarno Hatta Airport and Malaysia, Link Pacific Logistics is a solution for all logistical needs for all national, regional and international customers.

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