Transportation and Logistics

Indonesia is an archipelago country with more than 17,500 islands, and extends 5,120 kilometers from east to west and 1,760 kilometers from north to south.

  • Indonesia’s many islands require a combination of transport means to move passengers and goods.
  • Logistic performance is low compared to neighboring countries.
  • The 7th biggest merchant marine is facing the fact that it is cheaper to export than supply the Indonesian market.
  • Indonesia is the world’s 8th busiest air transportation sector and is increasingly important in personal transport.
  • Transport is facing congestion issues, needs to develop internal connections between gateways and internal markets, needs a  Trans-Java highway, lacks quality tracking.

 

The counry’s total land area is 1,919,317 square kilometers and the surrounding sea areas bring an additional 5 million square kilometers. It has five main islands: SumatraJavaBorneo ( also known as “Kalimantan”), Sulawesi (also known as “Celebes’), and New Guinea; then two major archipelagos (Nusa Tenggara and the Maluku Islands); and sixty smaller archipelagos.

Indonesia shares four of its islands with other nations: Borneo is shared with Malaysia and BruneiSebatik with Malaysia, Timor with East Timor, and the newly divided provinces of Papua and West Papua share the island of New Guinea with Papua New Guinea.

The World Bank’s 2010 Logistics Performance Index ranked Indonesia 75th out of 155 countries, far below that of neighboring countries such as Singapore, Malaysia, Thailand, Vietnam, and the Philippines. Good logistics sector performance implies low transportation costs for goods, which in turn enhances the competitiveness of an economy.

Road transport is predominant, with a total system length of 437,759 km in 2008. About 82% of passengers travel by road. Buses, minibuses and minivans (Angkot) are key for public transportation in Indonesia. In cities there are various Kopaja buses.  In Jakarta the backbone of public transportation is the Transjakarta bus rapid transit with dedicated roads. Millions of people use motorbikes and scooters. Traffic jams are common in major cities, Jakarta has some of the worst traffic on the planet. Every month there are an average 100,000 newly registered cars. Indonesia has highways, some National roads and some toll roads.

 

Railway System Transportation

The railway system has four unconnected networks with total of 3370 km in Java and Sumatra, primarily dedicated to transporting bulk commodities and long-distance passenger traffic. In 2011, it transported 20.3 million passengers by rail (times kilometers traveled makes it 14th in the world, 2011) and 7.2 million metric tons (times kilometers traveled makes it 38th in the world, 2011). Plans to develop and extend the current network are facing a lack of funding.  A mass rapid transit system is under construction in Jakarta and is scheduled to be operational in 2018.

The only other areas in Indonesia that have railroads are Sumatra and Kalimantan. There is a new railway from Medan to the new Kuala Namu International Airport, which has been operational since July 2013. The island of Kalimantan is to get a 122 km long railway for the transport of coal.

 

Sea Transportation

Sea transport is extremely important for economic integration and for domestic and foreign trade. It is well developed, with each of the major islands having at least one significant port city. In 2010, there were 1,340 vessels to transport goods, not including military ships, which ranks Indonesia to 8th in merchant marine.  It had 9.044.435 containers from land to sea transport, and vice versa, in twenty-foot equivalent units (the standard-size container) which puts Indonesia at 16th place in container port traffic.

The role of inland waterways is relatively minor and is limited to certain areas of Eastern Sumatra and Kalimantan. Indonesia has  21500 km, and ranks seventh among countries with waterways.

 

Air Transport

Air transport is significant in places where there is little or no land or water transport. Indonesia has a growing network of domestic airlines and all its major cities are connected. With 77 million of passengers, Indonesia ranks 8th in air travel. The country’s main international hub is Jakarta’s Soekarno-Hatta International Airport. However for Indonesia safety issues are arising despite the  the fact that most of the planes are new. These issues include a lack of trained staff, pilots and technicians. Several recent accidents have helped make Indonesia’s air transport system one of the least safe in the world. In 2013 Indonesia had 673 airports and 76 heliports.

Pipelines transport crude oil (2505km), petroleum (456km), and natural gas (1703km).

INDONESIAN TRANSPORTATION SHARE

Mode Passenger (%) Freight (%)
Road Vehicle 84.13 91.25
Rall 7.32 0.63
Insular 4.83 0.99
Maritime 1.76 7.07
Air 1.52 0.05
Waterways 0.43 0.01

Congestion is a major issue that the Indonesian transportation sector should solve very soon. Improving connections between gateways and internal markets is a priority because it is currently cheaper and easier to ship to Singapore than within Indonesia. Road traffic also lacks development of a national road infrastructure, such as Trans-Java highway, and needs improvement in the quality of trucking and freight-forwarding services.

 

You can read here about

The automotive sector as a potential major field investment in Indonesia
Indonesia as one of the world’s fastest growing aerospace industries

 

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