Logistics in Indonesia down by more than 50 percent amid COVID-19 outbreak

Jakarta (VNA) - Logistics companies have experienced a more than 50 percent decline in overall business performance since the COVID-19 outbreak hit Indonesia in early March, the Indonesian Logistics Association (ALI) reported.

The association’s chairman, Zaldy Ilham Masita, said logistics volume has been down 60 to 70 percent across the board.

Zaldy said business-to-consumer (B2C) and customer-to-customer (C2C) delivery services had experienced growth despite the outbreak but the increase was too small to compensate the sharp drop in the business-to-business (B2B) segment.

The B2C and C2C segments recorded growth due to the increase in demand for food, perishables and medical supply deliveries despite large-scale social restrictions, he said, adding that all three categories had seen a 100 percent increase since March.

He went on to say that during Ramadan, shipment volume usually increased by 30 to 50 percent, adding that however, this year the volume would be down 40 percent from last year.

The prediction is based on lower consumer spending because there have been layoffs everywhere and holiday bonus (THR) cuts, he said.

Zaldy also predicted that the logistics sector would return to normal in the first quarter of 2021. In the meantime, he said, logistics companies could begin digitalizing operations and broaden services, such as catering to more B2C clients to survive the outbreak. 

Supply Chain Indonesia (SCI) chairman Setijadi also said spending on tertiary goods such as automotive, electronics and fashion had declined amid the outbreak, while medical supplies and health products were likely to continue their growth trend. 

Previously, the SCI estimated the logistics sector would grow around 12.7 percent this year, with a contribution to GDP of 993.9 trillion Rp (63.9 billion USD). However, Setijadi said the SCI would revise the estimate because COVID-19 had severely affected global trade and logistics activities./.