Liga Asuransi – Dear Logistics Friends, Forwarders, Shippers, and Shipowners,
How are you? We hope you are all in good health and your business continues to grow rapidly. Can’t believe it, we have entered the year 2025, an important momentum to reflect on the business journey as well as develop new strategies to achieve greater opportunities.
In this blog, as always, we are committed to helping you understand risk management and the importance of insurance in supporting the smooth operation of your business. We believe, with the right protection, you can manage risk with more confidence, so that your business can continue to grow and be competitive in an increasingly dynamic market.
If you find this article useful, don’t hesitate to share it with your colleagues who may need similar information. We are always open to discuss and provide the best solutions for your logistics and forwarding needs.
Let’s start 2025 with optimism and the right strategy. Together, we can face challenges and take advantage of existing opportunities!
The logistics and forwarding industry plays a strategic role in supporting the national economy. As the backbone of the supply chain, this sector connects producers, distributors and consumers in various regions, both domestic and international. In the context of Indonesia, which is an archipelagic country with more than 17,000 islands, logistics plays a key role in ensuring efficient and equitable distribution of goods throughout the archipelago.
The logistics sector’s contribution to Indonesia’s Gross Domestic Product (GDP) continues to show significant growth. Data shows that the transportation and warehousing sector, which is the core of logistics, contributes 5-7% to total GDP. This potential is even greater with the development of the e-commerce sector, which is predicted to grow by double digits every year, driving demand for faster and more efficient logistics services.
In addition, the Indonesian government has identified logistics as one of the important pillars in increasing global competitiveness. Large-scale infrastructure projects such as the construction of toll roads, ports and new airports are designed to cut logistics costs which are currently still high, reaching 23.5% of GDP—far above the global average of around 8-10%.
With this strategic role and large contribution, the logistics industry in Indonesia is not only a driver of the national economy, but also the key to increasing the competitiveness of Indonesian products in the global market. Digital transformation and cross-sector collaboration will be important factors in driving sustainable growth in the future.
Global Trends Impacting the Logistics Industry in 2025
- Digitalization and Technology
Digital transformation is the main pillar in the development of the global logistics industry. Technologies such as Artificial Intelligence (AI), Internet of Things (IoT), Blockchain, and Big Data have changed the way logistics companies operate. AI is used to predict demand, optimize delivery routes, and improve inventory management. IoT enables real-time monitoring of the condition of goods during delivery, ensuring transparency and safety. Blockchain creates a safer and more efficient supply chain ecosystem by minimizing the risk of data manipulation and speeding up the documentation process.
Big Data, on the other hand, provides deep insights into consumption patterns, helping companies customize services according to market needs. Automation is also an important factor, with the use of technology such as robotics in warehouses to speed up the process of sorting and packaging goods, as well as drones for short-distance deliveries. This innovation increases operational efficiency, reduces costs and speeds up delivery times.
- E-commerce and Changing Consumer Behavior
The surge in e-commerce is one of the main drivers of demand for logistics services. The rise in online shopping is driving the need for faster and more flexible delivery. Consumers now expect services such as same-day delivery or delivery within hours. To meet these expectations, logistics companies must develop extensive distribution networks, utilize technology for inventory management, and increase last-mile delivery capacity.
Additionally, e-commerce drives the fragmentation of shipping volumes, where goods shipped in small but frequent quantities require different supply chain management than traditional shipping. Digital platforms and logistics marketplaces are solutions for connecting small and medium enterprises (SMEs) with efficient and affordable delivery services.
- Sustainability and ESG
The demand for sustainability is becoming increasingly important in the logistics sector. Logistics companies around the world are starting to adopt Environmental, Social, and Governance (ESG) principles in their operations. Environmentally friendly logistics or green logistics is a priority, including the use of electric vehicles, optimizing delivery routes to reduce carbon emissions, and developing energy-efficient warehouses.
On the regulatory side, global policies such as carbon emission reduction targets and commitment to the Paris Agreement encourage logistics companies to invest in green technology. Consumers are also increasingly concerned about their environmental impact, so companies with sustainability initiatives are more likely to win customer loyalty.
Key Challenges to Overcome in the Logistics Industry
- Government Regulations and Policies
One of the big challenges in the Indonesian logistics industry is the complexity of government regulations and policies. Bureaucratic obstacles, such as slow licensing processes and overlapping between agencies, slow down logistics operations. Apart from that, tax policies that are less flexible often become a burden for business actors, especially for MSMEs who want to take advantage of modern logistics services.
The government plays an important role in creating a more competitive logistics ecosystem. Simplification of regulations, implementation of a digital system for licensing, and harmonization of policies between agencies are important steps that must be taken. In addition, increased investment in logistics infrastructure is also needed to support the development of this industry, including the construction of new toll roads, ports and airports that can reduce shipping times and costs.
- High Logistics Costs
Logistics costs in Indonesia are still one of the highest in Southeast Asia, reaching around 23.5% of GDP, well above the global average of 8-10%. Factors causing these high costs include inadequate infrastructure, a long distribution process due to the large number of intermediaries, and dependence on land transportation which is more expensive than sea or train transportation.
Solutions to lower logistics costs involve investing in the development of multimodal transportation that integrates land, sea and air routes. In addition, digitizing logistics processes, such as using technology-based platforms to connect shippers and logistics service providers, can cut administrative costs and increase efficiency. The government can also play a role by providing incentives for the adoption of new technology and encouraging healthy competition among industry players.
- Availability and Competency of Human Resources
The lack of skilled labor in the logistics sector is a serious challenge. Many workers in this sector do not have sufficient technical skills, especially in the use of the latest technology such as supply chain management software, data analysis, or warehouse automation operations. This hinders companies from increasing productivity and competitiveness.
To overcome these challenges, it is important for governments and industry players to invest in professional training and certification. Vocational education programs that focus on logistics, collaboration with educational institutions, and technology-based training initiatives can improve workforce competency. With a skilled workforce, the Indonesian logistics industry can better face global challenges.
Innovation and Forwarding Strategy in the Future
- Technology in Forwarding
Utilization of digital technology is the key to creating transparency and efficiency in forwarding. Digital platforms now enable logistics players to monitor the movement of goods in real-time, providing full visibility to customers. This technology also reduces the risk of administrative errors and speeds up the decision-making process. For example, logistics companies can use cloud-based applications to process shipping documents, track optimal routes, and manage inventory in an integrated manner.
Cloud-based supply chain management is an effective solution for maximizing collaboration between all parties in the logistics ecosystem. Cloud-based systems allow data to be accessed in real-time by manufacturers, distributors and logistics service providers, thereby reducing inefficiencies due to information discrepancies. The technology also supports process automation such as warehouse management, delivery planning and fleet optimization, all of which contribute to cost savings and increased speed of service.
- Collaboration and Partnership
The synergy between logistics companies, e-commerce and technology startups plays an important role in creating a more solid forwarding ecosystem. Technology startups present new innovations such as logistics marketplaces that connect shippers with service providers directly, cutting out long chains of intermediaries.
Service integration is becoming increasingly important to meet increasingly complex customer needs. Forwarding companies that provide one-stop service solutions, such as customs management, warehousing, and last-mile delivery, will be more competitive in the market. Strategic partnerships with e-commerce companies also enable increased service capacity, especially in the face of surges in demand during certain periods such as online shopping festivals.
- The Role of Multimodal Logistics
Multimodal transportation, which integrates land, sea and air routes, is a future solution to increase forwarding efficiency. By using a combination of transportation modes, companies can reduce shipping costs and reduce transit times, especially for cross-regional and international shipments.
Multimodal transportation optimization includes utilizing existing infrastructure, such as ports and railways, to speed up the distribution of goods in large quantities. At the international level, cross-border cooperation in building logistics corridors will also expand export and import opportunities, providing competitive advantages for forwarding companies.
Predictions and Projections for 2025
- Logistics Industry Growth Figures
The logistics industry in Indonesia is projected to continue to grow in line with the post-pandemic national economic recovery. The logistics market value is estimated to reach USD 100 billion by 2025, with an average annual growth rate (CAGR) of around 8-10%. This growth is driven by various factors, such as increasing domestic and international trade activities, growth of the e-commerce sector, and massive investment in infrastructure.
National economic recovery has a direct impact on logistics volumes. Increased domestic consumption and expansion of the manufacturing sector creates a higher need for shipping goods. In addition, accelerating infrastructure development, such as toll roads, ports and railways, contributes to the efficiency of logistics operations, reduces distribution costs and increases the competitiveness of Indonesian products in the global market.
- The Role of Startups and Technological Innovation
Logistics startups in Indonesia play an important role in the transformation of this sector. Companies such as Shipper, Waresix and Deliveree have become major players bringing innovative solutions to logistics challenges. With a focus on digitalization, the startup offers services such as an app-based platform for delivery booking, warehouse management, and delivery route optimization.
Technological innovation from startups also makes it easier for small and medium enterprises (SMEs) to access affordable and efficient logistics services. Additionally, fintech is starting to enter the logistics sector through financing solutions such as factoring, which helps logistics companies and shippers manage their cash flow. This technology-based financing allows business actors to speed up payments and fund operations without the burden of large working capital.
- Growth Potential in New Regions
The eastern region of Indonesia is the focus of future logistics growth. Infrastructure development in the region, including new ports and land transportation routes, opens up huge opportunities to increase the distribution of goods to previously difficult-to-reach areas. Regions such as Sulawesi, Maluku and Papua are now targets for logistics investment, especially to support the distribution of basic necessities, agricultural products and mining products.
Apart from that, the development of regional logistics routes in Southeast Asia provides new opportunities for Indonesia. As part of ASEAN, Indonesia has a strategic position in initiatives such as the ASEAN Economic Community (AEC) and the Regional Comprehensive Economic Partnership (RCEP). Cross-border logistics routes, both by sea and air, can increase import-export efficiency and expand markets for local products. Projects such as the ASEAN maritime logistics corridor also provide easier access to international markets.
2025 will be an important momentum for the Indonesian logistics industry. Growth in market value, supported by economic recovery, technological innovation and the development of new regions, will push this sector in a more advanced direction. Logistics and fintech startups are the main drivers, while the potential of eastern Indonesia and the integration of regional logistics routes create promising opportunities. With the right strategic steps, the logistics industry in Indonesia will continue to be a driving force for the national economy and strengthen its position in the global market.
The Important Role of Insurance in the Logistics and Forwarding Industry 2025
Insurance plays a crucial role in supporting the sustainability and efficiency of the logistics and forwarding industry in 2025. With increasing shipping volumes due to the growth of e-commerce and globalization, risks in the supply chain such as goods damage, delays, losses or operational disruptions are becoming increasingly complex.
Insurance provides financial protection against these risks, allowing logistics and forwarding companies to focus on operational efficiency without worrying about potential large losses. Additionally, liability insurance such as Freight Forwarder Liability (FFL) and Marine Cargo Insurance helps ensure compliance with international standards and provides confidence to customers.
In the digital era, the integration of technology in insurance services, such as real-time claims tracking, increases transparency and ease of process. With this role, insurance becomes an important foundation in creating a strong and competitive logistics ecosystem.
The Important Role of Insurance Brokers
Experienced insurance brokers, such as L&G Insurance Brokers, play a strategic role in helping companies understand, manage and mitigate risk. In complex industries such as logistics, forwarding and other sectors, insurance brokers act as independent advisors who understand clients’ specific needs and design appropriate insurance solutions.
L&G Insurance Brokers brings excellence through a deep understanding of the insurance market, access to leading insurance companies, and the ability to negotiate the most competitive premiums and policy terms. They also educate clients about risks that may not be visible, such as supply chain disruption or legal liability, and recommend comprehensive coverage such as Marine Cargo Insurance, Freight Forwarder Liability (FFL), and Professional Indemnity Insurance.
Additionally, L&G has experience in handling claims, ensuring a fast and fair process so clients can focus on their core business. With a technology-based approach, such as the LIGASYS digital platform, L&G increases service efficiency and provides full transparency to clients. As a strategic partner, L&G Insurance Broker not only provides insurance protection, but also becomes the main driver in creating a more resilient and competitive business.
Conclusion
The logistics and forwarding industry in 2025 faces great opportunities with rapid market growth, digital transformation and the development of new regions. However, challenges such as regulations, high logistics costs, and the need for skilled human resources must be overcome immediately. Insurance plays an important role in providing protection against operational risks, while experienced insurance brokers such as L&G Insurance Brokers are strategic partners who provide comprehensive, transparent and technology-based insurance solutions. With innovation, collaboration and the right strategy, Indonesia’s logistics ecosystem is ready to become more competitive, support national economic growth and strengthen its position in the global market.
For all your insurance needs, Contact L&G Insurance Brokers Today!
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