Challenges Faced by Logistics Businesses in 2023

Recession Forecasted, 2023 Will Be a Tough Year

The Organization of Economic Cooperation and Development (OECD) released its latest prediction on the world’s economy in 2023. This organization under the United Nations believes that the world’s economy will go into recession that year.

According to this organization, the indications can be seen in how the central banks in many developed countries withhold interest rates. The central bank of the United States (The Fed) is predicted to withhold interest rates at 5% or more.

See also: The Impact of a Global Recession on Indonesia’s Logistics Sector

The central bank of England (Bank of England/BoE) and European Central Bank (ECB) also withhold interest rates at 4% or more.

“Economic growth is projected to keep declining throughout 2023 and the first semester of 2024. The high cost of energy and the tightening of financial condition causes this and results in the rise of household expenses," BoE stated on Friday (11/11/2022).

Previously, the International Monetary Fund released a recent official statement that predicted the global economic growth in 2023 to be 2.7%. This number declined from 3.2% in 2022.

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While the World Bank predicted it would not happen, it acknowledged that the global recession indicators have already been felt this year. These indicators are the decline of the world’s economic growth, the decline of demands from developed countries, and the decline of commodities prices in the global market.

In addition, there has been capital reversal or withdrawal by foreign investors. These indicators have been felt across the world, including in Indonesia.

Challenges Faced by Logistics Sector in the Threat of Recession

The decline in demand from developed countries for Indonesian commodities indicates the decline in commodity prices. This even happens to various key commodities, such as mining or farming products. These indicators will eventually impact other sectors in the country, including logistics.

The Minister of Communication (Menhub), Budi Karya Sumadi, in the Bisnis Indonesia Logistics Forum & Awards 2022 virtual discussion on Tuesday (11/8/2022), also acknowledged the potential impacts of the recession, especially on the logistics sector.

See also: The Key Role of Transportation in Logistics

"This will further decline the flow of goods and services. Preventive measures need to be taken to face the various possibilities within the next year; one of them is creating regulations that support logistics,” he said.

Supply Chain Indonesia Chairman, Setijadi, reminded business people to take alternative measures so that the business world can survive or even grow. This can be done by strengthening domestic logistics based on domestic demands and supply strength.

With the supply of domestic raw materials and products for domestic consumption, businesses will continue to run even amid a global recession, Due to the population size of 273.87 million, domestic demands will keep growing.

Meanwhile, business people are reminded to maintain the domestic supply chain as consumers of the logistics sector. Logistics efficiency in the supply chain also needs to be improved. “This is especially to reduce dependency on the global supply chain to a minimum,” Setijadi asserted.

See also: Transportation and Logistics Boost National Economic Growth

Improvements in logistics and supply chain efficiency, according to Setijadi, will slow the decline of products and commodities prices, which is very important during a recession. “From the global perspective, the rise of products and commodities competitiveness can potentially increase export volume,” Setijadi said.

Efficient logistics cost and effective processes are key factors. Therefore, effective and efficient logistics companies are a must for business people.

In this regard, PT Serasi Autoraya (SERA) is among such companies. SERA is a subsidiary company of PT Astra International Tbk, renowned for its biggest transportation and logistics solutions in Indonesia.

First established to provide vehicle rental solutions, it has become the largest, industry-leading transportation provider. The service caters to fleet management needs: passenger and goods vehicles.

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For 32 years, this Astra Group company has continuously created innovations to improve the quality of its services.

Now SERA owns a logistics services unit called SERA Logistics or SELOG, that offers fast, accurate, and safe logistics services. It is supported by advanced technologies and human resources that have been carefully trained and are reliable in providing services.

For information about SERA business services, please visit the official website