The transportation and logistics industry in Indonesia is expected to grow 15.4 percent in 2020, according to Frost & Sullivan.

According to Gopal R, global vice president of the transportation and logistics practice at Frost & Sullivan, the growth will be driven by improved maritime connectivity and an increase in e-commerce activity.

He also said that, while Indonesia currently has limited logistics infrastructure, average port productivity and above-average carrying costs, the ASEAN Economic Community would unlock untapped opportunities for logistics providers.

Overall, the Indonesian economy is also growing because of high domestic consumption, a rise in exports of manufactured products and improvements to infrastructure investment.

According to Frost & Sullivan, government spending in public infrastructure in Indonesia is expected to reach approximately 15 percent of gross domestic product. The manufacturing industry will also grow an estimated 6.4 percent in 2016.

Logistics providers in the country must change their business models to remain profitable, and should look at air cargo, warehousing, multimodal movement and e-commerce in particular, said Gopal R.