Sector
Transportation
With a population exceeding 280 million people, Indonesia relies heavily on a robust transportation network encompassing sea, air, and land routes to connect its vast island chain and facilitate economic activity effectively. This reliance has made the transportation sector a leading sector in the country.
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Transportation
With a population exceeding 280 million people, Indonesia relies heavily on a robust transportation network encompassing sea, air, and land routes to connect its vast island chain and facilitate economic activity effectively. This reliance has made the transportation sector a leading sector in the country.
In 2022, the sector contributed Rp 983 trillion to the national gross domestic product (GDP) at current prices. Notably, regions where transportation is a leading sector include Aceh, West Sumatra, Bengkulu, Lampung, West Java, the Special Region of Yogyakarta, and Central Kalimantan. Additionally, North Kalimantan, Gorontalo, North Sulawesi, Maluku, East Nusa Tenggara, and Bangka-Belitung consider the transportation sector as a leading sector.
The sector has also experienced a significant boost in recent years, with the transportation and warehousing subsector achieving a staggering GDP growth of 15.93 percent year-on-year (YoY) in the first quarter of 2023.
During the COVID-19 pandemic, Indonesia’s auto industry was severely affected, leading to a decline in both vehicle sales and production. Despite this decline, the transportation sector as a whole continued to attract foreign direct investments (FDI). In 2023, foreign companies poured roughly US$2 billion into the country’s vehicle and other transportation subsectors, highlighting the continued potential that investors see in this sector.
In terms of land transportation, infrastructure projects supporting rail transport such as the Light Rail Transit (LRT), started operations in mid-August 2023. Additionally, the development of Phase 2 of the Mass Rapid Transit (MRT) Jakarta, which includes new routes, is currently underway, with 6 kilometers already completed out of a total of 13.3 kilometers. Moreover, railway transportation saw a year-on-year increase of 69.37 percent in the number of passengers nationwide.
Sea transportation is also an important subsector of the transportation industry, primarily due to the trade sector’s heavy dependence on this mode of transportation. It is highly favored for its perceived economic efficiency in transporting goods. Although sea transport may not be the main method of transportation for many individuals, the number of passengers using sea transport in 2023 increased by 13.30 percent compared to the previous year.
Furthermore, air travel in Indonesia continues to rise with the increase in economic activity. The number of passengers using domestic air transportation increased by 32.69 percent year-on-year. Additionally, Soekarno Hatta International Airport has surpassed Singapore’s Changi Airport to become Southeast Asia's busiest airport in April 2024. According to reports, the airport's flight seat capacity has also reached 3.34 million, the highest among airports in the Southeast Asia region.
Latest News
Pos Indonesia, the country's oldest state-owned enterprise (SOE), has come under renewed scrutiny following the resignation of its president director, Daud Joseph, after only three months in office. His departure was followed by allegations of governance irregularities, including suspected manipulation of the company's financial statements, prompting state asset fund Danantara to launch an audit. The episode underscores the persistent weaknesses in SOE governance that have contributed to the sector's underperformance for years.
Joseph was appointed president director on March 11 after previously serving as operations and safety director at Transjakarta. He filled a leadership vacancy that had been occupied by an acting president director for nearly a year. On June 22, however, Joseph resigned, saying Pos Indonesia required a leader with more specialized expertise to carry out the company's transformation.
His resignation came amid a sharp deterioration in the company's financial performance. Pos Indonesia's revenue fell by 20 percent in 2025, declining from Rp 5.02 trillion (US$286 million) to Rp 3.97 trillion. This was well below the company's five-year average revenue of Rp 5.06 trillion and marked its lowest annual revenue since 2013. Consequently, gross profit declined to Rp 1.5 trillion.
The decline was driven partly by lower logistics revenue from government social assistance distribution programs, including cash, rice and food aid, which fell to only Rp 300 billion. Beyond government-related services, Pos Indonesia also recorded weaker revenue from its logistics, courier and property businesses. By the first half of 2025, the parent company had posted an operating loss of Rp 37.92 billion. Operating cash flow also remained under pressure, with a negative balance of Rp 677.52 billion, extending a trend that began in 2024.
Beyond its weakening financial performance, governance failures have created additional risks for the company. In June 2025, Pos Indonesia disclosed estimated losses of Rp 37.73 billion resulting from employee fraud, up from Rp 34.49 billion estimated at the end of 2024. Around half of the estimated losses originated from the company's Makassar regional office. These figures remain subject to an ongoing audit as investigators examine misconduct that accumulated over several years.
Employee fraud has repeatedly surfaced within Pos Indonesia, ranging from the misappropriation of social assistance funds to broader operational misconduct. Last month, authorities arrested a fugitive linked to corruption in the distribution of funds under the Family Hope Program (PKH) in Cirebon, a case that caused state losses of Rp 264.55 million. Another corruption case in Bengkulu involved the misuse of stamp duty revenue and pension funds between 2022 and 2024, resulting in estimated state losses of around Rp 3 billion.
These recurring governance failures stand in stark contrast to Pos Indonesia's financial recovery after 2019. The company successfully reversed a comprehensive net loss of Rp 104.38 billion in 2019 into a comprehensive net profit of Rp 839 billion in 2024. However, the downturn appears to have resumed, with comprehensive net income reaching only Rp 144.74 billion in the first half of 2025.
The combination of deteriorating financial performance and suspected governance failures has prompted Danantara to intervene. The sovereign wealth fund plans to appoint a new management team to restore Pos Indonesia as a financially healthy, professionally managed and accountable company. Since its establishment, Danantara has consistently emphasized improving governance standards across SOEs by strengthening financial reporting and enforcing accountability for misconduct.
Nevertheless, the impact of these reforms has yet to become evident. Several major SOEs, including MIND ID and Telkom Indonesia, reported weaker financial performance in 2025. Questions have also emerged over Danantara's own reporting practices. For example, Danantara reported Bank Rakyat Indonesia's (BRI) profit at Rp 21.2 trillion for the first four months of this year, while the bank's official financial statements recorded net profit of Rp 15.9 trillion, raising concerns about data consistency and transparency.
The problems at Pos Indonesia should therefore not be viewed as an isolated corporate failure, but as a reflection of longstanding structural weaknesses in Indonesia's SOE governance framework. Unless these underlying issues are addressed, governance reforms under Danantara are unlikely to deliver lasting improvements in SOE performance.
