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Today's Headlines Transportation
Biodiesel, which is a form of diesel fuel that is derived from plants or animals (in the case of Indonesia it mainly uses fatty acid methyl ether, FAME, which is derived from palm oil), has been on the political agenda of Indonesia since the 1990s when the first (in-depth) research was conducted by a number of state agencies.
Although Indonesia’s May consumer prices rose at their quickest pace in more than a year (which exceeded our expectations), Indonesian inflation remains at a comfortable level (for Indonesian standards).
Indonesian ride-hailing company Go-Jek, one of the nation's unicorns, confirmed its plans to expand into other countries in the Southeast Asian region. Over the next couple of months the company will invest USD $500 million to start delivering its ride-hailing services in Vietnam, Thailand, Singapore and the Philippines. Earlier, Go-Jek had already expressed its intention to expand beyond the borders of Indonesia. This time, however, it has given more details about its plans.
The local and thriving ride-hailing market in Southeast Asia is dominated by local startups. Foreign counterparts fail to gain significant market share. The latest proof is Uber Technologies Inc.'s decision to sell its operations and assets in the Southeast Asian region to Singapore-based technology company (but originally founded in Malaysia) Grab. Through this consolidation-move, Uber will obtain a 27.5 percent stake in the combined entity, while Uber's chief executive officer will join the board of Grab.
Pelita Samudera Shipping, a leading company in Indonesia's offshore transshipment market, will list on the Indonesia Stock Exchange in November 2017. The company, which uses its June 2017 corporate earnings report for this corporate move, will offer a 20 percent stake to the public through this initial public offering (IPO).
Indonesia's private shipping companies have raised tariffs for container freight to the eastern region of Indonesia by 25 percent. Carmelita Hartoto, General Chairwoman of the Indonesian National Shipowner's Association (INSA), said shipping companies hiked these tariffs as the previous tariffs were set too low.
The skytrain, an automated people-mover system (APMS) that serves to transport airline passengers and visitors between the three terminals on Soekarno-Hatta International Airport (located just outside Indonesia's capital city of Jakarta), commenced limited operations on Sunday (17/09). This skytrain will enhance the connectivity between the three terminals at Indonesia's busiest airport.
Use of digital cash in transactions of ride-hailing and logistics services providers Grab and Go-Jek is becoming increasingly important. The management of Grab stated that cashless transactions (using smartphones tied to mobile payment systems) are now contributing more than half of the total value of transactions of Grab. Since the introduction of GrabPay, the value of cashless transactions recorded double-digit growth every month.
Express Transindo Utama, Indonesia's second-largest taxi operator, saw its shares surge on Monday morning (19/12) after the company announced a pilot program for ride-sharing and vehicle financing in Jakarta in cooperation with ride-hailing company Uber. The partnership involves the integration of Uber technology with the operations of the Indonesian listed taxi operator. Hence, Express drivers can take orders from the Uber app, in addition to their normal taxi services.
Budi Karya Sumadi, Indonesian Minister of Transportation, said the preliminary study into the medium-speed Jakarta-Surabaya railway could be completed before the end of 2016. In a bid to enhance connectivity and curtail logistics costs the government of Indonesia encourages the construction of a medium-speed railway linking Indonesia's capital city of Jakarta (on the western part of Java) to the nation's second-largest city of Surabaya in East Java. The preliminary study was started three weeks ago.
Latest Columns Transportation
It has been more than a week since the Indonesian government raised its subsidized fuel prices (Pertalite, Pertamax, and automotive diesel fuel) by an average of slightly over 26 percent. One of the most interesting things is to see whether this decision leads to overall growing prices in Indonesian society. After all, fuel is crucial for the movement of goods and services, and has a significant impact on logistics costs.
On 30 September 2021 Indonesia’s House of Representatives (Dewan Perwakilan Rakyat, DPR) approved the 2022 State Budget (Anggaran Pendapatan dan Belanja Negara, APBN) that had previously been proposed by the cabinet. And with 14.2 percent of total government spending being reserved for infrastructure development in the 2022 State Budget, the Indonesian government confirms that it remains committed to much-needed infrastructure development.
The Indonesian government is studying the possibility of cutting toll road prices for specific trucks, hence companies engaged in transportation logistics would be the key beneficiaries. The study comes after stakeholders have complained about the expensive prices that are charged by toll road operators (most of which are state-controlled companies). Indonesian President Joko Widodo said a price cut of up to 30 percent is possible. A cheaper price would improve the competitiveness in the logistics sector.
Overall, low crude oil prices are problematic for stock markets as low prices indicate the world economy is not expanding on full throttle. This curbs investors' risk appetite. Particularly those companies that are active in the oil industry (or in related industries) will likely face declining share prices. However, there are also positive effects of low oil prices. For example consumers' purchasing power should improve because prices at the gas pump are lower, while some companies can curb operational costs. Hence, consumer and transportation stocks should actually benefit from low oil prices.
On Saturday, 01 April, 2017, the new regulations for ride-hailing apps in Indonesia came into effect, designed to protect consumers of these apps and support traditional transportation services such as taxi operators, minivans, buses and motorcycle taxis. The regulations include maximum and minimum tariffs for four-wheeled-vehicle rides that are booked through the online app, as well as a limit on the number of vehicles available. However, authorities will give time to these ride-hailing apps to adjust to the new regulations due to the "magnitude of the technical rules".
Foreigners who live in Indonesia's capital city of Jakarta are well aware of the horrible traffic situation. The lack of sufficient infrastructure development in combination with high car sales in recent years as well as the ever-growing population of Jakarta have resulted in complete standstills in many parts of the city, particularly on weekdays. To cover a relatively small distance in a car or taxi it can take hours, a loss of valuable time. Fortunately, there is a solution to these traffic jams.
Grab, the Malaysia-founded online application used for transportation services, has experienced remarkable growth in Indonesia during the first half of 2016. GrabCar and GrabBike have grown some 250 percent despite a 50 percent cut in its fare subsidy in this period. More than 25 percent of active Grab users in Indonesia use Grab services more than once a month. This success is due to the government's decision to legalize mobile application-based transportation services (under specific conditions) and the re-branding of Grab (formerly it was known as GrabTaxi).
State-controlled construction company Adhi Karya's corporate earnings should rise in the years ahead on the back of the light rail transit (LRT) project that is expected to provide IDR 33 trillion (approx. USD $2.5 billion) worth of contracts for the construction company. Adhi Karya was appointed to construct the Greater Jakarta part of the LRT that will connect Jakarta with the satellite cities around the capital city. According to Trimegah Securities, this project will bring plenty of long-term profit for Adhi Karya.
Two state-controlled companies (both listed on the Indonesia Stock Exchange) are expected to feel the positive impact of the light rail transit (LRT) in Palembang (South Sumatra), a transportation project currently under construction. These two companies are construction firm Waskita Karya and cement producer Semen Baturaja. These two companies are heavily involved in the LRT project that is estimated to cost around USD $520 million. This LRT track is supportive infrastructure for the 2018 Asian Games, to be held in South Sumatra in August 2018.
After experiencing a two-month delay due to permitting and concession trouble, the construction of the Jakarta-Bandung fast train should be able to commence soon. Indonesian Transportation Minister Ignasius Jonan confirmed on Wednesday (16/03) that his ministry agreed to grant a 50-year concession period to the Chinese-Indonesian consortium named Kereta Cepat Indonesia Cina (KCIC). The granting of this concession means that KCIC should be able to secure the necessary construction and business permits soon. The USD $5.1 billion Jakarta-Bandung railway (in West Java) is one of the mega-infrastructure projects of Indonesia.
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