The Indonesian Logistics Reckoning: Demand is Booming, But So Are the Red Flags
Indonesia’s last-mile sector is under pressure. From VC cuts to rising costs, find out why many logistics startups won’t survive the next year.
Over the past five years, Indonesia’s logistics startup scene has resembled a rocket on overdrive. Fueled by cheap venture capital, it soared. Market analysts cheered. Investors nodded solemnly at forecasts filled with billions in GMV. Founders talked about “unlocking Indonesia’s archipelagic potential” as if the real innovation was geography itself.
And for a while, the rocket flew true. Parcels moved, apps were downloaded, motorbike fleets expanded, and middle-class Indonesians embraced e-commerce with the enthusiasm of a country skipping the mall era entirely. Shopee, Tokopedia, and TikTok Shop turned shopping into muscle memory.
But the mood has shifted. Ninja Van’s valuation cut and layoffs were tremors. Signals that the market’s patience is wearing thin. Underneath the surface-level growth lies a harder truth: the industry is running out of illusions.
The model that once made sense now looks brittle. Profitless growth is no longer excused with a wink. In a world where money costs something again, logistics startups can’t keep mistaking shipping volume for business health.
When “Demand” Is a Distraction
There’s no shortage of demand in Indonesia’s e-commerce sector. On the surface, things look vibrant: over US$65 billion in GMV recorded in 2024, with parcel volumes still climbing steadily. For logistics startups, this has been waved around like a victory banner. More parcels must mean more business. More business must mean growth. Right?
Not quite. The problem isn’t volume. It’s the value of that volume. The average transaction across major platforms like Shopee still sits around US$10, which creates a painful dynamic: even a modest US$1.20 last-mile cost eats up over 12% of the basket, and that’s before salaries, fuel, customer support, and the occasional return to sender. Add all that, and the cost-to-serve often exceeds the revenue per parcel.
Buyers, understandably, don’t want to pay shipping. Sellers are already operating on razor-thin margins. And platforms, no longer flush with VC cash, are starting to phase out the era of blanket subsidies. What you’re left with is a parcel that nobody wants to pay for, and yet somehow, everyone’s still delivering.
This is where things get dangerous. The industry keeps pointing to parcel volume as evidence of health. But volume without margin is a vanity metric. It looks good until the bills come due. And right now, that bill is getting bigger.
So yes, the demand exists. But demand that only works when subsidized isn’t really demand. If your customer only buys when shipping is free, you don’t have a customer. And if that’s what’s driving your growth story, it might be time to revise the narrative before someone else does it for you.
Metrics Are Easy to Fake When Nobody’s Looking
Indonesia’s logistics sector has a transparency problem. Not in the philosophical sense, but in the deeply practical, spreadsheets-don’t-match kind of way.
This isn’t a software business where every interaction is logged and timestamped. It’s a human business and that makes clean data hard to come by. The sheer complexity of tracking who moved what, where, and when opens the door for what can politely be called creative accounting.
Returns are counted as deliveries.
Failed drop-offs are routed again and again and still recorded as multiple successful “touchpoints.”
Unit costs from Jakarta are presented as if they apply to rural Kalimantan.
Subsidies from platforms often get quietly lumped into topline revenue. Meanwhile, costs are flattened and averaged out, smearing over the variance that actually matters. The result is a version of the business that looks cleaner than it operates.
Then there’s the issue of delayed payments to riders, agents, and 3PL partners. This is sometimes spun as efficiency or optimization. In reality, it’s cash flow juggling. It can work, until it doesn’t.
And no, fraud isn’t guaranteed, but it’s certainly possible. In a system this opaque, it’s surprisingly easy to inflate volumes, overstate coverage, or underreport failures. You don’t need bad intentions, just incentives, pressure, and a lack of scrutiny.
Eventually, someone opens the books and realizes the numbers were telling a much simpler story all along.
The Fundraising Fairy Tale Is Over
There was a time when logistics startups in Southeast Asia could pitch an “Uber for parcels” idea, toss around terms like “hyperlocal,” and walk out of a Series A meeting with a term sheet and a valuation that outpaced their parcel volumes. Capital was cheap. Risk was fashionable. The bar for due diligence sat somewhere between “do you have an app?” and “how soon can you expand to Vietnam?”
The strategy that emerged was straightforward: raise large, price aggressively, and conquer quickly. It rested on two very optimistic beliefs.
There would always be another round of funding.
Once enough scale was achieved, the messiness of losses would somehow resolve itself.
Today, both ideas have aged poorly.
Late-stage funding in Southeast Asia has slowed dramatically. Investors are no longer impressed by explosive growth if it’s paired with explosive burn. They are asking harder questions. Not about how fast you're growing, but whether you're growing in a way that survives without external cash every 12 months.
Even the larger players are no longer immune. Ninja Van is reportedly raising at half its previous valuation. PT. Global Jet Express (J&T Express), having burned over a billion dollars in 2023, managed to claw its way to profit through a disciplined focus on automation and cost efficiency. They didn’t grow out of their problems. They shrank them.
Most smaller players, however, lack the resources or infrastructure to follow that example. Their hope now is acquisition. But buyers are scarce, and the few that remain are choosy. The music hasn’t stopped just yet, but it’s getting quieter. And many logistics startups are starting to look around, wondering if there are enough chairs left when it finally does.
The Warning Signs Are Flashing
The signs are there for anyone willing to look beyond the PR spin. Indonesia’s logistics startup sector is showing visible cracks, and the signals are no longer subtle.
Multiple firms have conducted two or more rounds of layoffs within the same year, a move typically reserved for companies that are out of both options and optimism.
Riders and couriers are increasingly reporting delayed payments. These delays are often signs that cash is running thin and internal liabilities are stacking up.
Hub expansion plans have quietly been shelved or "rescheduled", even as parcel volumes rise. If you’re handling more orders but pausing infrastructure investments, it likely means the unit economics are under pressure, and management knows it.
There’s the growing over-dependence on dominant platforms like Tokopedia and TikTok Shop. Both are now charging logistics fees and reducing back-end incentives. What used to be hidden subsidy pipelines are drying up fast. Logistics startups that built their models on these discounts are finding themselves exposed.
The broader environment is getting tougher. Wages are rising, fuel remains unpredictable, and regulators are asking harder questions, especially after the recent eFishery scandal put startup governance in the spotlight.
The belief that sheer volume will offset inefficiency is no longer viable. Volume doesn’t cure a broken business model; it just scales the losses. Some operators will pivot. A few might stabilize through cost discipline and better routing density. But many others, especially those still pitching growth-at-all-costs, are likely already running out of time. The market is beginning to demand sustainability, not just speed.
Indonesia’s logistics startup sector needs a reality check. The market isn’t dead. But the myth that you can endlessly grow at a loss and patch the gaps with investor cash? That part is finished.
For too long, logistics was pitched like software. Founders talked about scale and “platform value” while ignoring the part where a courier still had to show up, on time, with the right package. But this isn’t a virtual business. It is deeply physical, capital-heavy, and unforgiving. The cost of failure is an undelivered parcel, an unpaid driver, a broken supply chain.
The winners in this new phase will be the most operationally grounded. The ones who monitor their unit economics, manage working capital, and build dense, efficient networks. They will survive because they run logistics companies, not VC-funded experiments.
As for the others, the reckoning will not be dramatic. It will be slow and procedural. A few missed payments. A round that never closes. A CEO who quietly moves on. And then nothing.
The signs were always there...
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