Indonesia’s freight forwarding industry is pressing the government to reconsider parts of a new business classification system, warning that changes could narrow the scope of services companies have long provided.
The concern was raised at a seminar hosted by the Jakarta chapter of the Indonesian Logistics and Forwarders’ Association (ALFI), which brought together freight forwarders, logistics companies and government officials to discuss the impact of the 2025 Indonesian Standard Industrial Classification, known as KBLI 2025.
The gathering highlighted a tension between an industry seeking regulatory flexibility for increasingly integrated logistics services and the government’s effort to update Indonesia’s economic classifications in line with international standards.
About 600 freight forwarding and logistics companies attended the seminar, which was opened by ALFI’s national chairman, Akbar Djohan.
ALFI Jakarta Chairman Adil Karim said freight forwarders in Indonesia faced a heavier regulatory burden than counterparts in some neighboring countries, where licensing processes were simpler.
“Freight forwarders in other countries no longer have to worry about licensing issues; they simply focus on doing business. This stands in stark contrast to the situation in our country, where we are constantly preoccupied with licensing matters,” Adil said.
He said freight forwarding businesses had evolved beyond traditional intermediary functions and increasingly offered comprehensive, end-to-end logistics services, including activities performed as principals or shippers.
“Therefore, regulations need to take into account the business practices that have evolved within the logistics industry,” Adil said.
The debate centers partly on the division of activities under KBLI 2025, including the classification of Multimodal Transport under code 52291 and Freight Forwarding Services under code 52311.
Akbar called for a comprehensive review and harmonization of regulations governing the two categories, arguing that the issue went beyond a change in classification codes.
He said policymakers needed to consider how the classification system interacts with the definition of multimodal transport, the regulatory position of Multimodal Transport Operators, corporate contractual responsibilities, Indonesia’s online licensing system and the tax treatment of freight forwarding transactions.
At the heart of the dispute, he said, was the definition of multimodal transport.
“Multimodal transport is not simply a matter of a company owning or operating multiple modes of transport. The essence is the transport of goods using more than one mode under a single contract and a single contractual responsibility. One contract, multiple modes, one contractual responsibility,” Akbar said.
For freight forwarders, the classification has implications beyond how their businesses are recorded in government statistics. The industry is concerned that differences between business activities and their assigned classifications could create uncertainty over licensing and the services companies are permitted to provide.
ALFI Jakarta has therefore called for recommendations from the seminar to be considered by the government as it reviews the implementation of KBLI 2025.
Participants also raised the possibility of legal action if no resolution could be reached. A judicial review before Indonesia’s Constitutional Court was mentioned as one possible avenue, with industry representatives arguing that aspects of the classification system were inconsistent with World Trade Organization conventions.
To Comply with International Standard
The government, however, says the classification update is not intended to restrict business activity.
Amalia Adininggar, head of Statistics Indonesia, or BPS, said logistics and warehousing services make an important contribution to the national economy. She said the revisions were part of a regular process to update the country’s classification of economic activities.
KBLI is updated every five years and is based on international classification standards developed by the United Nations Statistics Division. The 2025 revision is aligned with the fifth revision of the International Standard Industrial Classification of All Economic Activities, or ISIC.
“The essence is that we are organizing the KBLI codes so that the Government and BPS can better calculate economic potential. There is absolutely no intention on the part of the Government to burden the business sector. We genuinely want to bring order to the system,” Amalia said.
She said changes in the economy, including the growth of digital technology, new business models and increasing attention to environmental and climate issues, required periodic adjustments to the classification framework.
“The essence is to streamline the classification system so that it is organized and compliant with international standards,” she said.
The transportation and warehousing sector illustrates the challenge facing policymakers. The industry has expanded alongside international trade and increasingly complex supply chains, with companies combining transportation, warehousing, documentation and other services for customers.
Amalia sought to reassure businesses that the introduction of KBLI 2025 would not automatically require changes to corporate deeds.
A joint circular issued by the Ministry of Law and Human Rights, the Ministry of Investment and Downstreaming, and BPS establishes a transition mechanism, she said. Existing licenses issued, verified or approved before the implementation of KBLI 2025 remain valid.
Companies must update their classification through the Online Single Submission, or OSS, system or the Administration of Legal Entities, or AHU, system when there are substantive changes to their activities.
Where an adjustment involves only a numerical code, the change can be processed automatically without requiring an amendment to the company’s articles of association, according to Amalia.
The transition will also operate in parallel. KBLI 2020 remains in use while businesses complete the required updates, with an official conversion table providing the basis for moving activities to the 2025 classification.
The reassurances are intended to reduce uncertainty among businesses as the new system takes effect. But for freight forwarders, the central question remains whether the classification framework adequately reflects how the industry operates today.
The Jakarta seminar ended with an interactive discussion involving government officials, logistics specialists and taxation experts. The exchanges underscored the broader challenge facing Indonesia as it attempts to modernize its regulatory systems while keeping pace with businesses whose operations increasingly cross traditional industry boundaries.
For the freight forwarding sector, the outcome of that debate could determine whether KBLI 2025 becomes primarily a statistical and administrative update, or a regulatory change with wider consequences for how logistics companies conduct business.
