'Consumers need something more'

'Consumers need something more'

I. Christianto, Contributor, Jakarta

Growing competition among courier service providers has
prompted business players to provide additional services for
customers. Fast delivery on its own no longer impresses users.

Courier service providers have realized that "express" is not
the only term sought by customers, but also logistics,
transportation, customs brokerage and inventory management.

With the increase in Internet usage, few sectors still require
the human and physical touch. However, it will likely remain
impossible to send a parcel containing chocolate to the front
door of a customer's house by Internet. Therefore, courier
service providers are still needed.

The players in this sector are, consequently, trying to carve
a niche in the highly profitable courier sector. But they have to
offer something more rather than just express or speed.

They have spent millions of dollars investing in information
and electronics technology, upgrading its hardware and software
to become multi-service transportation carriers in handling
customers' goods and dealing with logistics.

A courier service refers to the delivery of time-sensitive
cargo. To improve their service, carriers try to arrange and
combine various means of transportation via air, land and ocean.
In addition, many players also serve warehouse and logistics
maintenance for customers.

For example, two leading players, TNT World Express and PT
Repex Perdana International the licensee of FedEx Corp., claim to
be not only courier companies but also total solution providers.

Safitri D. Wiranegara of TNT said the growth of the courier
service sector in Indonesia will increase this year after signs
of recovery in recent years.

"The growth rate is estimated to reach between 3 percent and 6
percent. The key factor, which will influence the growth rate, is
the value of the service. Customers don't just need a courier
service,".

She said her company now offered a whole range of services to
customers for total solutions. "We are actually now the second
player in Indonesia for the express business and the leading
player for logistics. We must synergize the businesses into one
strategy, like we combine our service and facilities for the
customer, so they will realize we are a total solution provider
company in Indonesia."

She admitted their line of business faced a lot of
competition.

"We are fully confident of our capabilities. We are the only
company that has a combined service between express and
logistics. There are many new players coming and they claim to be
total solution carriers, in fact they just offer traditional
courier services."

She said TNT's services, which included combined express and
logistic capabilities, as well as in-house custom clearance, were
set at very competitive and simple rates based on tailor-made
services.

Indonesia's courier services remains prospective because
economic recovery is predicted. There is a rising demand for more
rapid, reliable transportation and distribution of goods.

Repex Perdana International, which is part of PT Repex Wahana
(RPX), also tries to offer combined services to become a total
solution carrier. PRX holds a number of subsidiaries, which makes
it a one-stop logistic service provider.

The company's president, Harsha E. Joesoef, said that his
company provides not only courier service and delivery, but also
customs brokerage and inventory management to simplify the
logistical requirements of its customers.

He said RPX is the only company that runs several subsidiaries
dealing with warehouse, freight forwarding and moving by sea, air
forwarding, domestic express, airlines and international freight,
offering one-stop logistic services.

At RPX, there is the FedEx cargo airlines linking Jakarta and
Singapore five times weekly and Republic Airlines, the first
cargo airlines in Indonesia, he said adding the company also
collaborated with Sumitomo Transportation, Tokyo Air Cargo, Tokyu
World Transport Service and Hashin AirFreight.

"Let our customers judge us. Each player has its own
competitive strengths and weaknesses. Customers will usually
consider carriers' networks, speed and ability to come up with
logistical solutions."

Amid the growing competition, DHL Worldwide Express, one of
the major players in the country's courier service, has recently
launched its "China First" Program.

Through its "China First" Program, DHL aims to facilitate
export-import activities of local businessmen to and from China,
said DHL Senior Technical Adviser Alan Cassels.

Besides launching the special service to China, DHL has also
opened an office in Makassar, which not only serves documents,
packages and cargo movement in South Sulawesi but also other
parts of eastern Indonesia such as Palu, Kendari, Sengkeng,
Soroako, Maluku and Papua.

"Eastern Indonesia has the potential to become one of the
country's key areas, with tremendous resources and new
opportunities for exports and imports," he said.

There are some 2,000 courier providers across Indonesia. Less
than half this figure are members of the Association of
Indonesian Courier Companies (Asperindo). Data from the
association shows some 20 percent of its members are large
carriers, while the remaining are smaller-scale carriers.

There are three basic categories of service; intercity,
domestic and international. Most of the big players concentrate
on international services, while the smaller ones on intercity
and domestic services.

Classic challenges remain in store for local players. These
include the effects of low capital returns, competition from
international carriers and the long-waited amendment of the
postal regulation.

Asperindo has, for a long time, urged the government to revoke
PT Pos Indonesia's (Posindo) monopoly rights and give greater
freedom to private courier companies. However, after two years,
the postal regulation bill is still bogged down in details such
as the disputed definition of "document", which revolves around
whether the maximum weight of a document should be 500 grams.

The dispute may go on for a while and the business will also
continue, but some realize they must survive despite the ongoing
dispute. Some local players have now allied with leading
carriers, which are mostly international companies that share
expertise in local and overseas networks. Through such
collaboration, the domestic companies will hopefully improve
themselves and turn into total solution providers with high
quality customer services.