Domestic courier industry needs fair regulation

Debbie A. Lubis, Contributor, The Jakarta Post

The local courier industry has enjoyed rapid growth over the past several years thanks to a significant growth in economic activities in the country's provinces outside Java.

The association of the Indonesian delivery companies (Asperindo), however, said that the lack of a sound regulations could hamper the local courier companies' future growth.

According to the association, Law No. 6/1984 which regulates courier service providers' activities in the country was no longer appropriate in the globalized business world.

"We certainly need a more modern, visionary regulations so that we will have a level playing field in conducting our business," the association's chairman, Johari Zain, said.

Under the law, which gives state-owned postal company PT Pos Indonesia a monopoly in postal services, any type of documents are considered letters, and thus a the sole domain of the government post office.

With the vague definition of a letter, courier companies are only allowed to handle the delivery of non-document packages. It means that shipping any type of document is a violation of the law.

"Any type of document is considered a letter under these laws. As PT Pos still has a total monopoly on all letters, document delivery is still considered illegal," he said.

The association, which groups 800 courier companies across the country, has for several years fought for the revision of the law since its establishment in 1986.

A number of approaches and lobbying activities made by the company to amend the law, either through the government or the House of Representatives (DPR).

The House, on its own initiative, proposed a new draft to revise the law last year after the first draft proposed by the government could not be passed.

Although, at first the association only, fights for the recognition of documents, now it also demands the removal of the state-enforced postal service monopoly.

The courier business is considered one of the business sectors with the greatest potential for growth in the country, despite the business restrictions. A rapid growth in economic activities in provinces outside Java as the result of the regional autonomy has become one of the driving forces in this new growth.

"This is a lucrative business. Many local courier companies have enjoyed the fruits of the regional economy system," he said, adding that most of most Indonesian courier companies, which mainly handled small parcels in early 1980s have now diversified their parcel delivery into a wide range of express delivery services to outer provinces.

Many of the major local players such as Caraka PT Pandu Siwi Sentosa and PT Tiki Jalur Nugraha Ekakurir (JNE) have also provided international delivery services in cooperation with their foreign partners.

They have also used the latest information technology and computerization systems to enable online checking by putting necessary information on their website.

Established in 1990, JNE now serves deliveries for sensitive goods to the final destination, ranging from standard overnight courier services to a special hand-carried service.

With an extensive global network of strategic partners abroad, JNE also provides international air and sea cargo service, express customs clearance service, airport escort and greeting services.

With 40 branches, and more then 100 delivery depots all over Indonesia, JNE provides logistics management, warehousing and delivery for time-sensitive goods. The company also assists customers in the packing of all goods from offices, factories, galleries or the home, then ships them to a new location and unpacks.

"JNE's domestic courier service has enjoyed a steady growth of 20 percent, slightly above the average growth in the industry.

To be a market leader, we should be able to surpass others' growth," Johari, who is also the Executive Director of JNE, said.

Johari believes that globalization will not hurt local players because foreign courier companies are generally not interested in providing domestic courier services.

"We must be smart in identifying which market we want to compete in. Foreign courier companies already have good networking and established brand recognition, but they are not interested in domestic courier services due to the unfavorable regulations," he explained.