Express service firms sees 30% growth in domestic delivery

Zakki P. Hakim, The Jakarta Post, Jakarta

Express services firms have expect more healthy growth in the delivery industry this year if government authorities support a recent policy by the Ministry of Transportation in easing the maximum weight limit of packages that can be handled by a firm.

Indonesian Express Delivery Companies' Association (Asperindo) chairman Johari Zein said domestic delivery growth may double to 30 percent this year, if the new policy were implemented properly by bureaucrats on the ground.

"Last year, the domestic deliveries expanded by 15 percent to reach a value of Rp 2 trillion (US$210.52 million) in 2004. The policy is expected to make the industry grow another 30 percent this year," he told The Jakarta Post on Wednesday.

However, he could not predict the growth for international delivery, as last year -- due to political turbulence and lack of investment -- express services to international destinations was relatively stagnant.

"We hope that with the improving economic stability in the country, express services to international destinations would grow significantly this year," he said.

In late January, the transportation ministry issued a Ministerial Decree No.5/2005 on express delivery services ruling that firms may handle packages of up to 30,000 kilograms for a single delivery.

According to Johari, the main factors that may hamper the optimum implementation of the decree was that institutions like customs and the directorate general for post and telecommunications were under different ministries.

The customs office is under the Ministry of Finance, while the directorate general is under the Ministry of Communications and Information, thus the Ministry of Transportation needs to educate the bureaucrats and ensure inter-ministerial coordination, Johari urged.

"We simply hope that other government institutions can fully support the Ministry of Transportation policy," he said.

Data from Asperindo shows that in practice, express services firms could only handle packages of a maximum of 100 kilograms or worth $5,000 per one international delivery.

The limitation varied in domestic delivery regulations but mostly were even lower compared to the requirements for international delivery, the association said.

"Easing the limitation would eventually accelerate the production process and boost competitiveness, which the country needed to pursue higher economic growth," Johari said.