FOR MARKETING PERSPECTIVE -- May 11 (Tuesday)

RI remains important makert for major courier companies

Rudijanto Contributor Jakarta

While the country struggles to boost its exports, and prepares for its first-ever direct presidential election, the local market remains promising for international and domestic courier and express-delivery companies.

Despite the predicted slight growth of the country's economy to 4.5 percent this year from 4.1 percent last year by the Asian Development Bank (ADB), courier and express-delivery companies have every reason to remain upbeat.

Chairman of the Association of Indonesian Express-Delivery Companies (Asperindo) Johari Zein was quoted by Bisnis Indonesia as predicting that the domestic express-delivery business would boom this year, due to strong demand from political parties and the General Elections Committee (KPU).

Founded in 1986, Asperindo has over 500 private companies with 2000 branches across the nation. The association's members comprise three categories in line with their scope of operation, namely international-oriented, domestic-oriented and inter-city oriented companies.

The general election is considered one of the biggest logistical operations in the nation's history. Johari earlier expected the election to increase the volume of services by express-delivery companies by 20 percent.

KPU appointed four major courier companies, namely state-owned PT Pos Indonesia, PT Sentra, PT Pandu Siwi Sentosa and PT Aneka Jasa Putra Tama. While small players that provide inter-city services also enjoyed the high demand.

"Next to the Idul Fitri, Christmas and New Year holidays, the general election also provided a big opportunity for our business due to increasing demands for the faster delivery of documents and goods," said M. Lestari, a branch manager of local inter-city courier company Jalur Nugraha Express as quoted by the Suara Merdeka daily.

Not only domestic players feel upbeat about business prospects this year, international giants, such as FedEx, consider Indonesia part of the fast-moving Asia-Pacific region, and a very promising market.

"FedEx views the Indonesian market as an excellent place to do business. The nation forms an integral part of our business in Asia, and we believe that the Asia-Pacific region continues to be a magnet for export activities," said Ramesh Kumar Singham, managing director of FedEx Express for Indonesia and Singapore.

Like other major courier companies, the United Parcel Service (UPS) is also upbeat about the prospects of the courier market in Indonesia, one of the largest economies in the Asia Pacific.

The United States-based UPS, which is one of the world's major courier companies and a global leader in supply chain solutions, has spent a lot of money both in technology and in opening new branches to take advantage of the growing courier market in the country.

Even though UPS's focus is on the international market, building branch offices in Indonesia's major cities is seen as an important strategy to provide local businesspeople easy access to its services.

With new technology and a fleet expansion, UPS customers are guaranteed that their packages will arrive on time. The company's latest technology also enables customers to track their packages through UPS's website within a matter of seconds.

Chairman of the National Economic Recovery Committee -- who is also the chairman of the Indonesian Employers Association (Apindo) -- Sofjan Wanandi, expects exports will remain stagnant this year due to a lack of policy that supports a significant increase. Although, he believes the value of the country's exports is still huge for courier and logistics companies.

The country's central bank, Bank Indonesia (BI), estimates export figures in the first quarter this year to drop, due to mainly a decline in oil and gas exports. However, BI expects non- oil and gas exports will still grow by 0.2 percent to US$12.02 billion as compared to the same period of last year.

Indonesian exports reached US$61.023 billion last year. This export figure shows a slight increase compared to 2001 and 2002, when exports did not exceed US$60 billion. Last year's export figure was close to the country's export figure in 2000, which was US$62.124 billion.

With the recent relatively smooth election for legislative members, courier and logistics companies expect the presidential election will bring stability to the country, and thereby provide a good climate for the economy in general, including for exports.

As part of the fast-growing Asia-Pacific region, Indonesia has a lot to offer. That is why FedEx firmly believes the country will play a significant role, especially given the role of exports in the Indonesian economy.

"FedEx's business in Asia-Pacific for the third quarter of the 2003-2004 financial year recorded a 22 percent year-over-year growth in daily package volume. This is a fantastic result that highlights not just the strength, but also the importance of this region for our international business," said Ramesh.

As an international giant in the express-delivery and logistics service, FedEx is strengthening its position in Indonesia. FedEx flies its own fleet of 643 aircraft and connects Indonesia to the world through its daily flights.

The company provides custodial control from pick up to delivery. This service is aimed at manufacturers with high value and time sensitive products, who require a fast and reliable service to deliver their goods to the market.

Other services include a time-definite, premium airfreight service for international shipments; the delivery of bulk shipments from one point to multiple addresses in one country; and the delivery of smaller packages, such as documents, for items requiring next-day delivery to 215 countries worldwide.

Another international heavyweight player in express delivery and logistics service -- DHL -- even considers Indonesia a vital component of the company's regional growth strategy. The company sees the country's wealth of natural resources, huge population and large business base as key factors that make Indonesia one of the biggest economies in the region.

"Having been in this country for more than 30 years now, we know that Indonesia will continue to remain a major economy in the region and that long-term growth prospects are excellent. A number of sectors, such as manufacturing and export, are registering strong growth, and this presents us with very good opportunities to further develop our business," said Edi Prayitno, DHL's business development manager.

Like FedEx, DHL also operates its own dedicated flight to and from Singapore using a Boeing 727 freighter that has a capacity of 23 tons. The aircraft flies four times a week in order to provide services for Indonesian businesses.

With this great confidence in the Indonesian market, DHL has launched a new service -- Express Pallet -- that offers a new fixed-price packaging and transport solution designed to match real-time distribution systems, as well as specific packaging configurations from 50 kilograms up to 100 kilograms.

This new door-to-door service, which is available from Indonesia to 220 destinations worldwide, is especially aimed at industries, such as automotive, clothing and textile, leather, electronics, as well as oil and gas. Initially, DHL Express Pallet is available outbound from Jakarta, Batam, Surabaya and Bali.

The heart of DHL's Express Pallet is a strong, yet highly versatile pallet box with a base measuring 790 mm by 790 mm. This box can be configured to accommodate shipments from 470 mm up to 810 mm in height. In its largest configuration (790 mm x 790 mm x 810mm) the DHL Express Pallet has a load capacity of 100 kilograms.

Aware of the potential of the overseas delivery service, local company PT Citra Van Titipan Kilat Indonesia (TIKI) has also expanded their international network. Last February, the company signed a strategic partnership agreement with Malaysia-based Nationwide Express Courier Services Berhad. Like Nationwide Express, TIKI is also strengthening its international express services. TIKI will continue to set up a number of indirect alliances with selected express companies to serve their valuable existing and potential customers, as well as direct alliances globally.

In spite of ADB's forecast of minute economic growth for this year and flat growth in 2005, local, as well as international express-delivery and logistics companies, continue to deepen their roots here. Being one of the biggest countries in the Asia-Pacific region, the Indonesian market is simply hard to ignore; particularly in the long run.