Information Technology, the backbone of express delivery

Information Technology, the backbone of express delivery

By Zatni Arbi

JAKARTA (JP): Last week, my wife needed to send a parcel to
her folks back home in Surakarta. She got an empty Super Mie box
at a Hero supermarket, put her stuff in it, and sealed it with
adhesive tape. With a white board marker, she wrote the address
on a piece of paper and pasted it on top of the box. Then, we
went to a small parcel-delivery company off Jl. Gajah Mada. The
parcel was weighed, the clerk wrote down the names and the
addresses on a receipt and handed a copy to us. We paid and left,
and that was it.

For domestic shipment of certain dry goods and medicines of
limited values, this service may be adequate. No computer
equipment is used. No printout. No bar code. No scanner. There
was no security checking, either, so anyone could put anything
into a box.

But, as globalization is becoming our reality, we expect more
from our freight delivery companies. We want to be sure that our
parcels do not get lost along the way. We want to be sure that
they will arrive on time at the doorstep of their intended
recipients. And, a growing number of us even demand the ability
to find out where our parcel is at any point in time during the
transport. Certainly the level of service offered by this small
company would not stand up to anything when compared to the
services offered by global players such as DHL, Federal Express,
TNT and UPS.

I have been fascinated with the efficiency of overnight or
express delivery services ever since I bought my first NEC
Pinwriter printer in 1987. That printer was the first item I
ordered from the mainland U.S. while still living in Honolulu as
a student. Subsequently I bought quite a few computer products --
even a complete 386 system -- through mail-order companies. The
products always came via Federal Express or UPS and they always
came in good shape. I still recall one UPS courier who got to
know me so well after several deliveries that he would stop me on
the street to tell me that he had something for me and I would
have to rush back to my apartment before he arrived there.

Indeed, express services are not new. DHL, for example, was
started in 1969. Federal Express began operations in 1973, and
UPS started even much earlier, in Seattle, in 1907. Today, they
can only compete with prices and their use of information
technology to provide the best services to their customers.

Last week, a group of IT journalists and myself were invited
to DHL to see how information technology is being used to support
its services. This company, which is represented here by PT
Birotika Semesta, reportedly spent between US$1 million and $1.5
million on building its information technology infrastructure in
Indonesia alone. DHL's worldwide IT investment is $ 500 million.

Address labels are the essential part of any delivery
services. DHL's regular accounts can obtain a software package
called Easyship and a special label printer. Using the software,
the customer can fill in the names of the addresses either
manually or using an existing database to minimize the
possibility of typos. The thermal printer will print labels with
distinct bar codes that should be pasted to the envelopes or
boxes to be shipped.

Paging system

When a customer calls DHL to let it know that he has something
to be picked up, a DHL dispatcher will use a paging system to
inform one of the couriers in the field that he has to collect an
outbound parcel. When it is collected, a wand scanner is used to
scan the bar codes on the labels. In his pickup truck, each
courier has a radio-based mobile data system that will enable him
to zap the data scanned from the label to the central data
system. The pickup date and time of the parcel is now recorded
and its journey starts.

From the customer, all the documents and parcels are brought
to service centers and then to the export gateways -- which are
located at the airport. Here, the shipment should naturally clear
customs before it is loaded on to the airplane. Some of the
parcels will be flown directly to the countries of destination,
others will have to go to one of the company's hubs. The most
important point is that at every step of the way the labels are
scanned to record their whereabouts.

All the big players in express delivery services -- DHL,
Fedex, UPS and TNT -- have a Web-based facility that enables
their customers to track the movement of their documents and
parcels. All they have to do is go to the respective homepage of
these air express services companies and go to their tracking
system, enter the number found on the airway bill and click.

At the DHL service center that we visited, however, some of
the sorting process is still done manually but I could see that
the workers were very efficient. It reminded me of my visit to
Australia in 1996, during which I had the chance to see a highly
automated sorting system being used at the main post office of
Melbourne. Australia Post has been the proponent of the use of
advanced bar codes and efficient addressing systems. In fact, it
is now working on its FuturePOST initiative to help it automate
the sorting stage further to reduce costs.

As our world becomes a borderless world, international air
express and mail delivery services become huge industries. DHL
uses more than 217 aircraft -- small and large -- to carry its
cargo. Federal Express has an aircraft fleet of 619, and UPS has
222 plus 302 chartered aircraft.

Now, what is the impact of electronic communications on the
overnight delivery companies? Certainly some of these big players
are expanding their services by taking advantage of technology
instead of competing with it. UPS, for example, offers special
Internet-based services called Online Dossier and Online Courier
to cater for the need of customers who need their documents
delivered in 10 minutes instead of 24 hours. Unlike regular e-
mail, an electronic document transmitted through the Internet
using either of these services will be guaranteed for security
and only the intended recipient can open the encrypted file.
Unlike e-mail, too, the sender of the document will be able to
verify that the file has been received by the intended recipient
and opened by him and not anyone else.

What about customers who want to have their export commodities
such as textile and furniture halfway across the globe in 10
minutes? That, unfortunately, still awaits Star Trek-like
teleportation technology to advance beyond theories.