Local forwarders want new government regulation

Sari P. Setiogi, The Jakarta Post, Jakarta

Indonesian forwarding companies are urging the government to issue a new regulation aimed at improving forwarding services in the country.

"A new regulation is badly needed as some local forwarding companies are unreliable and do not meet international standards," Indonesian Forwarders Association (INFA) chairman Chris Kanter told the media on Wednesday.

The association submitted a draft regulation late last year to the State Secretariat but received no response, he said.

"Competition in the business is getting tight, particularly with the operation of international companies. With poor services, it will be hard for local companies to compete against them," he explained.

Chris said that a decline in business for domestic freight forwarders was already evident this early in the year, compared to business in past years. He did not mention by how much business had decreased.

"The prevailing regulation on the business is only a ministerial decree, which is very loose in regard to both local and international companies," he said.

He explained that the ease with which a freight forwarding company could be established had more bad consequences than good.

"Many local companies do not try to obtain a forwarder's certificate from INFA or the International Federation of Freight Forwarders Association (FIATA), which would guarantee that they meet business qualifications," Chris said.

With the absence of such certification, many local forwarding companies are unaware of the basic regulations and ethics on the industry. In turn, the companies are prone to make mistakes that affect customers and causes them to lose faith in the local industry.

"That has a bad impact on the industry.

"In the meantime, foreign companies enter the Indonesian market very easily. We need more reliable local players in the business, otherwise customers will favor international forwarding companies more than domestic ones," he said.

Chris said that faith that freight would be delivered safely and on time was the most important consideration for customers. "Pricing is the second consideration. Customers are willing to pay more as long as they feel secure that their freight will be delivered safely and on time."

According to INFA secretary-general Nararya S. Soeprapto, the association has about 2,600 members, of which about 20 are foreign joint ventures.