Rapid delivery no longer enough for courier services

I. Christianto Contributor Jakarta

Growing competition among courier service providers has prompted business players to provide additional services for customers. Fast delivery on its own no longer impresses users.

Courier service providers have realized that "express" is not the only term sought by customers, but also logistics, transportation, customs brokerage and inventory management.

With the increase in Internet usage, few sectors still require the human and physical touch. However, it will likely remain impossible to send a parcel containing chocolate to the front door of a customer's house by Internet. Therefore, courier service providers are still needed.

The players in this sector are, consequently, trying to carve a niche in the highly profitable courier sector. But they have to offer something more rather than just express or speed.

They have spent millions of dollars investing in information and electronics technology, upgrading its hardware and software to become multi-service transportation carriers in handling customers' goods and dealing with logistics.

A courier service refers to the delivery of time-sensitive cargo. To improve their service, carriers try to arrange and combine various means of transportation via air, land and ocean. In addition, many players also serve warehouse and logistics maintenance for customers.

For example, two leading players, TNT World Express and PT Repex Perdana International the licensee of FedEx Corp., claim to be not only courier companies but also total solution providers.

Safitri D. Wiranegara of TNT said the growth of the courier service sector in Indonesia will increase this year after signs of recovery in recent years.

"The growth rate is estimated to reach between 3 percent and 6 percent. The key factor, which will influence the growth rate, is the value of the service. Customers don't just need a courier service,".

She said her company now offered a whole range of services to customers for total solutions. "We are actually now the second player in Indonesia for the express business and the leading player for logistics. We must synergize the businesses into one strategy, like we combine our service and facilities for the customer, so they will realize we are a total solution provider company in Indonesia."

She admitted their line of business faced a lot of competition.

"We are fully confident of our capabilities. We are the only company that has a combined service between express and logistics. There are many new players coming and they claim to be total solution carriers, in fact they just offer traditional courier services."

She said TNT's services, which included combined express and logistic capabilities, as well as in-house custom clearance, were set at very competitive and simple rates based on tailor-made services.

Indonesia's courier services remains prospective because economic recovery is predicted. There is a rising demand for more rapid, reliable transportation and distribution of goods.

Repex Perdana International, which is part of PT Repex Wahana (RPX), also tries to offer combined services to become a total solution carrier. PRX holds a number of subsidiaries, which makes it a one-stop logistic service provider.

The company's president, Harsha E. Joesoef, said that his company provides not only courier service and delivery, but also customs brokerage and inventory management to simplify the logistical requirements of its customers.

He said RPX is the only company that runs several subsidiaries dealing with warehouse, freight forwarding and moving by sea, air forwarding, domestic express, airlines and international freight, offering one-stop logistic services.

At RPX, there is the FedEx cargo airlines linking Jakarta and Singapore five times weekly and Republic Airlines, the first cargo airlines in Indonesia, he said adding the company also collaborated with Sumitomo Transportation, Tokyo Air Cargo, Tokyu World Transport Service and Hashin AirFreight.

"Let our customers judge us. Each player has its own competitive strengths and weaknesses. Customers will usually consider carriers' networks, speed and ability to come up with logistical solutions."

Amid the growing competition, DHL Worldwide Express, one of the major players in the country's courier service, has recently launched its "China First" Program.

Through its "China First" Program, DHL aims to facilitate export-import activities of local businessmen to and from China, said DHL Senior Technical Adviser Alan Cassels.

Besides launching the special service to China, DHL has also opened an office in Makassar, which not only serves documents, packages and cargo movement in South Sulawesi but also other parts of eastern Indonesia such as Palu, Kendari, Sengkeng, Soroako, Maluku and Papua.

"Eastern Indonesia has the potential to become one of the country's key areas, with tremendous resources and new opportunities for exports and imports," he said.

There are some 2,000 courier providers across Indonesia. Less than half this figure are members of the Association of Indonesian Courier Companies (Asperindo). Data from the association shows some 20 percent of its members are large carriers, while the remaining are smaller-scale carriers.

There are three basic categories of service; intercity, domestic and international. Most of the big players concentrate on international services, while the smaller ones on intercity and domestic services.

Classic challenges remain in store for local players. These include the effects of low capital returns, competition from international carriers and the long-waited amendment of the postal regulation.

Asperindo has, for a long time, urged the government to revoke PT Pos Indonesia's (Posindo) monopoly rights and give greater freedom to private courier companies. However, after two years, the postal regulation bill is still bogged down in details such as the disputed definition of "document", which revolves around whether the maximum weight of a document should be 500 grams.

The dispute may go on for a while and the business will also continue, but some realize they must survive despite the ongoing dispute. Some local players have now allied with leading carriers, which are mostly international companies that share expertise in local and overseas networks. Through such collaboration, the domestic companies will hopefully improve themselves and turn into total solution providers with high quality customer services.