RI still promising for air express firms

By Sylvia Gratia MN

JAKARTA (JP): The world's major air express companies still consider Indonesia a promising market for courier business despite the country's worst ever economic crisis.

Mike Fitzpatrick, senior technical advisor at DHL Worldwide Express' Indonesian affiliate PT Birotika Semesta/DHL, said the rupiah's collapse against the U.S. dollar -- the major cause of the economic turmoil -- had encouraged more exports from the country.

"The increase in exports means more business opportunities for air express companies," he said, adding that the cost-cutting measures adopted by Indonesian companies to enable them to cope with the crisis would make their operations more efficient.

As a result, he said, Indonesian goods would be even more competitive in years to come and exports would increase.

Based on such a business picture, the future of the air courier business in the country is unquestionably bright, he said.

Fitzpatrick said DHL's service in the delivery of Indonesian exports has increased by 40 percent since January.

Harsha E. Joesoef, president of Federal Express' (FedEx) Indonesian affiliate PT Repex Perdana International, sharing Fitzpatrick's view said that boosting exports was the only way to lift the country out of the economic crisis.

"Exporters are enjoying a windfall because of the depreciation of the rupiah. All companies are competing to export their products now," Harsha told The Jakarta Post.

Fitzpatrick admitted the company also recorded a decline of 15 percent in the volume of document delivery and attributed this to the fact that many companies in Indonesia had closed down.

"But we are an international company. And as most of our revenue in Indonesia came from exports, the crisis has only had a minimal impact on us," he said.

Competition

Harsha said that air express companies have to offer special packages to enable them to compete in the country's tight market.

"Exporters are seeking the fastest and most reliable air express service. We, Federal Express are ready to provide them with such a service," he said, adding that FedEx currently handles approximately 20 tons of freight every day.

DHL's Indonesian Manager, Soraya Rudianti said that to grow and profit from the worldwide economy, business needed express distribution.

"Today most wise business owners are using express distribution not only for emergency shipments, but as part of their daily delivery activities," she told the Post.

"We want to keep our image as the first in the business. The first to pick up, to process and to deliver. For us, every second counts."

In June DHL introduced the "USA First" service for Indonesian exporters to deliver goods to the United States fast and cost effectively. The service includes express pick-up, streamlined customs clearance and secure delivery.

Earlier this month, the company launched a new service aimed at facilitating growing business ties between Jakarta and the Malaysian capital.

Under its Same Day Service, documents collected in the Indonesian capital will receive same-day service to Kuala Lumpur. Documents sent by DHL at 11:30 a.m will arrive in Kuala Lumpur before 9:30 p.m the same day.

Fitzpatrick said that DHL would continue to improve its service, to maintain its position as the market leader in Indonesia and other Asian countries.

"We have a strong position in Indonesia. Our market share in the country is currently 66 percent and over 50 percent in other Asian countries," he said.

"We are continually improving our services and always looking for new innovations. We are the first air express company to offer same day service."

Birotika Semesta/DHL, which started operating in Indonesia in 1979, currently leads the domestic courier industry with a network of 65 branch offices. It employs more than 800 people and has 250 vehicles at its disposal.

FedEx, however, is very proud because it is the only air express company which operates its own fleets while other air express companies still rely on commercial airlines.

FedEx has operated direct flights to Jakarta five times a week using Airbus A310 aircraft since April.

"The service will help our consumers conduct their businesses faster and more efficiently. We are moving closer to fulfilling our vision of developing an integrated distribution network, that will allow customers to transport goods to virtually any destination in the world within 24 to 48 hours," Joesoef said.

He said that using its own fleets has benefited FedEx in the current economic crisis, because the company can take over the cargo market left vacant by other airlines, many of whom have reduced their flights.

"By using our own aircraft we can add cargo spaces for Indonesian companies, provide jobs and value adding for local freight forwarders and airlines," he said.

"Depending on commercial airlines is full of risk, especially with delays."

He said FedEx fleets, like other foreign cargo companies are only allowed to land in Jakarta's Soekarno-Hatta airport. The shipments to other cities in Indonesia are made by local airlines.

He added that using its own fleets has allowed the company to take full control and full responsibility for its consumers' goods.

DHL, however, still prefers to cooperate with commercial airlines because the company has many more time choices for shipments.

"Using commercial airlines allow us to be more flexible in delivery as we have many more delivery choices for consumers'. It is also more economical than using our own fleets," Soraya said.

Fitzpatrick said that DHL is considering further expansion of the service to other Asian countries.

He said Bangkok would be next on the agenda because Thailand is one of Indonesia's major partners.

"We are also looking to further extend the service to other Asian countries. We have already provided overnight service to Hong Kong, Tokyo and Osaka, and maybe in the future we can provide same day service to these destinations."

Fitzpatrick said the company would invest about US$3 million in the next two years to upgrade its existing facilities.

"We will improve our supporting facilities at Soekarno-Hatta International Airport and open up new offices and improve our technology."

"We make an effort to remain committed to our role as a trade facilitator in good and bad times," Fitzpatrick said.

"Therefore, we are initially targeting market growth of 20 percent next year. We are also trying to increase our market share to 70 percent," Soraya added.

Meanwhile, Harsha said that FedEx would launch a new service next month which would allow its consumers to make transactions via the Internet.

"The new service, called electronic commerce, will facilitate Indonesian exporters, including operators in other cities in Java and other parts of Indonesia, to promote their products to international consumers, and allow buyers to purchase the goods via the Internet," Harsha said.

PT Repex Perdana/FedEx, which started operating in Indonesia in 1985, currently services over 40 destinations in Indonesia. It employs more than 400 people and has at least 82 vehicles at its disposal.