JAKARTA – Domestic logistic companies must begin to adopt digital-based technology in order to compete at higher levels.
Chairman of the Indonesian Logistics and Forwarders Association (ALFI) Yukki Nugrahawan Hanafi said that logistics and transportation companies will be more efficient and effective by using information technology.
One of the most common technologies is tracking and tracing. “Improving the time and schedule, with it will certainly affect the certainty of the delivery of goods,” he told Business on Tuesday (22/08/2017).
The need for information technology is based on the widespread use of smartphones in Indonesia. Yukki said the growth of smartphone users in Indonesia is the highest in Asean. “The increase to 37%.”
Of the 3,212 member companies of ALFI, Yukki said that quite a lot of people are adopting digital technology though not all of them.
Furthermore, he considered the opportunity of Indonesian logistics companies to compete in the regional market wide open. This is based on the largest share of logistics market in ASEAN is in Indonesia.
The results of ALFI’s research show that in the period of 2013-2017, the compound annual growth rate (CAGR) of the logistics contract sector stood at 11.7%, while for water & sea freight forwarding 11.8%. Among the Asean countries, Indonesia is the highest.
Coupled with the growth of middle class society in Indonesia (rising midle class). Although currently still in third place under Vietnam and the Philippines, but when viewed from the demographic bonuses owned by Indonesia, in the long run positively impact the growth of logistics.
The middle class is classified as an income society between Rp65 million to Rp455 million per year or around Rp5.4 million to Rp38 million per month.
The increase in the number of middle-class society will have an impact on the increase in people’s purchasing power. With the increase in purchasing power, the volume of logistics will grow.
One of the positively affected sectors is online trading or e-commerce. Yukki said the impact was most pronounced in big cities where the largest e-commerce penetration.
Regarding the regulation, he considers that the government is sufficiently supportive to create deregulation packages. The package will make domestic logistics companies confidently compete with foreign companies.
Translated by Aryaputra Pande
Originally posted on August 23, 2017 @ 9:19 am