Connect with us

Business

Indonesia’s logistic industries have started digitalizing after pandemic pressure.

Adam Layaan Kurik Riza

Published

3 years ago

on

Going into a second year of mobility restrictions, whether government-mandated or self-imposed, Indonesians have come to rely more on online shopping.

Enhanced by e-commerce, logistics has become crucial blood vessels across this archipelago to keep it functioning under the new normal. After suffering from low efficiency for a long time, Indonesia’s logistics industry is in urgent need of transformation.

Ignatia Heidi, a 28-year-old marketer at a private bank in Jakarta, recently acquired nearly all her daily necessities online, especially after the implementation of restrictions on public activities since July 3, locally known as the PPKM.

Required to work from home for most of the week, Heidi has also reduced outdoor activities to minimize the risk of contracting the disease. “I won’t be able to maintain my life at home without ordering online once or twice a week. I bought everything online now, from food, vitamins, to detergents and shampoos,” she said.

Similar to Heidi, many people in Java, home to nearly 60 percent of the country’s population, flocked to e-commerce platforms. Today, couriers entering and leaving apartment complexes during lockdowns are a more frequent sight than the residents themselves.

Mahendra Riyanto, chairman of Indonesia Logistics Association, told Xinhua recently that the number of logistics orders for e-commerce goods in the country has increased by 30 to 40 percent during the pandemic.

“The pandemic has brought the development bonus of e-commerce in the next five years,” said Jonathan Zhong, CEO of J&T Cargo Indonesia.

In Asia Indonesia has the highest logistics, which takes up almost one quarter of the national gross domestic product. This is in contrast to developed economies, where the number is below 5 percent. The e-commerce boom during the pandemic has further exposed existing challenges in logistics, which include poor infrastructure, fragmented information and lack of technology, said Eric Dharma, vice president of Corporate Development of Waresix, a start-up trucking and warehousing platform in Indonesia.

According to a study last year conducted by one of Indonesia’s leading e-commerce platforms, Lazada, 65 percent of respondents from micro, small and medium enterprises that had not been digitalized stated that logistics was one of their biggest challenges.

Other islands suffer from even less efficient logistics than Java, resulting in price disparities.

“The prices of the same goods in different parts of Indonesia can be extremely different,” said Budi Handoko, COO and co-founder of a logistics aggregator Shipper. For example, instant noodles in Papua, Indonesia’s easternmost province, are a lot more expensive than in the capital.

This is where digital logistics management can step in and straighten things out, especially for a country of fragmented geography like Indonesia, said Handoko. The demand for a logistics system with higher cost efficiency is rather strong. And like Handoko, many have realized that digitalization is the solution.

“The silver lining is that the pandemic accelerated the digital push in the logistics industry,” said Riyanto.

Young and smart players in the industry have maintained fast-growing momentum during the pandemic by optimizing resource allocation. Digital platforms like Kargo, Ritase, Shipper and Waresix play as aggregators, offering end-to-end logistics solutions in which trucks, drivers and warehouses are selected by the system to match with shippers’ needs.

“We have over 50,000 trucks and over 400 warehouses across the country in our network. The system also helps to maximize their utility,” said Dharma.

As a Third-Party Logistics company, J&T Express owns an IT team of over 1,500 people to keep the technologies used throughout its operation updated. For Zhong, its IT team is decisive for improving efficiency.

In April, J&T Express launched its fastest “Super” service, which enables package delivery in the same city or across cities on the same day or the next day.

Meanwhile, Indonesia’s leading e-commerce platforms like Shopee and Lazada have been providing in-house delivery solutions in recent years to speed up the last-mile distribution from transit hubs to customers. In order to cut logistics costs, the Indonesian government established the National Logistics Ecosystem last September, which serves as a platform to record, simplify and finally speed up the originally paper-based process of goods moving from ports to warehouses.

 

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Business

MTCC reports staggering 82.9% net profit drop

FI

Published

1 day ago

on

01/05/2024

By

Maldives Transport and Contracting Company (MTCC) has reported a staggering 82.9% net profit decline for Q1-2024.

According to MTCC, it earned just MVR 5.2 million in net profit for the review quarter, which came down from MVR 30.8 million in the last quarter of 2023.

The company’s revenue for Q1-2024 stood at MVR 664.4 million, which is a 15.8% drop from MVR 789.2 million generated in the Q4-2023.

Moreover, MTCC reported a whopping 94.5% decline in its Gross Profit for the review quarter, registering MVR 2.5 million in Q1-2024 compared to MVR 44.3 million.

The operating profit for the review quarter stood at MVR 41.8 million, which is a 26% drop from MVR 56.5 million in Q3-2023.

The net asset value per share dropped from MVR 227.95 in Q4-2023 to MVR 226.98 to Q1-2024, while earnings per share saw a notable decline from MVR 3.83 in the preceding quarter to just MVR 0.65 in the review quarter.

Source(s): sun.mv

Continue Reading

Business

STO opens showroom in Hulhumale’

FI

Published

1 week ago

on

24/04/2024

By

State Trading Organization (STO) has opened a showroom specialized for construction in Hulhumale’.

The showroom was inaugurated by Construction Minister Dr. Abdulla Muthalib during a special ceremony held on Tuesday night.

Speaking at the ceremony, STO’s Managing Director Shimad Ibrahim stressed the role of the company’s former managements and board members in carrying forward the company and therefore extended them gratitude.

Situated at the same location as STO’s Hulhumale’ shop – next to STO’s Smart Store near Hulhuamle’ Hospital – the construction solutions showroom was opened following renovations up to modern standards.

STO reports that all construction-related products sold by the company will be available at the showroom including some of the most renowned brands sold by the company; Makita tools, Nippon paint and concrete from prominent mix designing brands among others.

The state-owned company is prominent in the local construction industry as STO’s constructions solutions is the largest importer and seller of construction-related products in the Maldives.

STO noted that customers can now place orders for construction-related products including Makita tools and Nippon paint via the Hulhumale’ showroom which would eliminate the need to travel to Male’ to make the purchases. Arrangements have been made in the showroom to prepare the colors of Nippon paint ordered by the customers on demand.

Henceforth, they attributed the opening of the new showroom as something which would bring easements to the lives of Hulhumale’ residents and construction industry partners operating in the suburb.

Source(s): sun.mv

Continue Reading

Business

Economy thrives, projects speed ahead despite challenges

FI

Published

2 weeks ago

on

18/04/2024

By

Before President Dr. Mohamed Muizzu assumed office, the economic condition of the Maldives was significantly deteriorating. Experts attribute the primary reason for the depreciation of the Maldivian currency to the excessive printing of money by the previous administration.

According to statistics from the Maldives Monetary Authority (MMA), more than USD 518.04 million was printed over the last three consecutive years, marking a historic high compared to USD 388.53 million printed over 40 years.

Additionally, upon assuming office, President Muizzu inherited a heavy debt burden. The total debt amounted to over USD 7.71 billion, with a significant portion owed to companies for upcoming parliamentary elections and previously initiated projects, totaling USD 584.88 million.

Despite these challenges, President Muizzu has been proactive in rejuvenating the Maldives’ economic status. Within three months of his tenure, USD 35 million has been deposited into the sovereign development fund. The President estimates that more than USD 100 million will be deposited into the fund by the end of the year.

discontinuation of printing money has been regarded as a pivotal step towards economic progression for the Maldives

President Muizzu’s commitment to revitalizing the Maldivian economy without resorting to the printing of money is indeed a significant pledge. By discontinuing the practice of printing money, the government aims to address economic challenges while ensuring fiscal responsibility and long-term sustainability.

The decision to immediately halt the printing of money upon assuming office underscores President Muizzu’s determination to prioritize sound monetary policy. This move reflects an acknowledgment of the risks associated with excessive money printing, including inflation and currency devaluation, and signals a commitment to addressing these challenges through prudent financial management.

Furthermore, President Muizzu’s plans to boost the country’s prosperity and income by reducing reliance on loans and settling debts owed to both foreign and domestic entities demonstrate a holistic approach to economic revitalization.

attracting a vast pool of investors

The efforts of the present administration to attract a wide range of investors reflect a strategic approach to addressing the significant development needs of the Maldives. By engaging in investment forums both domestically and abroad, the government has been successful in showcasing the diverse investment opportunities available in the country.

The decision to host investment forums in countries like China and the UAE demonstrates a proactive approach to international investment promotion. These forums serve as platforms for highlighting the potential for investment in key sectors such as infrastructure, tourism, and hospitality. By creating awareness about these opportunities, the government aims to attract investors who are interested in contributing to the development of critical projects, including the establishment of bridges, domestic airports, and resorts.

Over 500 projects underway

The continuation of 527 projects, including those that faced interruptions due to non-payment to companies during the government transition, underscores the commitment of President Muizzu’s administration to ensure continuity and progress in ongoing initiatives. Despite the challenges encountered, efforts have been made to address issues such as delayed payments and optimize project expenses to keep important projects on track.

It’s notable that the current year’s budget, initially approved by the prior administration, may not have fully aligned with President Muizzu’s priorities and rules for project implementation. This misalignment may have resulted in some projects not receiving adequate budget allocations or not being included in the budget at all. However, the administration has taken steps to optimize expenses and prioritize projects that align with President Muizzu’s vision for development

Initiatives to enhance economic growth and foster sustainable growth

The International Monetary Fund (IMF) has recognized President Muizzu’s initiatives as some of the strongest implementations seen among world leaders, emphasizing their potential for substantial progression. The IMF applauded the government’s decision not to overdraw the government’s account and expressed its readiness to provide any assistance needed. This endorsement from the IMF underscores the effectiveness of President Muizzu’s economic policies and strategies.

Additionally, the Maldives National Chamber of Commerce and Industries has voiced support for the government’s initiatives, recognizing them as favorable for the Maldivian future as a growing economy. Despite challenges such as a shortage of dollars for small businesses, the Chamber remains optimistic that the government’s decisive actions will lead to economic growth and stability in the value of the dollar.

The government has projected a 5.5 percent economic growth rate for this year, indicating confidence in the trajectory of the economy under President Muizzu’s leadership. Furthermore, President Muizzu revealed a significant reduction in the country’s primary debt balance, from USD 103.61 billion last year to USD 8.68 million in the current year. This reduction in debt, achieved within just four months, demonstrates the government’s commitment to fiscal responsibility and its ability to effectively manage the country’s finances.

Overall, these developments indicate that the government’s economic rejuvenation efforts have been successful, earning the confidence of global financial institutions in the Maldives’ future economic prospects.

Source(s): PsmNews

Continue Reading

Trending