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Consolidate shipments for hub to hub movement across land and air
Real-time customer communications and collect accurate PODs
Orchestrate logistics operations with multiple 3rd party carriers
Achieve cost effective, scalable, sustainable, and customer centric deliveries
Orchestrate all your cross-border logistics operations with ease
Improve address accuracy, ensure first-attempt delivery success, reduce costs and boost customer experience
Gain end-to-end shipment visibility, get proactive alerts, and send customers live tracking links
Grow business in a dynamic world and manage operations across First, Middle & Last mile
Delight customers by seamlessly managing store and online orders across own fleet and 3rd party
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The freight and logistics market in Indonesia has grown significantly from USD 81.30 bn in 2020 to USD 138.04 billion by 2026. With the growth in the freight and logistics market, freight management needs have also increased. Manual freight management methods are no longer effective, and the increased demand for diverse delivery types calls for better and more flexible management of freight.
This renewed focus on better freight management comes at a cost because it requires technology integration, advanced computing infrastructure, and a highly smart collaboration and communication platform for multiple stakeholders.
However, the geography-wise challenges and changing market demands are making it hard to manage supply chains and logistical operations efficiently.
Hence, it becomes crucial for businesses looking for freight management software in Indonesia to understand the core management challenges, the current market landscape, and how to choose the right automation.
In this write-up, we explore all these points in detail and also discuss how customized freight management platforms can work wonders for businesses in the domestic and global logistics space.
Companies operating in the freight and logistics industry in Indonesia are in for expected to witness a massive growth in the coming years because of several factors, such as growing eCommerce. The eCommerce sector growth is further fueled by rapid digitalization and increasing internet penetration within the country.
In addition, Indonesia’s Export/Import stats are highly promising. Indonesia’s exported goods value amounted to USD 229.85 billion in 2021, which is a significant increase from USD 163.31 in 2020. Likewise, the imports touched USD 196.04 bn in 2021 as compared to USD 141.62 bn in 2020.
Indonesia’s cold chain logistics market is showing an up-trend, especially after the end of 2020, majorly involving the fruits and vegetables, dairy & frozen meat, frozen dessert, and drug & pharmaceuticals segments. The Indonesian government is also taking substantial steps by releasing funds for the development of logistics infrastructure, boosting the freight industry.
While there’s plenty of potential for businesses in the freight management industry in Indonesia, there are several gaps in the market. For instance, the market is fragmented, there’s a lack of technology adoption and standardization, resource utilization is poor, and the overall logistics costs are high.
Hence, investing in freight management software in Indonesia comes as a major business decision that should ensure that all these challenges are tackled, all the while delivering business excellence.
One of the biggest key drivers leading to an increased demand of smart freight management software in Indonesia is the rapidly growing e-commerce industry. Thanks to the rising internet penetration, digitization, and rise of e-commerce websites, there is a massive change in consumer behavior.
While Indonesia’s market isn’t as mature as that of Singapore and Malaysia, the huge population (260 million) is helping the country grow millions of new online shoppers each year. Consequently, Indonesia’s eCommerce revenue is expected to touch USD 105.60 bn by 2027.
This boom in e-commerce is directly fueling the growth of the freight industry, as more orders/shipments are being generated globally for delivery in both the domestic and international customer space.
The Indonesian government has always been focused on promoting the growth of the freight and logistics sector.
For instance, the government drafted a budget of $400 million for infrastructure development for the 2020-2024 period, out of which 60% will go into transportation infrastructure. Another plan was formulated to establish new roads, sea ports, and airports, all of which contributed to the growth of the freight and logistics industry.
In addition to government intervention, modern trade is also contributing to the growing freight and logistics industry.
In the past couple of years, Indonesia has witnessed exponential growth in the value of imported and exported goods. This increase in export and imports is positively impacting the freight and logistics industry in Indonesia as more shipments are being created and more goods are being shipped and delivered.
As orders are being placed by a tech-savvy and internet-loving population, it becomes crucial to ensure timely deliveries, robust communication for shipment status updates, and proactive alerts for all the key milestone events.
The freight and logistics industry in Indonesia is quite fragmented, especially regarding the international players. For instance, just 30% of the market is occupied by international players, and the rest 70% is made up of local players majorly small.
This fragmentation has created a competitive landscape wherein businesses are competing with each other to increase their market share. Several businesses are adopting strategies such as acquisitions, joint ventures, agreements, mergers, and integrating freight management software in Indonesia to gain a competitive advantage.
This increases the need to perform better and entice customers with highly efficient and optimized services without hurting the bottom lines. Hence, the need for resource-efficient freight management software in Indonesia is urgent.
Despite the market potential, businesses in Indonesia still struggle because of weak transportation infrastructure and connectivity. All because of the unique geographical nature of Indonesia that requires multimodal transportation (air, land, sea, rail) for shipping the goods.
Owing to the lack of integrated infrastructure for management, monitoring, controlling, and tracking the operations and assets, the delivery of products takes more time and costs more. Further, the businesses are struggling to communicate and collaborate with all the logistics and supply chain stakeholders in an integrated manner which affects overall productivity and efficiency.
As stated earlier, Indonesia has a unique geography (comprising 17000+ islands), because of which shippers have to opt for different modes of transport to deliver goods across large distances, leading to high overall logistics costs.
While logistics cost per GDP in Indonesia has decreased over the years, it’s still the highest among its peers in Southeast Asia. To put into perspective, the logistics costs in Indonesia amount to 25-30% of the country’s GDP.
Yet another factor that challenges the freight industry in Indonesia is the improper use of all modes of transport. As much as 90% of logistics relies on land transport, completely ignoring sea, road, and rail benefits.
As the roads aren’t well connected and paved, it leads to an ineffective supply chain and long delays in delivering shipments. Longer lead times translate into operational and supply chain inefficiencies and impact the profitability of businesses as well.
The freight management system that businesses follow is pretty inefficient and involves negotiations between transporters, brokers, and shippers, often leading to empty back-hauls. This further reduces the economy per truck, adding to the losses.
Stats reveal that while the industry average for empty truck backhaul is between 20% and 25%, in Indonesia, this stands at a massive 40-50%. In addition, inefficient systems often lead to wrong predictions causing SLA breaches, inability to track trucks, and missing cargo, among other issues.
Unequal infrastructure and operational inefficiencies lead to the underutilization of resources in the logistics industry. For instance, the trucks that return after delivering a shipment are often empty, especially in the regions outside Sumatra, Bali, and Java, adding to the overall shipping costs.
To understand this better, take Europe and Thailand, for example. Europe’s truck utilization stands at 200,000 km/year, Thailand’s truck utilization stands at 150,000 km/year, and Indonesia’s truck utilization stands at just 50,000 km/year. No wonder logistics costs are reaching through the roof.
Despite Indonesia’s huge market potential, the logistics industry is fragmented, i.e., divided into small parts. Around 90% of the trucking companies own 100 trucks or less, and 75% own 20 trucks or less. Owner-operators are unable to connect with businesses with shipping needs because of a lack of a functional network and the right knowledge, which prevents them from scaling.
While the eCommerce industry is on the rise in Indonesia, the freight industry lacks digitization. Several logistics providers rely on obsolete freight management methods for tracking their fleet and operations, including pen-and-paper ledgers leading to a lack of optimization, demurrage, delayed deliveries, higher shipment costs, etc.
However, end-to-end freight management software in Indonesia can potentially solve the challenges by consolidating the players in the freight industry and creating a centralized and more efficient system.
Shipsy comes with end-to-end freight management software in Indonesia that can help you overcome all of the aforementioned challenges and ensure exponential growth in multiple ways, some of which we explain below.
Indonesia’s freight and logistics industry struggles with high logistics costs because of multimodal transport (inability to track packages, communication gaps etc).
However, with Shipsy’s end-to-end freight management platform, businesses can achieve better visibility across multiple carriers and bulk shipments. The system offers smart management and real-time alerts keeping all the stakeholders posted and ensuring increased transparency and smooth movement.
In addition, with automated billing and multi-channel functionalities, digital document handling multimodal transport becomes more optimized, efficient, and thus affordable.
There’s widespread fragmentation in the freight and logistics industry within Indonesia. Everything from spot inquiries, RFQ, and document handling to price procurement and communication is managed by different players lacking automation which leads to data and information silos.
Shipsy’s end-to-end freight management platform tackles this issue by consolidating everything using automation in a single dashboard. Our smart logistics management software offers integrated information such as tracking details of shipments via rail, road, sea, or air, real-time alerts, documentation, and communication all in one place, offering businesses a centralized system.
Operational inefficiencies such as the inability to optimize the route or wrong predictions lead to poor resource utilization, meaning the trucks often return empty or half-loaded, adding to the costs.
Unlike legacy tools that don’t allow for additional constraints, Shipsy’s software allows you to add as many constraints as you need, such as vehicle capacity, temperature control, shipment volume, weight, size, and vehicle make for effective route planning and to reduce the miles driven and thus utilize the vehicle to its full capacity.
This way, businesses can save money, especially during cold chain logistics, and utilize the resources in the best way possible.
One of the biggest reasons why businesses in the Indonesian freight industry aren’t growing at the expected rate is the lack of digitization and the use of obsolete manual and inefficient methods. However, Shipsy’s end-to-end freight management system can help tackle this issue.
Our smart freight management system in Indonesia can help businesses automate all aspects of freight management, from freight procurement, bidding, tracking shipments, and facilitating documents to reconciling invoices.
Businesses can track shipments and get real-time visibility, ensuring 100% transparency. And with this data at hand, they can become more operationally efficient by making strategic decisions to minimize losses during demurrage, detention, transport delays, etc.
Moreover, they can automate redundant back-office tasks such as preparing bills and invoices and optimizing internal operations.
Unlike legacy freight management software that offers limited features targeting specific industries, Shipsy caters to businesses of all types. Shipsy offers integrated solutions to all industries, such as manufacturing, courier, freight forwarding, etc., customized based on their needs.
This way, regardless of the industry, businesses can make the most out of our automated and smart logistics management software in Indonesia and stay ahead of their competitors.
To put into perspective, by opting for Shipsy’s end-to-end freight management software in Indonesia, businesses can:
Want to know more about how Shipsy can help you achieve the above benefits? Book a free customized demo today!
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