How to Choose the Right Last Mile Logistics Software in Indonesia

Last-mile delivery in Indonesia is a growing challenge for retailers and logistics companies. With over 17,000 islands and a population of more than 260 million people, the country poses unique difficulties in delivering packages to customers. Many areas lack proper infrastructure, such as roads and bridges, making it difficult for delivery trucks to reach remote and rural regions. Additionally, the country’s dense urban areas often experience high levels of traffic congestion, leading to delays and increased costs for delivery companies.

Last Mile Logistics Software in Indonesia – A Quick Glance at the Numbers

Stats project that the size of the freight logistics market in Indonesia is going to increase by USD 28.7 billion, and the market is in for a decline at a CAGR of 9.45% between 2022 and 2027. Further, the market is fragmented as all the major players hold less than 10% of the total market share.

On the other hand, rapid economic growth, population growth, and urbanization surge is calling for efficient last mile logistics management to keep up with the demand for deliveries and services. This is where last mile logistics software helps companies to manage the most challenging part of their logistics chain – the last mile delivery – and ultimately improve service levels, as well as reduce costs.

While the logistics automation market is also teeming with multiple options and businesses are looking for rapid technological adoption, not all the last mile logistics solutions work the same or come with reliable and versatile offerings.

Here, we discuss the key considerations for choosing a last mile logistics solution in Indonesia, what makes a logistics solution the perfect fit, and what these solutions can help businesses and supply chain professionals achieve. 

Last Mile Logistics Software in Indonesia – Understanding the Basics and Key Demand Drivers 

Research indicates that Indonesia’s logistics sector is highly inefficient, as indicated by logistics cost variation of 25%-30% of the total GDP, which is less than 5% of the GDP in developed countries. To combat this, the government has increased the allowed level of foreign ownership to 67%, seeking investments from international logistics service providers.

Another crucial component to understand is the growing “consumption”. Growing eCommerce, improving middle class, and a large population are driving the growth in the eCommerce segment, which is expected to reach USD 130 bn in 2025.

Further, social commerce and online marketplaces are also driving the demand for last mile logistics, which continues to be the most expensive part of the entire supply chain. The inability to optimize the road freight movements, reduce fuel consumption costs, and lack of visibility over shipment and asset movements increase the overall logistics costs.

All these factors are driving the need for highly intelligent and reliable last mile logistics solutions in Indonesia that can help businesses reduce costs, optimize resource utilization, and orchestrate highly efficient deliveries with data insights. 

Let us quickly explore the various benefits last mile logistics software solutions can offer.

Optimizing the Last Mile in Indonesia – How Can Automation Help

 #1 – Delivery Trip Optimization

Last mile logistics software offers AI-based optimization routines for delivery trips that ensure route optimization, asset optimization, and vehicle optimization. This means that every rider is traveling with accurate routes that are generated for multiple deliveries and as per multiple optimization constraints. 

The field operations are monitored, managed, tracked, and controlled via smart and highly intuitive apps that allow users to complete all their tasks aided via smart workflow automation. This helps reduce empty miles traveled and fuel wastage and shrink the overall delivery costs.

#2 – Real-Time Communication

All the stakeholders – customers, riders, businesses, managers, etc. – get automated updates, alerts, and messages for key milestone events in a standardized format. This means that every task completed by a rider, transportation manager, customer, etc., is recorded and conveyed automatically to all the relevant stakeholders.

This real-time communication reduces the confusion in the entire supply chain and makes it possible for businesses to ensure a firm grip over all the happenings. The customers are sent automated alerts for upcoming deliveries to ensure the first-attempt delivery success, and the managers get automated alerts for deliveries – completed, canceled, failed, etc.

#3 – Automated Proof of Delivery (PoD)

Once delivery is completed, the rider can upload the PoD in the rider app, which can be an image of the consignment, etc. The reasons submitted by the riders for delivery failure as well as the PoDs are confirmed and validated at the customers’ end, and the feedback collection is also automated. 

Hence, the frauds and foul plays on behalf of any party are captured and deterred via smart in-built delivery flows. 

#4 – Automated Cash Reconciliation

When customers place a cash-on-delivery order, managing this cash and ensuring its secure handling becomes a hassle for businesses. Smart last mile logistics software in Indonesia can help tackle this problem via automated cash reconciliation routines. The amount of cash that a rider can carry is limited and needs to be submitted at the warehouse for successful shift completion. 

Other smart ways include settlement of rider payouts against the COD cash and offering digital payment options to the customers at the time of delivery, even if they have placed a COD order initially. 

#5 – Real-Time Visibility

By using last mile delivery software in Indonesia, businesses can ensure 100% visibility over the asset (rider and vehicles) and shipment movements. They can check whether a rider is deviating from the system-suggested path or not and where exactly a shipment is located at a point in time.

Further, the customers can track their orders in real-time and get automated updates for every key milestone event. 

Now that we have had a look at the multiple benefits of using software for last mile delivery, let us move on to the key considerations businesses should consider while choosing last mile delivery software in Indonesia.

Last Mile Logistics Software in Indonesia – How to Make the Right Choice

While there is a bevy of options to choose from, every business has a set of specific business-unique pain points that require custom solutions. Still, there are some key offerings every business should look for while choosing a last mile logistics solution in Indonesia, such as:

• Seamless driver onboarding
• Automated rider payout and incentive management
• Intelligent trip scheduling
• Automated route planning and optimization
• Effortless integration with the existing infrastructure
• Hassle-free 3PL management and optimization

Further, it is important to opt for a solution that scales as per the business requirements and helps ensure flexibility.

Shipsy – AI-Powered Last Mile Logistics Software in Indonesia

Shipsy’s last mile logistics software leverages artificial intelligence, machine learning, and other advanced technologies to help brands optimize their operations and reduce their operational costs. It is a customized SaaS-based solution provider that can be effortlessly integrated into the existing technological infrastructure and ensures hassle-free migration.

The last mile logistics software optimizes delivery routes, riders, vehicles, and more, to reduce the distance traveled per shipment. It also helps businesses prioritize eco-friendly delivery modes such as electric vehicles (for longer distances) and bicycles (for short distances) to reduce carbon footprint. Finally, dynamic order clubbing ensures fuel consumption minimization, and advanced territory optimization help enhance the driver’s productivity to unlock benefits such as:

• 18% lesser ‘return to origin’
• 37% increase in vehicle capacity utilization
• 14% increase in deliveries per rider
• 6% reduction in trip volumes 
• 5% reduction in distance traveled 

To learn more about Shipsy’s last mile delivery management software, or to get started, please get in touch with our experts and schedule a customized demo today.