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The logistics market in Indonesia is set to reach USD 300.3 billion by 2024. With one of the world’s highest adoption levels of e-commerce and a CAGR of 7.9%, Indonesia has become a growing hotspot for the CEP industry across the globe. With a growing population, increased internet penetration, and eCommerce, the business need for logistics services has seen a massive rise.
However, there are geographical as well as structural challenges. Indonesia is an archipelago comprising over 17000 islands, and without software support, it’s difficult to manage the complexities of multimodal logistics efficiently. Moreover, the trucking industry comprises small fleets, with more than 70% of delivery trucks in Indonesia not having GPS. Warehouse and inland modal players are highly fragmented and have not adopted digital technology.
Hence, businesses are increasingly looking for intelligent logistics software in Indonesia that can help overcome all the above-mentioned challenges, make logistics more efficient, and reduce overall operational costs. In this write-up, we dive deep into the major logistics hurdles in Indonesia and the key benefits smart logistics software offers.
The platform that enables planning, implementing, and simplifying the end-to-end supply chain processes is referred to as logistics software. These solutions help businesses make informed decisions regarding core logistics functions, such as 3PL management, distribution, deliveries, and enterprise growth, via real-time analytics and intelligent automation.
Logistics solutions help optimize and automate the management of processes like order management, inventory control and warehouse management, transportation, and seamless delivery management while providing complete visibility to all stakeholders. This helps with benefits like efficient resource availability, reduced operational risks, cost-effective deliveries, and great customer experience.
Before exploring how intelligent logistics management software in Indonesia can help businesses, it will be relevant to have a quick look at the logistics management challenges in Indonesia.
Fear of higher costs and a steep learning curve leads companies to continue with manual logistics management processes. But in today’s competitive market, manual management of operations like, inventory check, AWB generation, order dispatching, driver allocation, and delivery routes selection becomes tedious.
Coupled with increased human intervention, the chances of unintentional errors increase. Moreover, manufacturers have to manually check with shipping lines for RFQ, find the best shipping costs, and manually monitor the goods in transit.
In Indonesia, logistics costs vary between 25% – 30% of the GDP, compared to other nations where it is less than 5% of the GDP. With manual operations and a lack of data, businesses cannot identify improvement areas and fail to make a strategy to tackle such pain points effectively.
Without automation of repetitive and cumbersome tasks, the efficiency of the overall management process is significantly compromised. This results in lesser trips, increased idling, inefficient delivery routes, and consequently, sub-optimum utilization of assets.
The demand scenario depends on factors like festive seasons, business fluctuations, etc., and such trends cannot be manually gauged effectively. Without quick historical and recent data analysis, it is impossible to get actionable insights for forecasting demand and reducing the risk of overstocking or stock-outs.
Similarly, suppliers are not integrated without logistics management systems, and it is impossible to get instant updates and alerts on inventory levels, making decisions on production, inventory, or order confirmation very difficult.
With limited visibility into demand and supply, there will be low backhaul utilization; most of the time, trucks will return empty or partly utilized. In fact, the empty backhaul in Indonesia stands at a massive 40-50%, while the industry average is much less, between 20-25%.
Customers like to know their orders’ status and where they are in transit. They also want to talk directly to the driver to ensure they do not miss out on the delivery. Without transparency and visibility of operations, there will be a low first-attempt delivery rate and higher returns due to the unavailability of customers.
With customers informed about the status of their shipment in near real-time, logistics companies can maintain transparency and provide visibility throughout the shipment while avoiding any potential delivery-related issues. Logistics providers enable this with the help of smart logistics solutions that auto-trigger a tracking link and allow real-time visibility of shipments.
Lack of visibility of transit goods and drivers on a single screen also makes it difficult for the dispatcher to manage and monitor multiple shipments simultaneously, rendering effective operational control difficult.
LTL/FTL freights generally transported on pallets, and the carrier generally carries consignments from multiple clients/businesses. These pallets will have different destinations, and some will require unloading and re-loading on the way until the destination arrives.
This often increases the number of touchpoints and leads to disturbing or damaging the goods. It also leads to higher labor costs, increased delivery times, and inefficiencies. Without intelligent loading of FTL/LTL shipments in the delivery order, based on the delivery route, the express logistics providers will have poor productivity.
Most online shoppers expect same-day delivery and can abandon their shopping plan if unavailable. However, offering this service puts businesses under tremendous pressure to expedite their last-mile processes and add additional resources, which causes an increase in last-mile delivery costs.
In Indonesia, more than 85% of transportation and supply chain businesses still use paper ledgers for their operations, including managing drivers, expenses, fuel consumption, and route efficiency. These manual operations increase logistics costs and make them uncompetitive.
Having seen the challenges of logistics management in Indonesia, let us explore the benefits of adopting logistics software in Indonesia.
With smart logistics software in Indonesia, businesses can monitor transporter-wise, driver-wise, and vehicle-wise data on a range of parameters like on-time deliveries, cost, and customer complaints. This makes it possible to make data-driven decisions to streamline operations, cut costs and improve customer satisfaction levels.
With the visibility of all shipments and drivers on a single screen, dispatchers can monitor multiple shipments easily for efficient operations. AI-powered logistics solutions leverage in-built smart workflows for warehousing, distribution, transportation, and last-mile delivery operations. Using in-built algorithms, the automatic allocation for orders and real-time tracking of shipments are accomplished easily.
Logistics software provides real-time visibility of multiple shipments in transit, irrespective of the modes of transportation. All stakeholders, including customers, can track the exact location of goods in transit with accurate ETAs and push notifications via SMS/ Whatsapp/ chatbot. It provides dispatchers with real-time insights into delivery progress using RFID technology for managing SLAs and KPIs.
The system offers visibility into products in warehouses and can confirm orders instantly, along with the delivery time from the nearest fulfillment center due to the end-to-end automated oversight.
Logistics is a very competitive space, with high delivery costs and peak season surcharges eroding already thin profit margins. Additionally, sky-high customer expectations of quick deliveries add to the delivery costs.
In such a scenario, modern logistics providers have the competitive edge using software for automated warehousing, order management, and dispatch while capitalizing on a wide network of integrated own and partner fulfillment centers. This is made possible only with logistics management solutions.
Manual route planning fails to consider the dynamic nature of traffic, and finding the best route to deliver shipments becomes a big chore.
Logistics software enables the dispatcher to generate automated optimal travel routes for multiple order deliveries, with customization for the number of stops, vehicle capacity, available drivers, and promised ETAs. This allows allocated drivers to have a clear visual route that factors in real-time conditions like traffic and weather.
These features, which enable intelligent route planning and optimization with reduced fuel costs, increased delivery count, and speed, are difficult to have in a manual or standalone system. However, an integrated and customizable logistics management system can ensure seamless operations with such features.
While selecting the right load type for the shipment, the nature of goods, delivery ETAs, and delivery type play a crucial role in the final choice. Automated carrier management software uses AI to help businesses choose the most profitable and efficient carrier for every shipment, irrespective of the load type and shipment nature.
Custom parameters can be set to configure the system for prioritizing the carrier partners for those parameters. This helps in drawing an optimal balance between cost, efficiency, and SLAs for highly cost-efficient transportation.
Automation can help reduce manual processes across the supply chain as follows:
Shipsy’s SaaS-based platform has a module-based architecture that allows the selection of features required to run the business operations:
Unlike legacy freight and logistics management software, Shipsy caters to diverse industries like manufacturing, courier, freight forwarding, and hyper-local e-commerce fulfillment. Businesses using Shipsy for their logistics software in Indonesia can make the most of automated, scalable, smart logistics management and unlock:
Want to know more about how Shipsy can help achieve the above results? Please schedule a customized demo with our experts today.