Cargo Times (CT): What challenges that the express companies face during the pandemic?

Mohammad Feriadi (M. Feriadi), the General Chairman of ASPERINDO : The first dilemma was on Human Resources Costs. Our industry is a labor-intensive industry (many human resource involve) as there are some deliveries that physical involvement and cannot be replaced by machines or other tools. So the first challenge is how we still can improve the Human Resource’s performance. The performance improvement is not extravagant; how to make our workers can still work as in the normal condition. In fact, the condition is not normal. For companies that their delivery volumes are still stabile, their challenge is how to make their employees still have high spirit to do their works and follow the Covid-19 health protocol. And for the companies that experience sharp decline, the members hopes for sympathetic due to their companies’ condition. Some members made a policy to send home their employees. This Eid-ul Fitr, the companies have obligation to pay THR (Holliday Allowance) to their employees.

The second dilemma is company’s liquidity to pay the company’s operation. The liquidity problem is experienced by almost all companiestoday because the finance obligation such as fix cost and variable cost that should be expensed. The problems are becoming bigger and felt by the companies that have contract base delivery with credit payment. It needs longer breath.

Another problem is the smoothness of operation nationally. By the legal or illegal Big Scale Social Distancing (PSBB), it will, at least, obstruct the goods distribution certainty and swiftness. The obstruction implicate the increase of operation costs.

CT: What is the pandemic effect on express companies?

M. Feriadi: This kind of logistics, posts and express delivery is an end to end service, meanwhile, as we know, Indonesia is a very big archipelago country. Currently, we still can provide delivery services from and to all Indonesian regions. The business process of delivery services that we often said is Collect – In Processing – Transportation – Out Processing – Delivery (CPTPD). So, if there’s one obstruction point in one region, it will hamper the delivery process wholly.

The Direct effect of SUPPLY SIDE during the Covid-19 is the decline of carriage capacity/air, sea and land transportation due to transportation limitation policy. At the same time, it has hampered the ease of delivery supply-distribution. As we know, transportation is an important link in our business process of CPTPD

The direct effect from DEMAND SIDE is the increase of delivery from individuals or end user. This is affected directly by: 1) Behavior change on direct purchase online and/or, 2) the regional restriction because nobody can visit each other so that it change to deliver staples, foods/culinary, fashion, medicines, etc.

Entering the months of March to April 2020, we experienced the deliveries from abroad decreased drastically. We even can say that there’s no deliveries from and to abroad due to the limitation of flight or limitation delivery of Medical tools for Covid-19 that have been sold across countries.

However, there are 2 things that became important records to be grateful of, they are: First, domestic delivery volume, in the city, across cities and across provinces show increase trend with various deliveries. The biggest deliveries that are associated with Covid-19 (PPE/Personal Protective Equipment, Face Masks and etc) and other deliveries spike. After we reviewed the types of goods we delivered, most of them were delivered to individuals as end-users (we often call them Business to Customer/B2C, Government to Citizen/G2C or Customer to customer/C2C delivery).

Yet, not for the members whose customers are government or corporate as they stop operation temporarily so the delivery from this sector/segment decrease drastically. We often call this segment as G2G and B2B. Even there are still some demands but, overall, it’s smaller.

CT: The Ministry of Communication and Information (KEMENKOMINFO) said the logistic and post industries are ones of the main contributors for the national economy during PSBB. Is there any proof? Is there any relation with the statement over online shopping that increase up to 400%?

M. Feriadi: The Recommendation Letter KEMENKOMINFO No. 728/DJPPI.6/PI.05.02/03/2020 on 30 March 2020 is about Covid-19 Handling in Information and Post sectors. And with this letter, the posts, express and logistic sectors can operate. We have no idea what we would do without this letter. Probably, we would have closed our operation during the Covid-19 or we were excluded during the PSBB. We really appreciated the Ministry of Communication and Information over this recommendation letter.

Regarding the subject about the increase of retail shopping up to 400%, you may ask for the detail directly to the Ministry of Communication and Information. However, from the companies, who are the members of ASPERINDO, the deliveries that are dominated by C2C experience increase with various figures in each company.

CT: What is the anticipation from express companies after the implementation of “New Normal”?

M. Feriadi: There are 3 (three) things that have become our commitment, and they are agreed by all members of the Association, they are:

1. The delivery services should be still foremost. What we considered first that time was how delivery services, that involve many people and spread across Indonesia to the remote areas, should perform. There should be a strong statement from us about what we must do. Based on the benchmark for other countries that have been impacted by the pandemic before us, the delivery services still operate (precisely: become one of the sectors that got dispensation to keep operating) yet we still have to follow the Covid-19 health protocol as in the government’s stipulation. Therefore, as the Chairman of ASPERINDO, we give strong moral supports to all members to keep operating and be able to give their best services.

2. We instructed all operation lines, especially the couriers should keep working and giving the best service quality. I am sure there was some doubts, but we are certain that the delivery should still operate because we see this sector has become people’s need. As we knew, Alhamdullilah, that government also consider to give permit for the delivery sector to operate. We broadcasted our slogan “the last man standing”. On 26 March 2020 coincided with the 34th anniversary of ASPERINDO, we also declared to fight against the Covid-19.

3. On 20 March 2020, ASPERINDO has issued a circulation to the members about brief guidance of the Covid-19 handling preparedness. Our guideline, that time, was the instruction from The Head of The National Disaster Mitigation Agency (BNPB) as The Head of The National Covid-19 Task Force (Gugus Tugas Covid-19). We see the guideline is very important and urgent to be known and obeyed by all members as the risks that might occur in our work, especially the impact to our staffs who interact directly with the customers. We really appreciated the circulation we issued is very effective and right in time to make all members realize to implement the health protocol.

CT: What is ASPERINDO’s social contribution to lighten people’s burden who are affected by the pandemic?

M. Feriadi: On March 26th, 2020, the date of ASPERINDO’s 34th anniversary, we declared ASPERINDO preparedness and care to encounter the global pandemic of Covid-19 by doing social work such as disinfectant spray in Tomang area, which was signed as the red zone with the highest infected numbers of positive Covid-19. Our preparedness and care actions were followed by other members’ network and Regional Executive Board-Province Executive Board (DPW-DPD) in all over Indonesia.

The care actions is not only the Corporate actions through free delivery and discounts to the government institutions, non-governmental organization (LSM), communities who deliver the Covid-19 Health Equipment, but also social actions to give social donations to people in needs.

Some social actions that could be inventoried, such as: 1) Donation to DKI Provincial Government for Rp 1 Billion, 2) Donation to West Jakarta Regional Government for Rp 150 million, 3) Free delivery of PPE to all hospitals in all over Indonesia, 4) Care actions worked by all ASPERINDO DPW-DPD networks in all over Indonesia, and, 5) Other care actions to welcome Ramadhan and Eid-ul Fitr.

CT: During the pandemic, ASPERINDO release a data about the low deliveries to overseas. ASPERINDO hopes this could become a good moment for the national SME (UKM) to meet Indonesian people’s needs. What kind of ASPERINDO’s supports to make the opportunity happened to SME?

M. Feriadi: As the logistics and posts services are still open and we improve our services, it means all SMEs can make or do transactions during the pandemic. This is a proof to increase SMEs transaction from domestic. We urge the members to improve their performance for SMEs, like pick up services and swift, punctuality and safety oriented services. We also conduct some communications for SMEs development. The implementation should be adjusted with the current situation (such as online meeting or webinar).

CT: During the pandemic, all airline companies stop their operation. Is there any effect for ASPERINDO?

M. Feriadi: One of the obstacles that happened is the trim of commercial routes, which, at that time, the policy for flight limitation was issued because some of air transportation still depend on commercial flights.

However, today we are embracing the new normal. We also welcome the freighters positively as they will improve the capacity of domestic flights.

CT: How ASPERINDO see the expansion of national companies that provide freighters for cargoes?

M. Feriadi: With the blooming of freighters operation, it would create ecosystem of air cargo freighter better. ASPERINDO welcome them well and hope they will still operate in the future. We predicted the delivery volume in the new era would increase.