Wednesday, 11 November 2020
Learning and Adaptation, Angkasa Pura Logistics' Key Toward Dynamic Market Challenges

PT Angkasa Pura Logistik (APLog), a subsidiary of PT. Angkasa Pura I (Persero), is a national logistics company that offers a wide range of logistics services as well as logistics solutions in various industrial fields, through the support in air, sea, and land transportation network globally to accommodate all activities from East to West Indonesia archipelago.

Currently, the global pandemic of Covid 19 has had negative impacts against all business sectors, including in Indonesia. Likewise, in the transportation and logistics sectors. However, for APLog, the impact of the pandemic is a challenge that must be faced and overcome with various solutions and applicable strategies for the sustainability of the company.

To find out more about the latest activities, the solutions from Angkasa Pura Logistics business challenges, Cargo Times (CT) was given a special opportunity to interview Danny P. Thaharsyah, President Director of PT Angkasa Pura Logistik via an online meeting.

CT: Last September, APLog added another ATR freighter for the Air Freight service business. Besides the connectivity, are the demands for the cargo business increasing? Or because many airlines do not operate their fleets optimally?

Danny : We actually planned this APLog Air Freight business line in the previous year and became one of our strategic plans. So it’s not because of a pandemic situation, then we suddenly created this Air Freight business line. We see that in the Air Freight business there are strategic needs that we think (consider) to enter into the business.

In terms of connectivity, cargo logistics is less than optimal, especially in eastern Indonesia due to a lack of transportation connectivity. There has been an assumption we use belly cargo space for cargoes so far, while the concept based on goods delivery logic and the logic of passengers is not always the same. As a result, areas that have cargo potential don’t have developing tourism potential, so in the end the passenger airplanes do not go to areas with large cargo potential, such as marine products, perishable goods and others. As a result, these goods become more expensive because the route has to follow the route of a passenger airplane or the quality decreases so that the price is no longer premium price.

With the large business potential and the strategic government projects, APLog sees connectivity that can be tailor-made for cargo connectivity so that it has a better supply-chain to create cheaper logistics costs.

Based on that, it became our plan to enter the Air Freight business. That is also the reason why we chose ATR aircraft which become a feeder to enter potential places or areas but haven’t been connected yet.

In the beginning of the pandemic, the cargo market was severely affected, because volume dropped, especially in April, May and June. The position of the cargo is very low. At that time, general cargo and consumer goods were in circulation, but production goods were relatively declining. We have checked them in the outgoing Cargo Terminal data. In the cargo terminal, incoming cargoes did increase because a lot of general cargoes came in, but outgoing goods from those regions decreased.

For information, at this time the numbers of cargoes handled by APLog, compared to the normal situation (before the pandemic), decreased by around 20% - 30%. But now the trend has started to rise again and hopefully it can recover quickly.

Regarding airlines, once the pandemic occurred, they stopped operating to transport passengers. Then with the Circular of the Directorate General of Aviation Transportation Number 17 of 2020 (SE 17/2020), airlines are in competition to transport cargoes. So that strong competition occurred. However, APLog is actually looking at feeder routes to build connectivity, especially those with great potential.

Especially for the Boeing (type 737-300F) aircraft, it has been planned this year for export activities. So with the “Hub & Spoke” system, the feeder is ATR, the export uses Boeing. However, the pandemic has disrupted overseas buyers. So that the cargo dropped once. But with the speed of global economic recovery, hope, the demands would start rising again.

That’s why APLog plans to complete the fleet in 2021. The plan is to have a hub in Makassar for direct export activities to the International. However, there is also an APLog plan to codeshare with Garuda Indonesia for international flight connections.

So the company’s strategic plan is still implemented, despite technical obstacles. The point is that the company will not recede, it will continue to move forward by rearranging the strategic plan.

CT: APLog has opened a Human Remain Lounge service in Bali, what is the potential for this service for the company?

Danny : Human Remain Lounge is one of our services at the Cargo Terminal in Bali. Previously, we often served human remains shipments, both from abroad, whose families might be in Bali, so they were sent to Bali, or their positions were in Bali to be sent to their places of origin.

In the previous moment, we often saw that sometimes the grieving families were not served well while in the Cargo Terminal. Besides the human remains were placed together with other goods, the facilities, processions, and time were also minimal.

Besides that, there are also bereaved families who need religious processions. The grieving procession seems less appropriate if it is held at the Cargo Terminal because of the workers’ busy activities. Therefore, we prepare a special place so that they (customers) feel more comfortable to carry out the grief procession.

From this we see an opportunity to provide service excellence to customers. Plus, in Bali the human remains traffic is quite large, so we need to strengthen this service so that it is good in the eyes of customers and internationally.

Indeed, we have a plan that this service will not only be in Bali, but also in other cities that have potential, such as Surabaya.

CT: How many branch offices, transportation fleets, and human resources at APLog up to now?

Danny: Until now, we have 17 branch offices plus 1 representative office in Singapore for export-import services. The branch offices outside the operations of PT Angkasa Pura I (Persero), namely in Gorontalo, Kendari and Batam and the rest are branch offices managed by our parent company PT Angkasa Pura I (Persero).

About 3 months ago we opened a branch office in Batam. Because we see that Batam has a strategic position plus there is PT Angkasa Pura I’s (Persero) plan to participate in the selection process to manage Batam Hang Nadim International Airport. Once it happens, we will have been ready. At the Batam Branch Office we have a Temporary Storage (TPS). Furthermore, we will also develop it for logistics activities.

The opening of a Branch Office, especially at the airport managed by PT Angkasa Pura I (Persero), is indeed our obligation because we are a part of PT Angkasa Pura I (Persero). But to set up a branch office outside the airport managed by PT Angkasa Pura I (Persero), we consider how potential the logistics business is. Because we have 4 main businesses, namely, Cargo Terminals, Regulated Agent, Total Baggage Solution (TBS) and Logistics.

The development of all our branch offices does not have to include our 4 main businesses. Like Gorontalo or Kendari at that time, it was the development of the Cargo Terminal unit. Meanwhile, the Batam Branch Office is a development of the logistics unit.

Apart from having a Freighter fleet, we also have truck fleets. The numbers are quite a lot, and the trucks are in almost all of our branch offices. Even at our Head Office there are several good trucks for cargo transportation like wing boxes, flat decks, trailers, and CDD / CDE.

Wingbox, particularly, has regular operations to serve the Jakarta - Semarang - Surabaya - Bali (VV) and Jakarta - Solo - Yogyakarta - Surabaya (VV) routes. This fleet is used as a connecting, door to door, and city to city. Some are used for the Project business, especially for Heavy Lift Cargo or Over Dimension transportation. For APLog, this trucking service by land and sea seems quite active. But indeed in this pandemic situation the activities of the heavy equipment industries are not good and that is a challenge for us.

Our human resources are now around 1,800 people spreading across branches and central offices. The largest numbers of human resources are in the Cargo Terminal.

CT: Besides Air Freight, how about developing the Sea Freight business? And which of these businesses is more profitable?

Danny : For Sea Freight, the embryo is quite old. This begins with the increase in Heavy Lift Cargo project activities, such as the delivery of Aerobridges cargo to the airport in Ambon. This activity certainly requires ships as the main transportation because the type of cargo is Over Dimension, which cannot be carried by a freighter. Therefore, APLog strengthens this potential Sea Freight business by partnering with experienced vendors in shipping.

Regarding the logistics business that is profitable for the company, actually we relatively get standard margins from Sea and Air Freight or other logistics businesses . That’s why we really have to be precise in executing so that the costs are not too overly, therefore the margins will not be disturbed.

But for Special Projects, such as Heavy Lift Cargo and Dangerous Goods (DG), the company can get a significant margin because handling this transportation project requires special experience, knowledge and skills.

CT: During this pandemic, is there a special strategy so that APLog can still continue to run its business, and even get a profit?

Danny : The fact is that currently, the pandemic has made many logistics companies no longer operate due to losses or just surviving. Logistics activities still exist but the market is plummeting because the volume of manufactured goods has also decreased. As a result, there are fewer logistical players.

APLog only applies a strategy of keeping performance to markets that still require logistic activities.

Apart from that, APLog is also implementing an efficiency strategy, but does not aim to make big profits as many economic sectors have been negatively affected. As part of a state company, APLog also supports cargo shipments from the National Board for Disaster Management (BNPB), the Ministry of Social Affairs and other institutions for the donations, medical devices and others.

Besides strategy, in running a business today, it takes creative and dynamic thinking for customers in providing solutions, and always make up communications. Because the current logistics delivery also has its own challenges. For example, when the BNPB medical device was delivered from Jakarta to Gorontalo, the airport in Gorontalo was closed due to the strict policy of Large-Scale Social Restrictions (PSBB) from the Governor of Gorontalo. Finally, we provide a solution by landing the cargo in Makassar, then we continue the delivery using a truck.

CT: Regarding the Transshipment service in Bali, how is its development now? And do you have any plans to open in another city?

Danny : Our Transshipment in Bali is indeed the most affected after this pandemic, because international airlines in Bali don’t operate, so practically our Transshipment terminal is empty.

If we consider the potential of the Transshipment business in Bali, it is very supportive, because Bali has a strategic location with various route choices, especially for international routes, so Bali has enormous Transshipment potential. For example, from South to North or from East to West. With the current situation, we are still optimistic about our Transshipment in Bali and are sure that it will become an alternative, maybe we even hope to replace Singapore’s position. At least it can be a more competitive alternative.

Indeed, during this pandemic, our Transshipment was shut down. We continue to improve human resources competencies and continue to maintain good relations with Bali Customs so that if one day the Transshipment reopen, we will be ready. Now, slowly, international flights have operated so that our Transshipment will start moving again.

For the plans to open the Transshipment services in other areas, of course, this will become our consideration. To open the Transshipment service, it must be planned carefully by considering all sides, such as the choice of airlines, frequencies and routes. Meanwhile, at several airports managed by PT Angkasa Pura I (Persero) the frequency of international flights is still limited. It is possible that after Bali, the next Transshipment will be in Surabaya.

And, we do have hopes in the future to develop the logistics potential at YIA Kulon Progo International Airport, because PT Angkasa Pura I (Persero) has prepared facilities to handle wide-bodied airplanes. From here, we hope that if the route has developed /great, this could be the next Transshipment location.

This is also in line with the policy conveyed by President Joko Widodo that later the International Gateway will be reset. This means that not all airports can handle international flights. For this, we are still waiting for the final news from the Ministry of Transportation. Once determined, of course there will be route adjustments from international airlines to enter Indonesia, only through certain airports.

CT: Is there any anticipation from APLog in line with the implementation of “New Normal” either internally or with customers / clients?

Danny : We have learned a lot during this pandemic, starting with the New Normal lifestyle by paying attention to health protocols for the prevention and transmission of covid-19. There have indeed been several updates to our SOP (Standard Operating Procedure) such as: how to interact with our customers, how to process internal business, handling goods and several others.

We have made lots of adjustments. One of them is by updating SOPs in our business units such as Cargo Terminals and Regulated Agents.

In the future we are also studying with the parent company, PT Angkasa Pura I (Persero) as an Airport Business Entity (BUBU) to make improvements in business processes. Especially at the Cargo Terminal so that everything is simpler and goes to cashless payment so that everything can be done digitally / electronically. There are some things that we have done together with the parent company, but overall this process is still ongoing and we will propose for rearrangement to make it simpler by paying attention to the rules and also taking into account the prevailing health protocols.

The key in logistics is don’t stop to learn. Because the market situation and customer behaviors are very dynamic. Logistics companies must of course be able to provide solutions to customers towards challenges in the market and must remain adaptable.

CT: Early in 2021, the Government will have plans to distribute the Covid-19 Vaccine. Will APLog also contribute to the logistics process?

Danny: We have indeed been involved in discussions on the readiness for the distribution of the Covid-19 vaccine and have some coordination with the government and related institutions to monitor the entry of vaccines and also their distributions. With the facilities and production equipment that we have, it allows us to take part in the distribution of this Covid-19 vaccine.

However, the delivery of this vaccine cannot be considered as a purely business, because this is part of our services as well as humanitarian aids. We have been registered by the Ministry of Transportation and also the BNPB to be able to help distribute the covid-19 vaccine. Plus we have several warehouses, cargo airplanes, and trucking fleets, which are ready to be used.

Indeed, it is currently in the stage of consolidation with other colleagues for capacities that are ready to be distributed. So when this vaccine comes in, we are ready. And in particular, we have prepared a Manado Branch Office as an entry port for the entry of the covid-19 vaccine. We are currently setting up the infrastructure at the branch, because this has to be handled specifically. And the point is we are ready and will take part in the process of distributing the covid-19 vaccine.

Author: dpar/mar
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