by Yukki Nugrahawan Hanafi, Chairman of ALFI/ILFA

There are at least two main reasons why logistics players to adapt with changes in running their business, the changes to digitalization. First is the trade digitalization and second is relating to the consumer behaviour. If they can’t and don't want to adapt, they will no longer survive, according to Yukki Nugrahawan Hanafi, Chairman of Indonesia Logistics and Forwarders’ Association (ALFI/ILFA).

"Nowadays, the pattern of business and trade has also changed, even the industry has also made various changes because they do not only look at the logistics aspects but further to the supply chain," said Yukki.

Therefore, Yukki added, the digital transformation carried out by the logistics sector is a must and is considered to be a catalyst to be able to survive, thus being able to do various expansions, amid the Covid-19 pandemic outbreak in particular

“Those (logistics companies) that don't want to make changes probably will not survive any longer. Moreover, the business opportunities for express and e-commerce companies are increasingly promising in line with the rise of online shopping activities during this pandemic," he explained.

As Chairman of ALFI, Yukki said, he had reminded all members relating the impact of this Covid 19 pandemic to any sector including logistics industry. In fact, the logistics sector in the midst of a pandemic has become the backbone for other sectors that require the distribution of goods.

Changes in business and trade patterns, said Yukki, are also influenced by the characteristics of the development of the community, starting from the previous generation to the current generation.

Even, the trading activities which covers activities of selling goods and offering services directly to end consumers or retailers, have also experienced a quite massive shift, namely from what was previously in the form of traditional retail to modern retail and then continues to move into small retail and even today tends to be dominated by online retail.

Yukki names some examples. The Covid-19 Pandemic, which came in parallel with digitalization in various sectors, has also tended to have an impact on changes in work, study and play (eSports) activities. In addition, it has an effect on household shopping activities such as online shopping increasing by 37%, reducing activities outside the home (57%), and working from home (WFH) increasing by 41% from the previous year. Besides that, it also has an impact on increasing the use of social media activities.

Yukki explained that the estimated value of digital (virtual) transactions in 2025 would grow 5-10% from the pre-Covid-19 estimate of only 57% and the post-Covid-19 estimate reaching 67%.

Based on data from the Ministry of Trade, Indonesia's trade balance experienced a surplus of USD 30.81 billion in the January-October 2021 period. One of the factors that created the surplus was the development of the digital economy and e-commerce in Indonesia which was increasing rapidly, with an estimated growth year 2021 to reach IDR 337 trillion.

"Therefore, the logistics supply chain digitization program is very important to support the recovery and growth of the national economy. National logistics companies also need to upgrade, to digitalization," said Yukki.