Expediting business is a business in the service sector that serves the delivery of goods from one region to another, both within and outside the country. This business generally provides shipping services by land, air, and sea. The need for expedition services is increasing with the need to shop and buy goods online. This trend is now popular, especially when the pandemic hit. Not surprisingly, in the midst of a situation full of uncertainties, the expedition business is actually increasing. This business is also one that can last a long time. This is because the need for goods delivery will continue to exist, even increasing at certain moments such as holidays.

One of our Advisors for the expedition industry share insights on the industry’s operations and its future. Keep on reading to know more from our expert network Indonesia!

How does the expedition business expand, and does the downsizing affect it?

Mr. YA shared that the company he’s working for presently is currently expanding to widen the scope to cover every island in Indonesia. He added that during normal days his company can deliver up to 35-40% of 2-2.5 millions orders per day nationwide. This number can multiply during campaign days—such as the 12/12 event—to around 6-7 million orders per day. He talked about how employee discharges impact the day-to-day operation: everything must be done in a more efficient, effective, and productive way; targets are raised; and manpower in the field is reduced. There are supplementary divisions of which the number of employees are cut down, but not the core part of the business. Mr. YA concluded that despite the employee downsizing, the overall profit is still increasing due to the company expanding rapidly.

How do you adjust the capacity from normal days to campaign days?

Mr. YA explained that the target for normal days and campaign days differ, and that the couriers or operators in every hub already master the adjustment between them. For example, a courier who is assigned 160 packages per normal day has to be able to deliver 250 packages during campaign days. As campaign day happens every month, the couriers are used to the change in volume increase.

Besides dedicated couriers, there are partnered couriers who help with the delivery during campaign days. Partnered couriers are not employed often during normal days, but they are still maintained for campaign days. By the time campaign days roll around, every single courier is set in motion, either dedicated or partnered, so that the target that has been previously projected can be achieved.

Mr. YA added that during campaign days, the goods can't be contained to only one hub due to the large surge of orders. To fix this problem, there are virtual hubs in several spots that have a high number of orders.

How exactly do virtual hubs work?

Mr. YA elaborated that the goods in a main hub are directed to several virtual hubs. The couriers then don’t need to go to the main hub to retrieve the goods—rather than departing from their area of coverage to the main hub which can be far away, they can retrieve the necessary goods by going to the virtual hubs which are only 500 meters to 1 km away in distance from their area. Due to the shorter distance, the couriers are able to deliver the goods to the customers faster.

Virtual hubs can be in the form of shophouses that are rented per week when needed, especially during campaign days. The main operation is still at the main hub; the virtual hubs exist as a place for transit or drop off.

How will the expedition industry become in the future?

In Mr. YA’s opinion, the industry will still be growing. The orders from campaign to campaign are rising significantly, with the 12/12 event in 2022 having the largest number projection. Mr. YA predicted that in 2023 the volume will become even bigger than before, and that the industry will still be sustainable in the future.

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About Mr. YA:

Mr. YA has been working for his current company in his current role for more than two years. Since 2020, Mr. YA holds responsibilities that can be divided into three segments. The first segment is called “First Mile”, in which Mr. YA has to make sure that products ordered and requested by sellers are all picked up successfully, making sure that all orders reach their destinations on time. “Sortation” demands Mr. YA to sort products according to the area, calculating the time from receiving the order until sending them to Last Mile. Lastly, Mr. YA handles the “Last Mile”, in which Mr. YA has to monitor the number of products that are going to be sent to each area. Aside from the three main responsibilities, Mr. YA also has to understand and handle the end-to-end operation process, especially in his area.

Consulting with Mr. YA will give you pivotal insight into the overall logistics operations in Indonesia, its customs, rules, and tips on how to make the operations executed more efficiently.