The Challenges of Last Mile Delivery for Indonesia Ecommerce Players

So many retailers that go online don’t expect there will be huge complexities in the back online front store. As ecommerce in Indonesia grow, last 2014 reached US $1.12 billion for B2C online sales, no doubt there’s big potential online customer growth that will easily jump into online stores and order simply as their fingertips pointed. When payment is settled, most people don’t imagine what happens after that, until customer got what their wants. Right expected product with right expected delivery time.

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When we talk about global brand retailer that has thousand SKUs of products, tens of branch stores, and huge loyal customers, there are tons to do simultaneously in store operational and last mile delivery back in the online store. Last mile delivery is the final leg of the supply chain. It is the moment when customer finally receives their order. And as generally, it’s the most expensive, least efficient and most problematic part of the overall delivery process.

In Indonesia, last mile deliveries have unique set of challenges. Since we have thousand islands here, with so many rural area, not to mention about unclear addresses and location setting, mostly retailers come down to cost issues, and retailer’s desire to control the final moment with brand interaction.

There are a few main categories for last mile deliveries. In parcel delivery we have 3 to 5 well-known delivery companies that focusing in this area. The companies are delivering thousands and thousands of packages daily from retailers around Indonesia to customer’s front doors and offices. The shipping rates have gone up recently and delivery companies provide little control over the last mile for retailers.

An alternative to solve these challenges is engaging right outsource that understand ecommerce logistic to provide great last mile delivery specifically, in Indonesia. Most time, they’re called as ecommerce enabler and fulfillment, that is not only focusing on ecommerce site development but also do the back operational include last mile delivery. Different from delivery company, ecommerce enabler and fulfillment also manage correctly the order management that connect to store operational and control last mile delivery. At one integration, they manage the pick-pack-deliver which will go efficiently and on time, as well as providing real time status both for customer and the internal store. The cost is relatively less efficient since the effort of all ship in one full system integration for order submission.

Written by: Afril Wibisono

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