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Ramadan & Raya 2020: eCommerce Logistics and Last Mile Challenges in Indonesia

Benedict Leong

Ramadan & Raya 2020: eCommerce Logistics and Last Mile Challenges in Indonesia

This is part of our Southeast Asia Ramadan series, where we look into overcoming potential last-mile issues that could arise during Ramadan. Our earlier articles covered eCommerce insights for Indonesia, Malaysia, and Singapore, too. For all of these in one convenient package, check out our SEA Ramadan Guide 2020!

 

In our earlier article on what Indonesians usually buy during Ramadan, we mentioned that working hours and fasting could change the way people work and their productivity in our article on what Indonesians are buying online during Ramadan 2020. But how does this impact the second part of the online shopping experience, the delivery?

During the Ramadan period in Indonesia, there are a couple of changes that need to be taken into account during the Ramadan period leading up to Hari Raya Idul Fitri, as well as during the Lebaran period – which is the holiday period starting with Hari Raya Idul Fitri itself. But first, it’s good to get an overview of how parcels reach customers in Indonesia, such as one within the Jabodetabek area and one outside it.

The Java island is home to the Jakarta Metropolitan area, better known as Jabodetabek. Jabodetabek consists of Jakarta, Bogor, Depok, Tangerang, and Bekasi areas and features some of the highest eCommerce adoption in Indonesia. It consists of the capital of Jakarta, four satellite cities and five regencies.

Overview of how international delivery and last mile delivery works in Jabodetabek

If you’re an overseas seller delivering a parcel to an online shopper situated in the Jabodetabek region, it first needs to clear customs at the vicinity of Soekarno – Hatta Airport (CGK) near Jakarta. After that, it gets sorted at a warehouse so that it’s placed on the right vehicle for last mile delivery to your customers. Since in this example the customer is in the Jabodetabek region, the parcel can be transported by van or motorcycle.

The story changes if your customer isn’t that close to an international airport. As Indonesia is an archipelago that’s made up of 17,508 islands, some parcels will need domestic flights to airports closer to your customers’ addresses before they can be delivered by van or motorcycle to complete the parcel delivery. That being said, delivery times can vary quite a fair bit depending on your logistics partners’ coverage and expertise in different areas within Indonesia. To get a deeper breakdown of all the stages of the shipping process, do check out our B2C guide to shipping to Southeast Asia. Do note that this example is based on the assumption that movement isn’t restricted due to COVID-19 in Indonesia.

Looking to ship your products and ride on the Ramadan & Raya festivities? Janio can get your eCommerce products into Indonesia fuss free! Contact us to get started.

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With that background, we can cover some of the delivery challenges that could arise during the Ramadan period.

Challenges Faced During the Ramadan Period

Indonesia Ramadan 2020 - What eCommerce logistics challenges happen during Ramadan - shorter working hours and breaking fast jam

During Ramadan, Indonesians change their lifestyles: they wake up early in the morning for sahur, the meal that is eaten around 4 – 5 am before they begin their day’s fasting. Work timings are adjusted to start at 8 am and most workers end their work days at 4.30 pm. Government workers end work earlier at 3 pm.

For deliveries, this brings up the challenge of shorter working hours, as workers need to take breaks in the evening to break their fast. There are also increased traffic jams from 4 pm to 7 pm as rush hour is pushed forward due to work days ending earlier posing another challenge.

Solutions

To overcome this, you can check with your last mile service provider if they have standard operating procedures in place to ensure that service-level agreements can continue to be met. According to Janio’s Indonesia Operations Manager Bayu Kurniawan, “During Ramadan, we have more manpower during this period and work shifts. This lets us maintain our service-level agreements and keep our deliveries on track.”

If your Indonesian logistics service provider is experienced, they will be adding delivery and manpower during the Ramadan period to offset worker fatigue. The increased manpower will usually be working in shifts to maintain delivery timings. However, workers will still need to spend one hour in the evening to break their fasts. If this is done correctly, most deliveries should be able to meet agreed service-level-agreements up until Hari Raya Idul Fitri period, where deliveries stop for the public holiday.

However, it’s vital to note that the Ramadan traffic jams around 4 pm to 7 pm could still cause delays, so it’ll be good to communicate this to your customers at checkout. You can check with your service providers if lead times change by destination in Indonesia. As shown above, deliveries outside city centres could take longer. One rule of thumb you can use for adding lead time is +1 day for major cities and +2 or 3 days for other cities.

Challenges Faced During Hari Raya Idul Fitri and Lebaran

Ramadan 2020 What eCommerce Logistics Challenges Should You Look Out for During Lebaran - Mudik traffic jam, heavy vehicle restrictions and deliveries stopping for the public holiday

Similar to Lunar New Year in countries like China, many Indonesians travel to their hometowns to celebrate Hari Raya Idul Fitri with their loved ones. Locally in Indonesia, this is called Mudik. What this means is that there will be massive traffic jams as Indonesians all return to their hometowns all over Indonesia in the week before Hari Raya begins.

Deliveries during the Mudik period can be challenging. Adding on to this, the government restricts heavy vehicles (10 tonnes and above) from using roads during the Mudik period as well to reduce the likelihood of traffic accidents. This means that if the delivery vehicles carrying your parcels are above this weight limit, deliveries could be hampered during this period. This restriction period lasts 5 days before and after Hari Raya.

This isn’t limited to local traffic too, there will also be an influx of Indonesians returning to their country from overseas. These returning family members usually bring gifts for their families back home too. As airlines need to prioritise passengers’  luggage, this results in less cargo space for parcels.

Another thing to note is that Hari Raya Idul Fitri and its holiday period is a public holiday, with many workers celebrating with their families back at home. Deliveries won’t be taking place during the public holiday period.

Solutions

The heavy vehicle restriction doesn’t necessarily apply to all delivery vehicles. Some delivery vehicles in Indonesia like delivery motorcycles remain unaffected. You can check with your logistics service provider if this restriction applies to them.

Mudik traffic jams are not so easy to deal with, however. Ideally, deliveries should avoid being too close to the Hari Raya Idul Fitri date considering the Mudik traffic snarl. A one week buffer is recommended.

As an example, take the delivery of an item to Jayapura, with an example lead time of 10 days. This year, Hari Raya Idul Fitri is on Sunday, 24th May to Monday, 25th May, so the item should ideally arrive on May 18th to have enough time for first and second delivery attempts. The order should be placed on May 8th to avoid traffic-related delays. Providing a one week buffer goes as well for stocking up any local warehouses you may have while also being able to beat the heavy vehicle restriction during Mudik.

Regarding when deliveries stop, you can also check with your logistics service provider when deliveries will stop taking place and plan accordingly.

Considering the rise in eCommerce orders during Ramadan in Indonesia, having a great eCommerce delivery experience is paramount to doing well during this period. Apart from parcels arriving at the stated time, being able to choose cash on delivery as a payment method is still an important factor for many Indonesians’ purchase decisions.

Barring any sudden changes due to COVID-19, the majority of the challenges listed here are dealt with every year by experienced logistics service providers. Look out for an international logistics service provider who has plenty of local experience and expertise in Indonesia and can help you facilitate cash-on-delivery payments to give your Indonesian shoppers the best Ramadan shopping experience.

If you’d like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, come and have a conversation with us.

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Want to learn more about Southeast Asia’s Ramadan opportunities? Check out our series below:

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