Delivering the Goods
    Category: Companies & People By : Gloria Haraito Read : 2856 Date : Friday, January 16, 2015 - 16:23:53

    Ahmad Zamroni / Forbes Indonesia

    Better logistics is one of the most pressing needs of the country, and PT Tiki Jalur Nugraha Ekakurir (JNE) has a huge opportunity to help fulfill this demand. This year, the privately held JNE is planning to have revenues of Rp 3.9 trillion, an almost 60% increase from revenue from 2014.

    That’s a big jump for a company that is already the country’s second largest local courier company after state firm Pos Indonesia. The company now has 11,000 staff, supported by 5,000 agents throughout Indonesia and seven international partners. In 2014, the company delivered 8 million packages per month, a 33% increase from 2013.

    JNE’s backstory is complicated. It was started in 1990 by entrepreneur Soeprapto Suparno with 51% owned by the Soeprapto family and the rest by managers such as Johari Zein, a former operations manager at TNT Indonesia who is now the managing director of JNE. Previously, Soeprapto already founded another courier firm PT Citra Van Titipan Kilat (Tiki) in 1970. Though Soeprapto owns both Tiki and JNE, the two are different entities.

    JNE’s initial role was handling imports and doing customs clearance. To strengthen its international network, JNE created partnerships in Singapore, Malaysia, Japan, Hong Kong, Thailand and Philippines. When imported goods arrived, JNE would pass them to Tiki for domestic delivery.

    In 1995 JNE started to offer domestic delivery, making it a rival to its affiliated firm Tiki. In order not to be a direct competitor, JNE set its prices about 10% higher than Tiki’s as well as other steps to differentiate itself. In 2010, JNE expanded its business to logistics along with freight forwarding. To support this expansion, JNE has built two warehouses and improved its tracking system. Today, about 20% of its clients are corporate and 80% are retail customers.

    Johari sees a big future for JNE. “This year is going to be good, driven by increases in domestic consumption and e-commerce,” he says. The post and courier industry had revenues of Rp 21 trillion in 2013 and those should reach Rp 29 trillion by 2018, according to consultancy Euromonitor. Another driving factor should be the introduction of the ASEAN free market rules this year, encouraging more intra-ASEAN trade. Finally, the Indonesian government since 2009 has encouraged international operators to partner with local firms—for JNE, its partner became UPS.