Despite being hit by COVID-19, the logistics industry has hope

The outbreak of the corona disease 2019 (COVID-19) has entered a new phase. The World Health Organization (WHO) has declared it a global pandemic. Indonesia also did the same thing by declaring it a national disaster.

The economy has clearly been hit hard by this pestilence. The tourism and hospitality businesses, for example, are the easiest examples you can imagine how devastated after the explosion of COVID-19 cases in the world. This is not much different from the logistics sector which is very close to the impact of the corona virus.

It should be remembered that China is global production hubs in the current economic era. The collapse of a large part of the Chinese economy has disrupted supply chains to its trading partners, including Indonesia. The effect spreads without knowing national borders.

Chinese Significance

The Bamboo Curtain country is an important trading partner for Indonesia. This can be seen from the value of trade transactions between the two countries which reached US$72,66 billion in 2018. This figure accounts for 20 percent of the total trade that occurs with all partners.

From this nominal, it is also known that import transactions from China touched US$45,54 billion. Many imported raw materials needed by domestic industries are imported from there.

Chairman of the Indonesian Logistics Association (ALI) Zaidy Ilham Masita said that imported faucets from China had fallen by 30 percent due to the corona pandemic. Shipping of goods by sea is very limited, while shipping by air has been banned since last January. Exports have the same fate. Shipping goods to China are increasingly sluggish at the moment.

"Our exports to China have also decreased, especially exports of perishable or fresh goods because China has closed imports of fresh food. So for exports and imports the impact is quite severe," said Zaidy to Dailysocial.

Logistics story

Crewdible is one of the startups affected by this disaster. Being in the field warehousing, they admit that their business has stalled. CEO Dhana Galindra calls productivity all seller they have decreased drastically since this epidemic broke out.

logically suffered a similar fate. Logisly's business, which bridges the needs of all types of freight trucks, is directly affected. CEO Roolin Njotosetiadi stressed that the sluggish import-export activity caused demand on their platform to drop. "Which Containers down," he added.

Zaidy Masita who is also COO paxel stated that the situation in the logistics landscape has worsened after several countries adopted policies lockdown. China, New Zealand, Poland, Denmark and Italy are examples of some countries that have locked themselves in their fight against the coronavirus.

The situation in China is in the main focus because they are like the epicenter of the global supply chain. Quoted from New York Times, the problem in China is not in the inventory. Ports and customs are said to have been running almost normally. The problem lies in the lack of trucks that come to deliver and pick up goods to the port. The government's decision to impose quarantine to lock down an area to reduce the spread of the corona virus had to be taken even though this meant eroding their economy.

Looking for hope

In this uncertain situation for the economy, logistics startups must rack their brains to find solutions to stay afloat. As a relatively new player, Logisly strives to continue to add shipper and Transportation new. This is necessary to make up for the lack of demand for trucks they offer on the platform.

Crewdible also took a similar way. The difference is that this online warehouse platform focuses more on certain types of products. "We are more focused on local goods and fresh products now because imported goods are sold out in the market," said Dhana.

Fresh produce seems to be excellent in times of crisis like this. Higher anticipation for activities outside the home causes the demand for fresh produce to increase. Besides Crewdible, this is also experienced by Paxel.

Zaldy said that since the corona virus has become a serious threat to the community, shopping centers and food shops operating are increasingly limited. Therefore, it is not surprising that the demand for food ingredients has increased sharply.

"For Paxel, because we focus on same day [delivery] between cities in Indonesia, even since the corona virus spread, our volume has increased by 40%. Food and perishable deliveries have increased sharply."

In addition, Zaldy is quite confident that Paxel's business model that relies on smart lockers like them can be a solution for delivering goods in situations like this. "Indeed, we experienced many disasters in Q1 2020 and logistics companies must be able to survive and changing its business processes by using more technology," concluded Zaldy.

Will stagnate

The country's logistics industry has experienced many disasters during the first quarter of this year. After their operations were repeatedly disrupted by floods during January and February, now the corona virus is their latest obstacle.

ALI, which previously targeted industrial growth in 12-14% with a contribution to gross domestic product (GDP) of Rp993,9 trillion, it is predicted to miss. According to Zaldy, logistics growth for this year will be stagnant compared to last year's 7-9%.

Until now, no one knows how long the corona epidemic will hit the world. While researchers are still struggling to find the right drug to fight this virus, the governments of each country are struggling to contain its spread. As of this writing, Covid-19 has caused 117 cases with 8 patients recovered, and 5 patients died in Indonesia. Meanwhile, the central government and a number of regions have advised residents to limit their activities at home to suppress the transmission of the virus.