Kargo is an on-demand startup that seeks to democratize Indonesia’s inter-city logistics landscape by feeding deliveries to idle drivers in the area with a truck and time on their hands. It identifies inefficient transportation routes that can in turn be optimized.
By doing this, Kargo helps suppliers maximize their capacity. The company sees the process through from end to end, also helping with insurance and vendor payments.
CEO Yodi Aditya said, his firm’s main goal for the future is to construct “chainable logistics operations”, by connecting all logistics companies in the archipelago in one online ecosystem.
“Our online dashboard makes delivery activities simple and easy – including booking, shipment tracking, insurance, payment and vendor management. We enable business to reduce logistics cost and increase productivity,” Aditya said in a statement.
Logistics have been one of Indonesia’s main hurdles when it comes to business and growth.
Currently, the cost of logistics in the archipelago stands at a whopping 24 per cent of the country’s overall GDP, about 2.5 times higher than logistics cost in Singapore. A World Bank report said that bringing the figure down to 16 per cent — like in Thailand — would mean enormous savings of some $80 billion a year.
President Joko ‘Jokowi’ Widodo realizes this and has vowed to make the case in his top priority. He has called for local companies to find innovative ways to lower the average dwell time of shipments in the nation’s ports.
“Dwell time is inevitable for logistics company and bring up the cost. Kargo technology help the company reduce cost by maximize truck utilization and increase their services quality. Efficiency will bring domino effect in this logistics chain,” said Aditya.
Indonesia’s logistics industry is expected to move forward in line with the country’s fast growth. Boston Consulting Group (BCG) revealed that the sector has been recording strong double digit growth in the past few years, and will continue to do so on the back of increased domestic consumption, higher trade, lower external financing costs, and more infrastructure development.
The domestic market size for logistics as a whole in Indonesia is estimated at S$163.4 billion and still growing.
E-payments, logistics, and infrastructure are often cited as the three main spaces that need to be improved upon before many modern business models in Indonesia (like e-commerce, for example) can see significant growth – similar to markets like the United States, China, and India.
Furthermore, BCG says that the ASEAN Economic Community could soon pose interesting problems and opportunities for Indonesian businesses. Much work still needs to be done to improve international connectivity and the country’s export competitiveness. For this reason, it is important for Indonesia’s logistics sector to start adopting a more integrated approach that ensures efficiencies across the entire supply chain.
“AEC will significantly increases the intensity of goods and commodity’s flow in the region. It will also impose a great challenge because for a very long time, the country’s logistics sector has been inefficient with no one disrupting the market,” said Wilson Cuaca, managing partner of East Ventures.
“But we believe the technology Kargo develops will empower Indonesia’s competitiveness for domestic and international trade,” he added.