JNE president director Mohammad Feriadi said with the mega logistics hub, JNE would be able to accommodate the delivery of 30 million packages a month — equal to 1 million packages a day — nearly doubling the company’s existing delivery capacity of 19 million packages a month, or more than 600,000 packages a day, during the first half of this year.

The retail and e-commerce sectors account for 80 percent of JNE’s courier and logistics services.

He said package delivery services in Indonesia had grown sharply over the past few years amid a surge in the e-commerce business. JNE consistently recorded around 30 to 40 percent annual growth since 2010 thanks to the rising popularity of e-commerce, Feriadi said.

The Communications and Information Ministry estimated that the e-commerce transaction value in Indonesia reached a total of US$35 billion in 2017 from $25 billion 2016. The transaction value is estimated to further increase to $130 billion in 2020.

The 3.9-hectare logistics hub will be built near Soekarno-Hatta International Airport in Tangerang, Banten, with an initial investment of about Rp 500 billion ($34.7 million). The groundbreaking of the project development will be conducted at the end of 2018, while the project is scheduled to be completed at the end of 2019.

Feriadi said the location of the new hub had been chosen in or around Jakarta because the capital city remained the company’s largest market in the country.

As an early step of the project development, JNE signed a contract on Tuesday with Shanghai-based manufacturer of operational supporting tools for logistics and supply chain Damon Group to purchase a type of sortation conveyor called an automation cross belt sorter machine.

Damon Group was chosen because the company is known as a prominent manufacturer of sorting machines and already has a good reputation worldwide, as stated by JNE head of marketing communications Mayland Hendar Prasetyo.

He added that with the new sorting machine utilization and process improvement in the mega hub, the distribution process of inbound and outbound goods could be trimmed by up to three hours.

“Therefore, it is possible that a next-day delivery can be shifted to same-day delivery,” Hendar said.

Speaking at the same occasion, Damon Group founder and president director Harry Zhou thanked JNE for the cooperation, and he believed Damon Group’s involvement would help the project succeed.

“Based on our knowledge and experience in China as well as the overseas market, we’re confident that we can help the JNE mega hub become a benchmark project in Indonesia,” he said.

JNE was established in 1990 and has served up to 250 countries through more than 6,000 outlets across the nation.

Damon Group was established in 1997. It has served various companies located in the United States, Europe and the Asia-Pacific region. (sau)

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