Courier service and logistics company Tiki Jalur Nugraha Ekakurir (JNE), for example, is preparing three innovations that utilize technology: It will establish an automated mega hub, develop blockchain technology to trace packages and run artificial intelligence-based delivery operations. The company said the changes could provide faster and more transparent services, thus embracing within the logistics business the fourth industrial revolution.

“In the logistics business, faster services and transparent information are highly essential for our customers. With the growing number of online transactions that entrust us with their delivery services, it is obvious that we need to improve our services by utilizing technology,” JNE director Chandra Ferita told a press conference recently.

JNE vice president of technology Arief Rahardjo said one of the most innovative steps forward for the company was the planned establishment of an automated mega hub, an automated sorting center that would increase JNE’s capacity in handling packages.

“In the future, delivery packages will be sorted automatically by machines in our hub, unlike today where sorting packages is still done manually,” he said on the same occasion, adding that, with faster sorting, the company could deliver packages faster, especially those purchased from e-commerce platforms.

The automated sorting center will adopt technology from China, where logistics players have implemented automation for package sorting. With the mega hub, which will be built near Soekarno-Hatta International Airport in Tangerang, Banten, the company estimated it would be able to accommodate 30 million package deliveries each month, up from its current capacity of around 20 million packages a month.

The company aims to complete the development of the mega hub by the end of 2019.

Aside from the mega hub, JNE is also set to adopt AI-based delivery operations that would run based on preexisting company data.

“We have huge data on the routes that our couriers always take every day and we have mapped it all out in our database. In the future, with AI technology, delivery routes and operations could be inputted automatically and we believe it would speed up our services,” he said.

JNE also seeks to utilize blockchain technology to prevent fraud.

Arief said blockchain technology, commonly used for financial services, could help JNE to validate items inside a package.

“JNE is frequently blamed for fraud committed by irresponsible online shops, such as fake products or empty packages. Hopefully, these cases will no longer happen with blockchain technology,” Arief said.

Currently, JNE serves approximately 20 million package deliveries every month. Package deliveries from purchases made through e-commerce platforms contribute to around 60 percent of JNE’s total package deliveries.

The need for logistics services to improve in terms of delivery capacity is driven by the boom in transactions made through e-commerce platforms.

The e-commerce transaction value in Indonesia reached US$35 billion in 2017, up from $25 billion in 2016, and is estimated to reach $130 billion in 2020, according to estimates from the Communications and Information Ministry.

JNE previously adopted cloud technology in order to improve its existing tracking feature.

The trace-and-tracking feature provided information to the customer but was limited, displaying only the status of a shipment — delivered, departed or processed.

“In the future, with our cooperation with [cloud computing provider] Oracle, information for customers will be more complete with information such as what time our courier will arrive and the current position of our couriers. Customers will get a notification about the package status through a JNE mobile app that we are now improving,” he said.

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