Lion Parcel president director Farian Kirana said rail-based transportation was an alternative to optimize business amid the increasing demand for courier services and the rising price of air cargo, adding that delivering parcels by rail would give the company a wider reach. 

“In the past, to deliver parcels to Purwokerto [Central Java], for example, we had to fly from Jakarta to Yogyakarta first, before carrying the parcel from Yogyakarta by car to Purwokerto. Meanwhile, by train, we can deliver it directly from Jakarta to Purwokerto.” 

In the past, Farian added, delivering parcels to cities like Bojonegoro in East Java from Jakarta was expensive and took longer as Lion Parcel had to fly from Jakarta to Surabaya first, before delivering it to Bojonegoro by car, and the process could take up to two days.

“By rail, it would be faster and cheaper. It will be much more efficient than using planes, especially to reach small cities.”

In terms of cost, delivering parcels by train would definitely be cheaper and it could reduce courier costs by 40 to 50 percent, said Farian.

To meet this goal, Lion Parcel has signed a memorandum of understanding (MoU) with Kereta Api Logistics (Kalog), a subsidiary of state-owned railway operator Kereta Api Indonesia (KAI). Under the agreement, Kalog will give cargo space to Lion Parcel, with prices that will be adjusted and agreed upon by both parties. 

Farian said the partnership would also enrich Lion Parcel’s distribution channel.

Kalog’s acting president director, Junaidi Nasution, said the partnership would definitely be beneficial for both parties. 

With Kalog’s distribution networks, it could give Lion Parcel a wider reach, especially in Java. At the same time, the partnership could also increase Kalog’s load capacity.  

“Currently, we have 75 outlets that are situated at train stations [mostly in Java]. For example, we have outlets in Purwokerto and Kroya [both in Central Java], places where planes cannot land. We also plan to open and develop [outlets] outside Java such as Sumatra, Kalimantan, Sulawesi and Denpasar [Bali],” Junaidi said, adding that Lion Parcel could potentially contribute 2,000 to 10,0000 tons to Kalog's load every day. It currently has 370,000 tons of daily load capacity. 

Currently, Lion Parcel still relies on air transportation for its courier service with 90 percent of deliveries being delivered by air and 10 percent by land transportation. However, with the cooperation with Kalog, the company expects to change it to 50 percent by air and 40 percent by land transportation in this year.

Farian said Lion Parcel had seen an increase in demand in line with the e-commerce boom across Indonesia. Last year, it delivered up to 2 million kilograms of parcels each month.

The company aims to deliver four to five times more parcels this year compared to last year. For its courier service, Lion Parcel uses Lion Air passenger planes, which fly to more than 26 destinations across Indonesia.