In recent years, the logistics industry has encountered dynamic challenges, requiring adaptability and strategic agility, as exemplified by Ocean Sky Line (OS Line) in this narrative.
Since 2020, the world has witnessed a series of impactful events including a pandemic, soaring inflation rates, conflicts in Ukraine and Gaza, and natural disasters, all of which have disrupted global supply chains. Most recently, attacks on commercial shipping vessels in the Red Sea have led to a spike in worldwide cargo delivery costs. The ripple effects of these unprecedented global events continue to reverberate across industries and supply chains, resulting in delays, escalating freight expenses, sourcing difficulties, and labor shortages. These challenges have had a lasting impact on business operations, emphasizing the need for agility and preparedness to withstand shocks and mitigate disruptions.
Supplier networks have grown increasingly complex over time. The expansion of the global marketplace, evolving consumer demands, and the pursuit of cost efficiencies have contributed to the proliferation of supplier relationships. While a broader network offers opportunities, it also increases vulnerability to disruption from global events. Managing relationships and ensuring quality standards amid this complexity becomes progressively challenging.
This triggered rising inflation, fuel prices, labor costs, and interest rates, leading to increased expenses across the logistics industry. Additionally, warehouse space, equipment, and insurance costs are also on the rise. Conversely, global trade volume remained stagnant, while freight rates, which were exceptional in the previous year of 2022, experienced a significant decline. Overall, this situation has reverted shipping and logistics back to pre-pandemic conditions. In comparison to the exceptional year of 2022, the performance of the shipping and logistics industry in 2023 declined significantly. Many companies failed to meet their yearly targets, with year-on-year performance dropping by over half.
In a discussion with the Indonesia Shipping Gazette, Indra Gunawan, Director of Ocean Sky Line (OS Line), one of Indonesia’s leading consolidators, acknowledged that these challenges have shaped the logistics business in recent years. However, he regarded them as inherent characteristics of the logistics industry, stating that logistics is always dynamic.
“It is true. Those factors have impacted how this industry (logistics and supply chain business) has operated in recent years and will continue to do so in the future. Challenges will always accompany opportunities. Therefore, appropriate strategies are needed to optimize these opportunities,” he said.
“That is what we have done with our company. Despite facing numerous challenges, we still experienced positive growth,” he added, mentioning that OS Line achieved positive growth last year (2023).
“Alhamdulillah (Thanks be to God), we still experienced positive growth within this challenging year,” said Indra.
Approaching its 6th anniversary in 2024, OS Line has continued to enjoy remarkable growth. This has prompted the company, under the umbrella of PT Bintang Samudera Angkasa, to maintain its focus on consolidating cargoes and expanding by adding new ports of loading and broadening its network with new agents globally.
OS Line, a freight forwarder specializing in direct console business for both export and import, achieved notable growth in volume and financial performance this year. It experienced a significant increase in handled boxes, with a remarkable year-on-year growth of over 50%. The majority of containers it handled were LCL (less than container load). “This is in line with our vision to be a leading consolidator. This year, we focused on handling console cargoes,” said Indra, adding that OS Line will continue to expand its console business as its core focus in the coming years.
This substantial volume growth has enabled OS Line to maintain positive growth in net profit. “We enjoyed a 13% net profit growth compared to 2022,” said Indra, mentioning that OS Line also surpassed its yearly target sales. Throughout the year, its total sales reached Rp75 billion, exceeding the target of Rp 72 billion.
Adding Ports of Loading and Expanding Agent Network
During 2023, OS Line added several ports of loading in various countries and expanded its network by establishing cooperation and partnerships with new agents worldwide. These initiatives significantly contributed to OS Line’s volume growth. “Certainly, our new ports of loading for both import and export, as well as our new agents, have played a significant role in our volume increase,” he said.
For 2024, OS Line plans to add 4-5 ports of loading, including Australia, Barcelona (Spain), the USA, and Felixstowe Port and South Hampton (England), aiming to increase its import volume. “We expect Barcelona to serve as our new port of unloading, in addition to Hong Kong. This is intended to boost our export volume,” he explained.
To achieve its export-import volume targets, both LCL and FCL, OS Line is also looking to increase partnerships and cooperation with new agents worldwide. “Currently, we partner with agents primarily in China, Hong Kong, and Singapore. This year, our goal is to expand our network within these areas while simultaneously establishing partnerships with agents in other countries worldwide, such as the USA, Europe, and Australia,” explained Indra.
“Hopefully, these new agents and additional ports of loading will help us achieve our 10% growth target for next year,” he added.
Fast, Flexible, Future
Indra emphasized that OS Line’s focus in business operations is on meeting customer demands. Therefore, OS Line has adopted the tagline: “Fast, Flexible, and Future”.
“OS Line aims to provide fast service to customers. We also prioritize flexibility, offering more choices and enabling quick and immediate responses to arising situations. Simultaneously, we focus on understanding our customers’ future business needs and aligning with their future plans,” said Indra.
In line with this tagline and to support future business expansion while enhancing services to customers, OS Line will soon implement several planned programs.
“We will establish our owned customs clearance division, obtain ISO certification for our management system, and become a member of IATA (International Air Transport Association),” said Indra.
This article was published in ISG Print Magazine March 2024 Edition.
