After the pandemic slumped (2021) and entered the economic recovery period (2022), almost all businesses with their strategies are trying to rise. As a result, most business sectors can grow and generate profits, especially the logistics business.
This is similar to what has been done by one of the railroad-based logistics companies, PT Kereta Api Logistik (KAI Logistik), which continues to improve its performance in achieving business targets.
In realizing this performance, KAI Logistics launched several strategies, such as the company’s new tagline, “ISPOSSIBLE”, and other breakthroughs to provide service convenience and a “customer experience” with added value.
To update the latest progress of PT Kereta Api Indonesia (KAI) ‘s subordinate’s company, which will be 14 years old. Again, Indonesia Shipping Gazette (ISG) had a special moment to interview TLN. Ahmad Malik Syah (Mr. Malik), the President Director of PT Kereta Api Logistik. Below are our interviews:
ISG: What are the entrepreneurs’ advantages when they use the KAI Logistik service compared to other logistics services?
Mr. Malik: The advantages of using train-based logistics are:
- The transport capacity of a train is bigger than a truck. For example, one train series can transport up to 1,200 tons or equal to 60 trucks.
- Having a special lane, namely rail, to avoid creating a traffic jam.
- More punctual due to scheduled operations.
- Environmentally Friendly, less pollution.
- Free from illegal fees as trains have stations to stop as scheduled. They cannot stop without notice unless there’s a special case.
KAI Logistik, established on 8 September 2009 and continually growing annually, currently serves logistics of various commodities with 13 train sets for transportation, containers, or bulks.
ISG: To date, many entrepreneurs have calculated and assumed that the transportation costs by train are high. Is there a solution?
Mr. Malik: Logistics goods transport by railway hasn’t been a choice. Entrepreneurs prefer land transportation. This becomes a challenge and an opportunity for Logistics train. This a challenge because entrepreneurs can deliver goods cheaper by truck because the cargo is full. When you use a train, the cargo should match. By truck, there’s a potency to transport more, which may cause overload or over dimension, namely “ODOL” (Over Dimension, Over Load). The traffic regulation has been issued—transportation Laws or other regulations that forbid the condition. If the situation continues, ODOL may cause congestion and damage highway facilities.
Opportunity for KAI Logistik, if regulations related to ODOL are implemented strictly, as a result, many entrepreneurs will consider switching to the railroad mode as the mode of delivering their goods.
KAI Logistik continues to collaborate and partner with many other trucking and logistics companies (State-owned Corporate, national, and foreign). Examples include CMA CGM, DB Schenker, and others who use the logistics services offered by KAI Logistik.
ISG: How many tons of volume of cargo in 2022 in each business unit?
Mr. Malik: The total transport volume in 2022 reached 18 million tonnes. The largest is coal transportation; it reached 12 million tonnes/year, especially in South Sumatra. Transportation is operated by KAI, and KAI Logistik carries out loading/unloading.
Container about 100,000 tons, BHP Express Courier around 46 thousand tons. Special containers for manufactured goods (e.g., Nestle, Heinz ABC) are around 1.5 million tons. Waste is still tiny in volume.
ISG: What was the company’s achievement before the pandemic and after Covid was declared down (mid-2022)? What’s the percentage of the 2023 revenue target compared to 2022?
Mr. Malik: KAI Logistik’s performance in 2021, the audited revenue was IDR 998 billion with IDR 95 billion profit. In 2022, the revenue reached IDR 1.16 trillion with IDR 100 billion profit.
The gain in 2022 reached 97% higher than the revenue in 2019 (before Covid), which reached IDR 1.49 trillion with IDR 88 billion profit.
For information, Revenue and Profits, which grew during the pandemic, were achieved by KAI Logistik without reducing efficiency in salaries or the number of employees. The hope for the 2023 revenue target is IDR 1,265 T or a growth of 25% compared to 2022. Meanwhile, the expected profit can grow by 27%.
If the 2023 target is achieved, the company’s performance before COVID-19 has been achieved.
ISG: How many hubs/transhipments have been developed by KAI Logistik in Java Island?
Mr. Malik: For train services, currently, KAI Logistik has one hub in Klari, Karawang Regency, West Java. The location of the Station is 1.5 km from the Cikampek toll exit. The land area of 3 ha for containers and other cargo from and to JICT, Kalimas, and Krenceng (Ciwandan). In 2023, it will be developed for Warehousing development. On Sumatra or other islands, there is no KAI Logistik hub yet.
ISG: How about the development of express couriers (KALOG Express)?
Mr. Malik: For the KALOG Express service, to date, there have been eight branch offices on the islands of Java, Bali, and Sumatra, with 166 service points. The plan for the future will be developed as far as Sulawesi and Kalimantan.
In May 2021, KAI Logistik got a permit from the Indonesian Republic Transportation Ministry to reposition with the change of business license from transportation management services to becoming a Multimodal Transportation Business Entity.
In line with the range expansion and business permits, in February 2022, KAI Logistik performed service improvement by implementing a multimodal distribution pattern, nevertheless not limited to training. This provides more convenience in giving services to the needs of cross-island shipping and improves services, especially for the coverage areas.
Therefore, customers who want to deliver to Papua may use KAI Logistik since it uses multimodal transportation without limitation to train use.
Another service improvement in express business is developing a digital application named KAI Logistik TRAX in May. The application has been developed for around one year and is specialized for less than 10 kg delivery. The digital service is limited to 6 big cities in Java: Jakarta, Bandung, Jogja, Solo, Semarang, and Surabaya.
To us, innovation doesn’t have to wait until it’s “Perfect”. It should be tried/tested first to the customers, and at the same time, we continue to polish while making adaptations that suit increasingly diverse customers’ needs.
ISG: What efforts does KAI Logistik make to detect illegal goods delivery?
Mr. Malik: For express services, especially, we haven’t applied X-ray checks yet; besides, we also follow the rules where an express company seldom opens a package unless there’s a special case. An X-ray machine is costly and may affect the logistics cost, so KAI Logistik provides a form to be filled with ID and goods manifest.
Therefore, KAI Logistik filters it by filling out a completed form, especially the address and phone numbers of the consignor and consignee, as well as some information and description of package contents. However, from 2022 to date, there have been no criminal cases of illegal packages, either Dangerous Goods or Narcotics (drugs).
ISG: How is the development of the Port Railroad service? Or is there any development of an Airport Freight Train service?
Mr. Malik: This service is in collaboration with Jababeka for the management of the inland port at Cikarang Dry Port (CDP), Cikarang, and also in cooperation with the Jakarta International Container Terminal (JICT), Tanjung Priok, Jakarta. Currently, we implement the JICT – CDP relationship with two train series per day.
The development of an Airport Freight Train differs from the commercial airport train that has operated in some locations. The development of the Airport Freight Train is still under discussion because there’s a separate administration calculation and some issues that should be considered, which would take some time.
ISG: Does the waste train still operate? How’s the progress?
Mr. Malik: The waste train still operates, yet the volume hasn’t been maximum since not many companies are interested in using its service, or there is still a lack of awareness in the disposal of production process waste that can pollute the environment.
Specifically for waste, KAI Logistik has served a customer of an industrial waste management company, PT Prasadha Pamunah Limbah Industri (PPLI) in Nambo, Bogor Regency, West Java.
PPLI, a Foreign Investment with State-owned Corporate shares (10%) and Japan (90%), is entrusted with managing waste from East Indonesia (Papua and West Nusa Tenggara). The waste is transported by ship to Java Island, arriving at Kalimas, Surabaya, by trucking to the train station.
For the record, all transportation companies that transport waste, including KAI Logistik, must hold a Permit issued by the Ministry of Environment and Forestry (LHK), and the Ministry of Transportation issues the operational permit.
For information, the Ministry of LHK has a FESTRONIK system (Electronic Manifest), which is an application for monitoring the management of waste transportation, such as trucking, ships, and trains. The aim is to detect the destination location without causing environmental pollution (zero accidents).
For example, they are monitoring the shipments of 1,000 tons of waste. From Papua by ship to Surabaya shall be 1,000 tons, and once it reaches the waste management location in Bogor, the volume shall still be 1,000 tons. The volume can’t be less.
PPLI customers have been comfortable with KAI Logistik service, as it has not only had experiences but the train has also been scheduled. It has no obstacles due to the special rail line.
With the current existing portfolio, in 2023, the service of waste train has big potency for KAI Logistik.
ISG: The challenge of rail-based goods transportation is door-to-door service. What is the solution?
Mr. Malik: Customers can choose how to deliver their goods, and KAI Logistik offers services with various delivery schemes, including station-to-station, Door to Station, Station to Door, and Door to Door. Especially for express goods, KAI Logistics has added a way to deliver goods for customers through the KAI Logistik TRAX application.
For example, delivering factory products from Jakarta to Surabaya. The packages will be picked up from the factory and transported by train to the destination station. Then, they will be doored to the factory’s warehouse.
In the delivery process, there is a collaboration with trucking companies. So, not only competing with other land transportation but also embracing collaboration.
ISG: What are KAI Logistik’s hopes and plans in the years ahead?
Mr. Malik: 1. Continue to provide the best service to customers, especially with the added value of the KAI Logistik TRAX application, which makes it easier for customers.
2. Regeneration through screening the millennial generation as many human resources (HR) have entered retirement. Additionally, increasing HR competition through in-house training, inviting logistics experts/practitioners, and other training. With the hope that in the future, around 46% of the millennial generation at KAI Logistik can sustain the company’s performance in providing good services to customers for the company’s sustainability.
3. Logistics is interesting and challenging. In discussion with the national supply chain experts, they said the national logistics revenue from trains is by only 2%. It is because a train operates entirely in Java and Sumatra only. We assumed if the potency in the southern Sumatra to Lampung is dug maximally, the revenue won’t be only 2%, but it can reach beyond that number. If we total the volume, the transport by train around the regions could reach 45 million tons, especially coal transport from the State-owned Corporate or private companies. Meanwhile, in Java island, train competes with trucking companies.
4. I Hope the government can tighten the regulation, especially for ODOL. There are many cases caused by ODOL, such as congestion and accidents that create costs for other road users. Moreover, because of ODOL, trucks’ speed rate gets slower, so truck drivers work more than 6 hours, which causes tiredness and delays in the delivery. And train transport has a tight policy on work schedule. Both substitutes and replaced train conductors always have health checks to validate their health condition.
In essence, it is hoped that with internal innovation, the development of human resource competition at KAI Logistik, and the implementation of Government policies/regulations as a whole, KAI Logistik can provide the best service for customers.
This article was published in ISG Print Magazine June 2023 Edition.
