Trade

Air Cargo Rates Too High, Four Logistic Companies Bankrupt

Air cargo rates have increased sharply, making express, post and logistic shipping companies in Indonesia depressed. As a result, some of the logistics companies even went bankrupt or closed their businesses.

This was conveyed by Deputy General Chairperson of the Association of Indonesian Express, Post and Logistics Services Companies Budi Paryanto in a discussion at Millenium Sirih Hotel, Central Jakarta, Wednesday (02/27/2019). The increase in air cargo rates is said to reach more than 300%.

“Those who joined Asperindo reported that there were four companies which they went through bankruptcy and began to close operations. Two in Pekanbaru, one in Palembang and one in Jakarta,” he said.

The four companies, he said, experienced obstacles in facing the turmoil of rising air cargo rates. The shipping costs that are included are raised and reduce the amount of shipments which ultimately makes the company’s resilience shaky and chooses to close operations.

“The durability is good, they can still survive, but the small ones are already rocking. They have started laying off employees, just the administrative process of closing the company,” explained Budi.

The company’s rising air cargo rates are anticipated by the company by relying on shipping through other modes such as land, rail and sea using ships. The transition of air freight transportation is estimated to have reached 50%.

While the rest now is long distance shipping. For long-distance routes, Budi said the company still relied on air cargo.

“This is a business choice. When we cannot use air transportation due to high prices, we have to switch to land transportation. So this is a business choice,” he said. (eds / ara)

Detik.com

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