Indonesian 3PLs say Shopee antitrust fix falls short, urge action

The rise of ecommerce platforms’ in-house fleets continues to erode shipment volumes for Indonesian third-party logistics (3PL) players, many of whom are now asking the government to do more to protect them.

Nearly all major ecommerce firms in Indonesia have in-house fleets, including Shopee, Lazada, Tokopedia, and Blibli.

Shopee even faced allegations of monopolistic behavior in the country, being accused of prioritizing its logistics service SPX Express over 3PL players on its platform.

Photo credit: Susilo Prambanan/Shutterstock

However, the case – which was handled by Indonesia’s antitrust agency – was resolved after Shopee made it easier for customers to choose their preferred courier for their purchases.

But local 3PL firms say more action is needed to ensure the industry’s survival.

Competition with in-house players has led to an “unhealthy” price war, says a co-founder of an Indonesian logistics firm who asked to remain anonymous. The co-founder alleges that Shopee’s changes are unlikely to significantly benefit 3PL firms.

The boom that didn’t come

In-house logistics services can offer lower rates to end-users because they receive subsidies from their parent companies, which have other revenue streams. Meanwhile, 3PL players are heavily reliant on revenue from shipping services, the co-founder explains.

The situation has become even more challenging for 3PL firms as their shipment volumes have fallen after the pandemic, according to the co-founder. Additionally, funding for logistics startups in the country remains scarce amid the tech winter.

“During Covid, all last-mile or 3PL companies increased capacity expecting volumes to keep rising, but they dropped sharply once the pandemic subsided,” the co-founder says.

This decline is reflected in the financial performance of companies such as Ninja Van and Anteraja. The former’s revenue in Indonesia fell by 33% year on year in its 2023 financial year, and the latter has seen its revenue drop in 2023.

Layoffs have also affected several players in the 3PL industry, including SiCepat in 2022 and J&T Express over the past year.

Minimum price regulation

To address the current situation, logistics associations in Indonesia are urging the government to set a price floor for courier services on ecommerce platforms and general courier deliveries.

Should the government intervene?

Couriers become victims

M&A a final option?