How to Ship to Indonesia

As the fourth most populous country in the world, Indonesia has 266 million people spread across 14,752 islands. Its e-commerce market is booming as more Indonesians shop online via their smartphones. With its huge domestic market, revenue from e-commerce is projected to grow from US$9.13 billion in 2018 to US$16.86 billion by 2022.

As an online merchant, you may want to jump on this opportunity to expand your e-commerce business and start a customer base in Indonesia. However, figuring out how to ship to Indonesia for the first time can feel daunting. You will need to find a logistics provider who can reach your Indonesian customers, know what you can and cannot ship into the country, and how to collect payment for your products.

While the shipping experience may vary from carrier to carrier, this article aims to outline the general shipping procedure you need to follow and explain various processes that occur in cross-border fulfilment.

1. Finding the right shipping partner

In cross-border shipping, the journey a package undergoes involves multiple stages: first mile, customs clearance at origin country, air freight, customs clearance at the destination country, distribution, and last mile delivery. Different shipping partners have strengths at different parts of the supply chain. Some companies specialise in only one stage of delivery while others provide end-to-end fulfilment services that cover all stages. Look out for a shipping partner that best suits your e-commerce needs.

2. Packaging your products

Appropriately packaging your products for shipment is important in cross-border shipping. There are many ways to package your products for shipment: boxes, envelopes, poly mailers, and mailing tubes. Including additional packing materials, such as bubble wrap and packing peanuts, helps to prevent your products from bouncing around within the package during shipment.

3. Choosing the right level of service

Carriers usually offer multiple tiers of service in shipping. These delivery options mainly differ in the features they offer, such as:

• Delivery time
• Weight limit
• Whether they offer track & trace
• Free pick-up at origin address
• Compensation in the event of loss of shipment

Typically, the more features offered, the higher the shipping fee is. Choose one that best suits your shipping needs and budget.

4. Provide package details

Carriers will need merchants to provide package details to generate the documentation required by Indonesia’s customs. The type of information carriers most commonly require are:

• Sender’s details and address
• Recipient’s details and address
• Country of manufacture
• Declared value and the currency
• Harmonised System (HS) Code of Item
• Item Description
• Item weight and dimensions
• Item quantity

Always check that this information has been entered accurately. An invalid recipient address will incur additional costs in customs and shipping charges when the shipping company sends the packages back to you. Under-declaring the value of the items of your shipments on the commercial invoice could result in a fine if the custom clearance agencies suspect that the declared value is below actual price. The courier may also charge you additional fees for undervaluing your goods.

5. Print the shipping labels and documents and attach them to your package

Paste the shipping label, which contains the information you’ve entered in the previous step, securely onto the parcel. The addresses and barcodes on the shipping label must be in clear view for the scanning of details during the shipping process. Place all supporting documents inside a clear plastic pocket and tape it onto the package. Do note that some of these documents, such as the Customs Declaration and commercial invoice, will require your signature.

6. Passing the shipment to the carrier

Depending on the delivery option selected and service level it offers, the carrier will collect the package from you either at the sender address you specified or at one of their drop-off points in the origin country.

Once your package is in the carrier’s hands, you will be given a tracking code to track your package on their tracking platform, unless the delivery option you chose does not offer tracking services. Your customer can also use this tracking code to find out if the package is still in the origin warehouse, transiting via air freight, or en route to their address.

Understanding More About the Shipping Journey

While actions required of the sender usually ends once the package is in the carrier’s hands, the shipping journey involves many more processes that your shipping partner carries out on your behalf. The following are two examples of key processes that occur when shipping to Indonesia:

Customs Clearance

Indonesia’s customs require extensive documentation prior to clearing goods for import. For this, most carriers engage local customs brokers who are accustomed to the standard procedures and required format of documentation. Minimally, the carrier must present a pro-forma invoice, commercial invoice, certificate of origin, airway bill, packing list, and insurance certificates. Certain categories of products, such as food and pharmaceuticals, may need additional certificates to be submitted to the relevant regulatory agencies. Additionally, they will charge an import duty for incoming goods based on the goods classification from Indonesian Customs Tariff Book or Harmonized System Code.

The process of providing the documentation is as follows:

1. The carrier will notify the customs office prior to the arrival of goods and submits import documents electronically through electronic data interchange in a standardised format.

2. The customs office will conduct a physical inspection of imported goods.

All imported consumer goods must have a label which identifies the importing agents. The Indonesian customs requires information on product labels to be clearly written or printed so that it can be easily seen and understood. Product labels should be written or printed in the Indonesian language, Arabic numbers, and Latin letters. The use of other languages will only be permitted when there are no matching terms in the Indonesian language, or if the goods are to be subsequently traded abroad.

Additionally, the following are prohibited on labels:

• Claims on the effect of the product on health, whether preventative and/or curative
• Incorrect or misleading information
• Comparisons to other products
• Promotion of certain similar products
• Any additional information that has not yet been approved

Besides the above, there are many more processes for controlled items. Different controlled items each have their own individual permit application process. Different items are subject to different tariff rates, which in turn are affected by various trade policies or free trade agreements between countries.

To ensure that your package doesn’t get stuck in customs, it is important to work with a logistics provider who is well-versed with the latest developments in customs regulations to better navigate the ever-changing landscape of customs processes.

Collecting Cash on Delivery

When your customers choose to pay for their purchase via cash on delivery, the last mile fulfilment stage of your supply chain becomes more complicated.

What happens during cash on delivery:

1. Online merchants will specify the amount to be collected in cash upon delivery when they pass the parcel to the logistics provider.

2. The logistics provider generates an invoice-cum-delivery challan, which indicates delivery details as well as the value of goods delivered, and attaches it to the parcel for easy retrieval.

3. The deliveryman is authorized to collect the cash payment from the recipient immediately upon the successful delivery of the parcel. While it may be called ‘cash on delivery’, some logistics providers accept card payments and hence, the deliveryman may also carry a card swiping machine.

4. The deliveryman deposits the collected cash in his office. The logistics provider will hand over the cash to the online merchant, usually in the original currency paid i.e. rupiah, after deducting applicable handling charges. Some logistics providers offer additional currency conversion services which convert the rupiah collected into the currency of the merchant’s country before transferring the money.

In Indonesia, 49% of online consumers paid for their e-commerce purchases via cash on delivery in 2017. Offering cash on delivery in your payment options is recommended when venturing into the Indonesian market because it will help facilitate your e-commerce sales. However, not every logistics provider support cash on delivery because of the additional payments infrastructure and processes it needs to implement to offer the payment method. Should you decide to offer cash on delivery on your e-commerce site after weighing the pros and cons, find a logistic partner that is able to facilitate it.

Cross-border shipping, especially the back-end processes, might sound very complicated. Fortunately, merchants can engage logistics providers who offer fulfilment services that will manage the packing, labelling, shipping and customs clearance of parcels on the merchants’ behalf. Having a reliable and proficient shipping partner can help solve the troubles you may encounter and ensure seamless cross-border shipping to Indonesia.

Learn more about best cross-border shipping practices in Asia Pacific on our blog at www.janio.asia/resources.

Originally published at www.janio.asia.