How do parcels enter Indonesia from Hong Kong via air or sea? What kind of customs documents do you need to clear ID customs? Find out here!
August 7, 2020
When it comes to which country you should expand to within Southeast Asia, no other market stands out more than Indonesia, as it is the largest eCommerce market in Southeast Asia. The archipelago’s eCommerce industry is expected to grow to USD 50 billion by 2024 from its 2020 value at USD 26 billion.1
Furthermore, Indonesia has a high number of internet users, standing at 175.4 million people in 2020, and 88% of these internet users have bought a product online.2 To find out more about this market, you can check out our country guide to Indonesia.
For eCommerce merchants, you may be interested in finding out how you can deliver your products from Hong Kong to Indonesia and expand your consumer base. Alternatively, you may be looking for bulk freight solutions to power up your supply chain in Indonesia.
In Indonesia, most eCommerce purchases take place within the Jabodetabek or Greater Jakarta region, which includes Jakarta, Bogor, Depak, Tangerang, and Bekasi. This metropolitan area is a four-hour flight away from Hong Kong, and is the most populous area in Indonesia. Because of the developed infrastructures in place, the region is able to support eCommerce transactions and deliveries to its residents.
However, with the recent spread of COVID-19, flights into Indonesia have been limited in an effort to curb the pandemic. When shipping internationally into Indonesia from Hong Kong, it would be helpful to stay updated of any regulatory changes in Hong Kong and Indonesia so that you can plan out your logistics supply chain accordingly.
Thus, with Hong Kong’s geographical proximity to both Mainland China and Southeast Asian countries, as well as its status as a transhipment hub in the Asia Pacific region, there lie many reasons for eCommerce and B2B merchants to find out how to ship internationally from Hong Kong.
Additionally, as a merchant looking to ship internationally, it would also be good for you to find out whether air or sea freight is more suited to your requirements — which we’ll cover in the next section of our article.
When should you use air freight or sea freight?
If speed is of the essence, such as promising quick delivery times to your eCommerce customers, then air freight is worth considering as transport by air is often much faster than by sea. When solely looking at the travel duration from country to country, a flight from Hong Kong to Indonesia will take around a day at most. Sea freight’s mid-mile delivery could take a few more days to a week depending on sailing schedules.
However, due to the COVID-19 pandemic, there has been a limited number of flights all around the world — resulting in prices for air freight increasing from the lack of cargo space. The limited number of flights may also cause delays and affect the delivery timing for shipments.
Hence, in this period of uncertainty amidst COVID-19, sea freight may be a more reliable option to consider. Furthermore, Indonesia has extensive connectivity through sea freight with its 17,000 islands. Its geographic size is comparable to the United States, giving you many options in terms of where to ship to Indonesia.
On another note, while air freight is faster, it is often more expensive. It’ll be good to ensure that the profit you make on these shipments can justify air freight’s higher rates compared to sea freight.
However, there are actually times when air freight can be cheaper than sea freight. To understand this, it helps to understand how air freight rates are calculated. For air freight, rates are charged to the order’s volumetric weight (how much space it takes up) or its actual weight depending on which is greater. For less-than-container-load shipments, sea freight tends to be charged by volumetric weight, with a minimum chargeable volume being 1 cubic metre (cbm).
Sea freight can be cheaper than air freight if your order is above 2 cbm as since sea freight rates per volume are much lower than shipping via air freight. However, if your items are below 1cbm, which is quite common among eCommerce products, you’ll actually be paying for unused space since you do not hit the minimum chargeable volume. Hence, in such instances, air freight can be more economical than sea freight.
This means that for merchants shipping B2C parcels, air freight tends to be the more common option especially for those who don’t have a consistently large order volume, but would still require their parcels to reach the destination country quickly.
When using air freight, inventory will mostly be held in Hong Kong as only small portions of products are sent over each time. This can make it more preferable for eCommerce merchants who are new and want to test the market first before committing to sending over larger amounts of shipments.
When using sea freight, the main port of Jabodetabek is the Port of Tanjung Priok at North Jakarta (IDTPP), and leaves from Hong Kong from the Port of Hong Kong (HKHKG). This mode of transport is preferred if you are looking to ship large volumes into Indonesia cost effectively, and is usually paired up with having a local distribution centre within Indonesia for storage and fulfilment within the country.
Nonetheless, with the COVID-19 pandemic around, sea freight could be a good alternative to air freight even for B2C deliveries considering the shortage of available international flights. While slightly slower compared to pre-COVID air freight timings, it might still be safer than facing possible delays if you choose air freight during this period.
When choosing between air freight and sea freight, consider the following:
The weight and size of your shipment
The products being shipped
While air freight has several benefits, one of its downsides is that it has a limitation in terms of what is allowed onboard the plane. Bulky or oddly-sized items, or items too dangerous to meet air freight’s restrictions on what can be shipped generally should use sea freight instead.
For instance, these products generally can’t be shipped via air freight: products containing gases, all things flammable, toxic or corrosive items like batteries, magnetic substances like speakers, perishable items and more. If you’re shipping these items, sea freight is likely to be the only option that can meet your needs.
If your freight requirements and considerations go beyond what’s listed here, logistics service providers like Janio can help to advise you on whether air freight or sea freight is better suited to your needs and also offer you both shipping modes for your orders. Click the banner below to find out more!
B2C and B2B Shipping from Hong Kong to Indonesia in 4 Steps
While your parcel’s journey from Hong Kong to Indonesia can vary depending on your requirements, shipping from Hong Kong to Indonesia would usually follow these steps.
First Mile Delivery in Hong Kong
First mile delivery refers to the first stage of transportation in the logistics supply chain where the parcel first leaves the merchant’s doorsteps. Merchants could either drop off their goods at specific points or request for logistics companies to pick up their goods from where they were stored. The goods will then be transported by couriers or postal services to the customs office at the airport or port.
As packages may sometimes go through bumpy rides in certain stages of the delivery journey, such as turbulence on the plane or the vessel, having extra padding for fragile items might be helpful. Methods like bubble wrapping your products and packing peanuts on the outside are good ways to prevent your products from bouncing around or getting deformed during shipping. To learn more about the best practices in packaging your goods, you can check out our packaging guide.
In addition, you’ll need to ensure that your shipping labels and customs documents are labelled clearly and are easily accessible for customs inspection. To find out more about this, you can also check out some of the best practices in labelling your shipments to ensure your parcels have a smoother shipping process.
Once the packaging and labelling has been settled, your shipment is ready to be passed to your shipping partner. Take note that most shipping partners would have a cut-off time for submitting orders for drop offs and pick ups for route-optimisation, so it’ll be good to prepare early to make sure that you can secure a slot with them.
If your shipment is a B2C parcel, it would likely be consolidated at a transportation hub along with other packages with the same destination country before it can be sent for customs clearance. Since B2B shipments are already consolidated, the shipment can be transported directly to the origin warehouse for customs clearance.
Hong Kong Origin Customs Clearance and Freight
Once your orders are consolidated, they’ll head to your logistics service provider’s air cargo agent’s warehouse at either Hong Kong International Airport (HKG) or one of your logistics service provider’s warehouses at the Port of Hong Kong (HKHKG) depending on your selected freight mode.
At the port or airport, Hong Kong Customs and Excise Department officers will inspect your shipment and their documents to see if they can be cleared for export from Hong Kong. The documents that are usually needed for customs clearance at this stage are:
Bill of lading/ Airway Bill
You can check out the official list of documents to import and export from Hong Kong on the official Hong Kong Customs and Excise Department website.3
Unlike shipping from Southeast Asian countries, exporting from Hong Kong requires you to have an export permit before you can ship your goods out. Additionally, if you’re shipping any restricted goods, you’ll need to apply for a special export permit for these goods before it can be exported. More information on export permits from Hong kong can also be found here.4
If you’re uncertain about what kind of steps you need to take to export your goods from Hong Kong, feel free to chat with our customs clearance experts to clarify which documents you need to apply for and how to declare your goods.
As Hong Kong is a free trade country, it has reduced duties and taxes, making the customs clearance process much faster than in places like China where there are also more shipping restrictions. This might be good news for those who intend to ship from mainland China to other parts of Southeast Asia.
To ship via air freight into the Jabodetabek region in Indonesia, your shipment will typically leave via Hong Kong International Airport (HKG) and then enter Soekarno Hatta Airport (CGK). However, due to the COVID-19 pandemic, there has been a limited number of flights all around the world — resulting in prices for air freight increasing from the lack of cargo space. The limited number of flights may also cause delays and affect the delivery timing for shipments.
If you’re shipping via sea freight with Janio from Hong Kong to Greater Jakarta, your goods will sail from Port of Hong Kong (HKHKG) to Port of Tanjung Priok (IDTPP). While the Port of Tanjung Priok (IDTPP) is the busiest port in Indonesia, other noteworthy ports include the Port of Tanjung Perak (IDTPE), Port of Kuala Tanjung (IDKTJ), Port of Makassar or Soekarno-Hatta (IDMAK), Port of Bitung (IDBIT), and Port of Sorong (IDSOQ).
Customs Clearance in Indonesia
After your shipments have arrived at their port or airport in Indonesia, they will be moved to a customs warehouse for clearance. At this point, the customs officers will inspect your parcel and shipping documents to determine whether or not your product is allowed to enter Indonesia – similar to what was done in Hong Kong, but with Indonesia’s own set of rules.
To smoothly clear customs for import into Indonesia, you or your shipping partner would generally need to provide the following documents:
Certificate of origin
Master airway bill or bill of lading
Customers identification number (Nomor Identitas Kepabeanan, NIK)
Importer identification number (Angka Pengenal Import, API)
Receipt of payment of import duty and import-related taxes
Import Permit (B2B)
Other relevant permits, licenses, and certificates
If your item is below Indonesia’s de minimis rate of USD 3, then there would be no need to pay additional import duties and taxes to the customs office. The de minimis rate refers to a value threshold where fewer or no duties and taxes are charged if the shipment’s CIF value, which includes your good’s price, shipping fee, and insurance costs if any, is below that point.
However, this only applies to goods that are delivered via air freight. Earlier in 2020, the Indonesian government revised their de minimis rates from USD 75. To find more information about this regulatory change, you can read our article here. Items below the de minimis of the current USD 3 just require a VAT payment of 10% of the order valuation.
On the other hand, if your goods exceed the de minimis threshold, higher import duties and taxes will be levied on your shipment. You would have to pay a value-added tax (VAT) at 10%, and the import duties and income tax depend on the product category as declared by the harmonised systems code (HS code). You may find out the percentage of your import duties paid through Indonesia’s Directorate General of Customs and Excise website.5
If you’re shipping a B2C parcel, you can choose to either pay for the import duties and taxes yourself or let your customers pay for the import duties and taxes — also known as Delivered Duties Unpaid (DDU) and Delivered Duties Paid (DDP). While it is encouraged to opt for DDP (i.e. account for the duties and taxes yourself) to keep your shipping experience smooth for your B2C customer, it would still be good for you to understand what these arrangements mean.
Distribution and Last Mile in Indonesia
Once your shipment has cleared Indonesian customs, it will enter the distribution stage of the shipping journey. If the consignee’s address is within the Jabodetabek region, your B2B shipments can be delivered directly to its destination. However, B2C parcels will first need to be sorted at a transport hub to sort them out before the last mile journey can begin.
Yet, if the address is beyond an address that can be reached by vans or trucks, an additional domestic flight will be needed before your shipments can be sorted or sent for last mile delivery. The last mile delivery stage is where your parcel will be sent from the destination warehouse to your consignee’s address. In Indonesia, this stage of the delivery is done via vans or motorcycles.
During the last mile delivery stage, your logistics service provider will ensure that your shipment is received by your consignee. According to Statista in 2019, around 1 in 10 online transactions are paid via cash on delivery.6 This means that offering cash on delivery as a payment option in addition to other online payment methods might help you to win the trust of a certain group of eCommerce consumers in Indonesia.
The well-connected Hong Kong has many more flights than nearby countries and cities in mainland China, making it beneficial for eCommerce merchants in the surrounding region to export from Hong Kong to other parts of the world. Considering the rapid adoption of eCommerce in Indonesia, expanding internationally into this market means that you’ll be riding the wave of eCommerce growth in the country.
To impress your potential customers in Indonesia, it helps to have a reliable shipping partner that can deliver on time. Even as a B2B shipper, you’d find that shipping from Hong Kong to Indonesia can be made much easier with an experienced shipping partner who understands the local logistics environment well enough, allowing you to ship in bulk with ease.
When choosing a logistics service provider, it would be good to consider the cost, speed, delivery experience, and your whole supply chain before committing to a shipping solution. That way you can impress your customers with your hottest items in stock while wowing them with efficient eCommerce delivery speeds.