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BusinessDay www.businessday.co.za Thursday 13 March 2025
INSIGHTS
COURIER SERVICES Sponsored content
Consumer demand spurs courier sector growth
Burgeoning •e-commerce has an impact on the industry, writes Lynette Dicey
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onsumer demand for faster and more efficient delivery services has resulted in steady growth for the courier, express and parcel services industry, also referred to as the express logistics industry. Garry Marshall, CEO of the South African Express Parcel Association (Saepa), estimates the courier services industry generates between R25bn and R30bn annually with its growth driven primarily by growth in the e-commerce sector. “Growth in the e-commerce sector has a direct impact on the courier service industry given
Saepa CEO Garry Marshall. that the e-commerce business model relies on a delivery being made,” says Marshall. “Although SA was late to the e-commerce trend relative to more developed countries, in recent years it has enjoyed robust growth.” The Online Retail in South Africa 2024 report revealed that the share of total retail made up by the online sector jumped from 2.8% in 2020 to 6.15% in 2023 and is expected to pass the 10% mark by 2026.
Statista’s Digital Market Outlook estimates there will be about 11.7 million e-commerce users in SA this year, increasing to 21.52-million users by 2029. “Consumers have quickly grown accustomed to the convenience of online shopping and home deliveries with express delivery rapidly becoming a standard component of supply chains,” says Marshall. The industry consists of numerous formal and informal businesses employing about 18,000 people in the formal sector with more than 10,000 vehicles in operation. “There is no question the courier industry is very competitive with a big focus on service levels. Customers expect quick and efficient delivery, real-time tracking and transparency throughout the process so they know exactly what is happening. Courier businesses have responded by making significant investments
in tracking and digital solutions to ensure they remain competitive,” he says. Given a sluggish economy, Marshall says courier companies are under pressure to manage costs, ensure they are delivering sufficient volumes and have a national network and delivery footprint to remain sustainable. “The industry receives no government subsidies so there is enormous pressure on prices.” Saepa is a nonprofit organisation representing the interests of the express parcel transport industry. It has been defending the right of courier companies to operate after the South African Post Office (Sapo) lodged a complaint against Postnet with the Independent Communications Authority (Icasa) in 2018 to cease delivering small parcels. Sapo believes it has the sole right to deliver items weighing less than 1kg. A subsequent high court interdict ensured Postnet – and
other courier companies – could continue to offer courier services. “Ultimately, Saepa wants a court to decide if Postnet operated illegally,” says Marshall. Sapo was provisionally liquidated in 2023 and is in business rescue. The stateowned entity has received more than R10bn taxpayer bailouts over the past decade yet remains notoriously unreliable. “The legal battle with Icasa has come at a huge expense to the industry and is perceived as a risk to investors. The reality is that it’s not feasible for government to compete in the small parcel delivery sector with a like-for-like service.” Marshall expects the yearslong legal battle will be come to a head later this year. Minister of communications & digital technology Solly Malatsi has proposed ending the Post Office’s monopoly and partly privatising the organisation to modernise it and put it on a more competitive trajectory.
SA key to intra-African trade Africa’s e-commerce landscape offers significant opportunities for businesses and logistics providers as rapid urbanisation and a growing middle class fuel higher consumer spending, accelerating the demand for seamless logistics solutions. SA is strategically positioned as an entry point for global e-commerce platforms looking to expand into the broader African market, says SkyNet Worldwide Express MD Zeyn Agjee. Its developed infrastructure, robust financial systems and established trade networks make it an ideal hub for businesses targeting the African market. However, a potential challenge is the uncertainty surrounding the renewal of the African Growth and Opportunity Act (Agoa) which has granted duty-free access to the US for various African products, including apparel.
EMERGING MARKETS
“Should Agoa not be renewed, African nations will need to seek new markets and may look to strengthen intra-African trade, including taking advantage of the opportunities provided by the African Continental Free Trade Area (AfCFTA), as well as expand their trade relationships with emerging markets in Asia, Europe and Latin America,
Zeyn Agjee … entry point. mitigating the impact of lost US market preferences,” says Agjee As part of its growth strategy, SkyNet has started preparing for these potential shifts by strengthening its logistic networks between African countries to ensure businesses can adapt to new trade landscapes. The first phase of the expansion strategy saw SkyNet South Africa acquire the SkyNet Worldwide Express operations in the UK, Germany, Belgium and Mozambique, providing access to these international lanes. More recently, it has expanded into the Australian market and acquired SkyNet Worldwide Express Hong Kong, the latter which is a key transshipment hub, facilitating seamless trade routes from China to the rest of the world.
In tandem with a strategic expansion, SkyNet is also growing its capabilities, including creating solutions to enable seamless cross-border trade to support the demands being placed on e-tailers when expanding into cross-border markets. It has implemented automated customs clearance processes, VAT and duty compliance solutions and other measures to streamline trade and reduce delays. “As an authorised economic operator, accredited by Sars, SkyNet offers significant benefits for businesses involved in international trade and logistics, ensuring faster customs clearance, lower compliance costs, enhanced global trade opportunities and improved security by ensuring compliance with Sars and World Customs Organization standards. In-country VAT and duty collection processes are streamlined to ensure packages are cleared before landing in the country of destination, fasttracking delivery to the endconsumer,” says Agjee. “SkyNet’s logistics network spans more than 190 countries, providing businesses with seamless end-to-end tracking and visibility, eliminating logistical complexities and enabling e-commerce growth into Africa and the rest of the world”.
Don’t fall victim to fraudsters The growth of online shopping in SA has resulted in a greater volume of last-mile deliveries, but this has also made these vehicles a prime target for hijackers, leading to higher security costs for courier companies. The Road Freight Association says the average number of incidents per day has increased by about 50% compared to 2021. High-value products are increasingly being transported in cash-in-transit vehicles. “In response to these risks, courier companies are spending a fortune on security including on-board cameras, advanced tracking systems, improved monitoring and even security escorts. These increased costs are having a negative impact on their margins,” says Garry Marshall, CEO of Saepa. In addition to the risk of vehicle hijackings and theft, criminals are also using the courier businesses for attempted fraud. Fraudsters are sending messages purporting to come from a courier company
Driven by edge technology and a robust infrastructure—including 40 hubs, 2000 owned and operated vehicles and a fully in-house team of over 3000 —we deliver excellence in every experience. No outsourcing. 100% compliance with South African labor laws. Seamless deliveries.
saying that a delivery is ready to be made, but the consumer must first pay a customs fee or other small outstanding fee for which credit card or bank details are required. Marshall warns that recipients of these messages should never click on any links to these messages — even if the message seems authentic — as the links typically take the user to a bogus website where their financial details can be harvested or malware is downloaded. Another strategy used by criminals is to contact a consumer claiming that they are having difficulty finding the address and, during the ensuing discussion, they elicit personal details to scam the victim. When the target says they are
THE INDUSTRY HAS MADE SIGNIFICANT INVESTMENTS IN PROTECTING THE INTERESTS OF USERS AND THEIR CARGO
not expecting a parcel, the response is usually that it has been sent by a family member or friend. “The express parcel industry has made significant investments in protecting the interests of users and their cargo. Ultimately, however, safety is still dependent on the end user acting with caution on any online transaction. Customers needs to be aware of these scams and not fall prey to fraudsters. If they have any doubt regarding the authenticity of the message, return to the original order placed with the supplier and track the parcel from there through the supply chain,” says Marshall. He expects that as the industry continues to grow, so too will incidents of attempted fraud. “Fortunately, consumers have become more savvy and are not falling for scams as easily. However, we should expect that criminals will become more sophisticated in their attempts to defraud consumers,” he says.