Representative association for express freight and the courier industry the South African Express Parcel Association (Saepa) notes that businesses that rely on the courier and express parcel (CEP) sector for urgent, secure and efficient procurement and distribution solutions are among the key drivers fuelling the CEP industry worldwide and in South Africa, making it the “fastest-growing sector of the transport industry”.
“Moreover, these key drivers include households that are increasingly buying items online and opting for express delivery,” Saepa chief executive director Garry Marshall tells Engineering News.
Advisory firm KPMG noted last year that online shopping was worth about R59-billion in 2011. This equates to 2% of the South African economy and is expected to grow to about 2.5% by 2016, while by 2025, e-commerce could account for 10% of retail sales in the African continent’s largest economies, which will translate into some $75-billion in yearly revenue, according to US-based analysts McKinsey & Company’s 2013 ‘Lions go digital: The Internet’s transformative potential in Africa’ report.
However, Marshall notes that, while online and mobile buying is increasing, local domestic deliveries are problematic and inefficient. “It is expensive to send a vehicle to drop off one consignment at a time at a residential address, as many people live in secure complexes. This makes door-to-door delivery difficult, particularly when the owner is not at home,” Marshall explains.
Further, rural areas add another challenge, as the long distances involved in South Africa make deliveries more expensive, particularly one-off deliveries, Marshall says.
“Yet demand is growing as the emerging middle class is increasingly developing a taste for online purchasing and now has the tools – Internet, cellphones and credit cards – to bring it into effect,” he notes.
Marshall points out that, not only is demand for courier services for durables increasing, but also the home delivery of groceries and medication, while advisory firm KPMG’s June 2014 ‘Transport Tracker: Global Transport Market Trends and Views’ report notes that “online grocery sales could be another big opportunity for logistics companies with a global market potential of $100-billion by 2018”.
However, Marshall emphasises that these sectors require a different supply chain skills set, owing to delivery timing and some of the goods being perishable, adding that sustaining CEP growth requires continued availability of skilled professionals and future leadership. This key challenge is reiterated in the Council for Scientific and Industrial Research’s tenth State of Logistics Survey.
Similarly, the 2014 Barloworld Logistics ‘SupplyChainForesight’ report “identifies the lack of relevant skills/talent as the key strategic business constraint and the fourth-highest supply chain constraint”.
In light of these constraints, Saepa focuses on skills development by assisting several learners through the National Certificate in Supply Chain Management, which provides a broad perspective on the discipline and vital role of CEP.
The curriculum emphasises aspects, including understanding and managing the supply chain environment, managing the strategic supply chain, as well as ethics in supply chain management.
Saepa believes the long-term health of CEP industry employees is an essential consideration in personal development and continued productivity, hence, the establishment of the Wellness Express in 2008.
This “high-value, low-cost” clinic offers a primary healthcare service to industry employees and their dependants.
The clinic, situated in Jet Park, Gauteng, offers occupational health, psychiatry, advanced cardiac life support and advanced paediatric life support, as well as HIV/Aids management. Additional services include access to eye testing, emergency stabilisation, as well as family planning.
“A new Wellness Express clinic was also opened last month, in Durban, complementing the Gauteng clinic,” Marshall concludes.