24 Apr

Interview with Gary Marshall – SAEPA


For courier companies in South Africa to ensure survival and continuous growth, collaboration is crucial and forms one of the cornerstones of supply chain management, notes South African Express Parcel Association (SAEPA) CEO Garry Marshall.

He explains that 10% to 15% of local companies that were in operation a year ago do not exist today. This, however, mainly owes to acquisitions and take overs where local companies have been bought out by international players.

“This shows a growing trend of collaboration in the courier industry,” Marshall points out, citing SupaSwift, acquired by Fedex and Berco, acquired by Aramex, as examples.

Marshall notes that this trend of acquisition is mostly evident with medium-sized courier companies. “Not many small formal courier operators are being bought over as these companies’ are owner-managed and have more control over operations, therefore, they are in a position to remain competitive as small service providers.”

However, SAEPA notes that small courier operators do find themselves at a growth point where their operations transition from small to medium (companies with a R50-R200-million per annum turnover) rendering them in need of investment for infrastructure – from network, Information Technology (IT) systems, management capability and, most importantly, density.

“Courier companies tend to stagnate in the middle ground and not many migrate into large sized companies with the exception of those involved in a corporate takeover,” Marshall reiterates, noting that South African courier company RAM is one of the few examples of a large-sized independent courier company not owned by an international player.

Dovetail Business Development Director Shermandra Singh concurs that this trend has been visible in the logistics industry and is evident in the amount of enquiries for small software solutions coming through to Dovetail.

“There has been an increase in small to medium sized companies requiring logistics management software solutions to support their growing operations.”

The problem with operational growth is that there is a big increase in waybill volumes which requires additional communication between a company and its clients and drivers. Communication also needs to be automated as customers require instant feedback and companies need immediate access to information for operations to run efficiently.

“While software for smaller operators is available, affordability is an issue,” Singh explains, adding that consolidation among small courier operators is a trend becoming more visible and serves as a solution to affordability challenges.

“Small courier operators are integrating and combining resources to acquire infrastructure and working together to ensure growth.”

Innovation Crucial for Survival

While the courier industry presents unique challenges, it does provide for new entrants into the arena, Marshall states, but warns that long-term survival is questionable without innovation. “Companies need to define what they do and differentiate themselves from everyone else. Many small players either provide niche operations which sustain them until they can afford to branch out or they cater to a dedicated client base which they serve very well.”

SAEPA stresses that innovation has become the key to survival with even large international players differentiating themselves through the use of innovative IT solutions, network and physical delivery footprint.

The organisation warns, however, that, while Ecommerce and online retail service providers (Etailers) provide great growth opportunities for the courier industry, Etailers need to realise the true cost of home deliveries as many are currently underpricing themselves and will eventually feel the brunt of these costs.

“Ecommerce has introduced unique challenges into the courier industry and, should companies not consider changes to their business models, they will become stuck as this trend introduces high volume orders and high growth but also presents serious operational issues with regard to delivery footprint.

“The ability for IT to handle the drastic increase in shipping volumes as well as the demand from customers for instant feedback and updates on the delivery process is not only expensive, but, in many cases, courier companies’ current systems cannot interface with the tracking and reporting systems needed and requires additional investment and development,” Marshall explains.

He adds that the average number of times a courier company attempts a home delivery is three which renders this exercise very expensive. “The South African climate bring a host of unique challenges as people live in high security estates which makes entrance difficult. In addition, deliveries into townships prove even more difficult with a lack of delivery addresses and security threats.

“Home deliveries is a very complex process and for courier companies to take advantage of the opportunities presented by Ecommerce and Etailing, innovation is required to overcome our country’s unique challenges.”

Marshall cites the delivering of packages to locked automated dropboxes that can be unlocked with a secret pin sent to a recipient’s cell phone as an example of innovative courier solutions being used by companies around the world.

Singh agrees that IT innovation will take the lead with ensuring successful Etailing and Ecommerce endeavors in South Africa. “IT providers are working with the courier industry to ensure that operators can overcome challenges, take hold of opportunities and ensure optimum growth with many innovative solutions to be introduced in future.”

Related Articles:

The Rise & Rise of CBD

By Wellness Warehouse 0 comment(s)

Celebrating 30 years of Success!

By VeriCred Credit Management Services 0 comment(s)

Lesedi appointed as EPCM representative for Toronto Group New Charcoal Manufacturing Plant in Wellington, Western Cape

By Lesedi Nuclear Services 0 comment(s)

Vredenburg Transport SMME Shows Adaptagility in Her Business Strategies Despite the Pandemic

By SAICA Enterprise Development 0 comment(s)

New TSIBA Business School CEO Dr Rudi Kimmie packs a heavy punch in education development

By TSIBA 0 comment(s)