The Courier, Express and Parcel Services Other than Postal Services in South Africa 2023

Challenges

Competition from alternative delivery models and technologies. Customer requirement for on-demand immediate delivery. Drivers, vehicles and cargo are under serious threat from hijackers and protests that block routes and damage vehicles. Flexibility to handle peak and off-peak periods and special events. High costs and inefficiencies associated with last mile delivery investment and operations. Importance of delivery driver and customer interface. Indecision caused by review of legislation in terms of the exclusivity of SAPO and the regulations on the conveyance of mail. Inefficiencies, delays and increased costs caused by diverse locations and products, failed deliveries, product returns, increasing fuel and electricity costs, bad road conditions, security risks, weather conditions, traffic congestion, road closures and loadshedding.

Introduction

Ecommerce is the leading contributor to courier, express and parcel demand in South Africa. According to the South African Express Parcel Association, the express parcel industry is the fastest-growing transport-related sector in the country. Consumer appetite for quick deliveries is creating opportunities for entrepreneurs to start home delivery businesses. The Post Office, which has reported losses since 2013 and received over R10bn in bailouts since 2016, was placed under business rescue in July 2023. The business rescue plan includes more than halving branches and staff. The Postal Services Act and the SA Post Office Act are under review.

Opportunities

Innovation provides opportunities to streamline operations and offer niche services. Availability of alternative delivery technologies such as e-bikes, autonomous robots and drones. Collaboration with startups providing alternative delivery models. Demand for sustainable and environmentally-friendly transport. Ecommerce will increase the flow of goods requiring delivery. Introduction of value added services to meet changing customer shopping behaviour. Outsourcing of logistics by online retailers. Review of SAPO-related legislation.

Outlook

Strategic partnerships with innovative logistics companies and startups are reshaping the future of logistics and supply chain management. Technology is facilitating growth, with new solutions including autonomous vehicles and drones. These will increase the speed and efficiency of deliveries and address challenges related to traffic congestion and accessibility. Government considers the Post Office an essential service providing vital services, especially in remote areas.

Report Coverage

This report covers courier, express and parcel activities offered by postal operators and the South African Post Office. It includes information on the size and state of the industry, such as number of post offices and commercial vehicles, the financial and operating performance of the Post Office, alternative delivery models, drivers of growth and challenges. There is information on notable players, industry developments and corporate actions. There are profiles of 25 companies such as the Post Office, companies that are part of a global network such as UPS, Fedex and DSV, courier companies such as RAM, DPD Laser and Courier Guy, and retail players such as PostNet.

Trends

Collaboration and co-operation rather than competition with alternative delivery models and disruptive startups. Demand for sustainable, clean and green transport. Flexibility to meet customer demands in terms of products or delivery. Increasing demand for value-added and specialised services to meet emergency breakdown/repair situations. Increasing popularity and growth of ecommerce, the main driver of the CEP sector. Outsourcing of courier services by retailers to save costs and offer a better service. Use of technology to provide a streamlined and more efficient service.