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

Introduction

The courier, express and parcel (CEP) services industry faces weak economic conditions and low business and consumer confidence, affecting the volume of goods requiring express delivery. The industry is benefitting from the development of the on-demand economy and growth in ecommerce sales, increasing demand for just-in-time deliveries and from the poor service provided by the South African Post Office.

Increasing customer demand for speedy and flexible deliveries and the growth of disruptive startups and innovative delivery options are forcing traditional operators to review their distribution strategies or partner with or invest in new delivery companies to provide innovative and alternative delivery options. The continuous development of drones, robots, and autonomous vehicles are driving ongoing change in the industry.

Opportunities

Innovation provides opportunities to streamline operations and offer niche services.

Availability of alternative technologies for delivery such as drones and autonomous ground vehicles. Development of industries and new industries which will need CEP services. Diversification of services. Ecommerce will increase the flow of goods requiring delivery. Increasing days of operation. Increasing demand for electronic products from middle class and youth on the African continent.

Potential expansion through mergers or acquisition of other CEP operatorsOutlook

The South African courier, express, and parcel market has recorded substantial growth in recent years, and revenue is projected to expand over the next five years.

The growth of ecommerce is driving growth of the industry. Urbanisation and infrastructure development could propel growth further, and new technologies can provide growth opportunities to service providers. Risks include increased competition, new entrants and disruptive startups. Government and regulatory bodies may impose restrictions on operators, limiting their ability to operate and grow. New distribution models such as retail pick-up points are enabling faster, more affordable and more convenient express parcel deliveries to more distribution points, which could boost the sector's growth. Continued rapid ecommerce growth is poised to continue. Competitiveness will be driven by cost of delivery and the efficiency of reverse logistics.

Report Coverage

This report covers courier, express and parcel services offered by registered unreserved postal operators in terms of the Postal Services Act, excluding reserved national postal activities carried out by the Post Office.

It includes information on the state of the sector, parcel freight and transport income, the growth in ecommerce, major players, corporate actions, developments. And influencing factors. There are profiles of 24 companies including PostNet, RAM, Takealot, Value Logistics, DHL, DSV, Aramex and Courier Guy.

Strengths

Available information technology for all aspects of logistics management.

Broad scope of services such as same day, tracking, security etc. Global presence and large number of services. High competition leads to competitive prices. Provides a support service which facilitates the success of other sectors of the economy. Provides efficient customer services. Technologically advanced. Value-added services such as storage, set up and installation, insurance etc contribute to supply chain efficiencies.

Threats

Alternative delivery options such as locked automated drop boxes and pick-up points.

Competition for traditional operators from on-demand courier startups. Complex and costly home deliveries associated with ecommerce. Different laws in different countries. Electricity supply restrictions and loadshedding. Electronic communications reduce demand for delivery of documentation. High level of unemployment. High operational costs such as increasing fuel costs, carbon tax and toll fees. Legal challenge of the South African Post Office and ICASA. Natural disasters, diseases, famine and drought. Online retailers investing in inhouse distribution networks. Political and civil unrest, violence and strikes. Poor road conditions and road maintenance backlog causes vehicle damage and delivery delays. South Africa’s worsening reputation is affecting trade. Vulnerability to hijackings and theft especially during transportation of easily saleable, high value goods in remote areas.

Weaknesses

Critical shortage of professional drivers and other staff. High carbon emissions from vehicles. Industry is affected by local and global economic conditions. Inefficient and costly delivery options such as low volume deliveries and deliveries to remote areas. Insufficient services to rural and outlying areas. Lack of employee safety. Pricing highly dependent on transportation costs.