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Digitalisation and artificial intelligence are changing the game in the express delivery industry globally and locally and those businesses that have invested in state-of-the-art technologies are reaping the benefits, says Jed Michaletos, MD at DHL Express South Africa. Consumers, he says, are demanding ever faster delivery and certainty on the price they are paying for that service.

providers, particularly in SA where the energy crisis is inhibiting economic growth.

The courier industry also known as the express logistics industry specialises in moving shipments within 48 hours from collection to the end of the last mile process In SA, the formal courier industry consists of about 200 companies, collectively employing about 18,000 people with more than 10,000 vehicles in operation.

The express parcel industry has more than doubled in size in the past decade with e-commerce excluding food and groceries largely as a result of the boom in e-commerce Garry Marshall, CEO of the SA Express Parcels Association (Saepa), the industry association representing a number of courier companies including FedEx, DHL, UPS, CourierIT, PostNet, RAM, DSV and Aramex, among others, estimates the industry locally is worth between R25bn and R28bn a year in revenue

Most of the larger courier businesses in SA are part of multinational groups with extensive global networks and capabilities. These larger entities have an advantage over small and medium-sized businesses given their networks, ability to invest in technology and IT systems, vehicles and research.

Key to the success of any express delivery business is a network which provides an extensive delivery footprint coupled with the ability to drive volume says Marshall. Globally, many logistics businesses are struggling.

Companies such as FedEx and DHL have reported processing fewer packages and reduced operating income. At the same time, their expenses are increasing. Investors tend to regard companies such as FedEx and DHL as barometers for what is happening in the wider economy.

That’s certainly the case in SA too, says Marshall. With the exception of the e-commerce sector, volumes are down and many businesses are in something of a holding pattern.

Data released earlier this month for the fourth quarter of 2022 by Stats SA revealed that GDP declined by 1.3%, a worse contraction than expected

Marshall believes the year ahead will be a tough one for the courier industry. This is a very competitive industry which is highly service driven. The energy crisis coupled with sociopolitical issues and possible pending legislation means that both the industry and its customers will have to batten down the hatches and navigate their way through significant uncertainty.

Although e-commerce saw significant growth during the Covid-19 pandemic, that growth has levelled out post the pandemic, says Marshall. During the pandemic, general air cargo was very difficult with the result that a lot of this sector

One exception to this trend is on-demand grocery deliveries which, says Marshall, have continued to experience exponential growth. Across the industry both globally and internationally, logistics providers are focusing on driving costs down to match revenues, says Marshall.

Graeme Lazarus, MD of RAM, says the most significant industry trends impacting the courier services industry is the rise in e-commerce and quickcommerce (or on-demand delivery) which is heightening customer expectations.

Craig Pitchers, chief operating officer of The Courier Guy, says the increased demand through e-commerce has resulted in some significant industry developments. The number of small and mediumsized businesses and retailers offering goods through apps and an online presence has increased hugely over the past two years.

He says one of the biggest trends affecting the industry is the continued increased demand in the e-commerce business-to-consumer delivery space. Coupled to this is a move to more on-demand offerings where a customer purchases something online and receives delivery within 60 minutes much like what is happening in the grocery space.

We re also seeing significant demand in the customer-tocustomer space where the general public wants to send a parcel, he says.

The Courier Guy provides this service to the public through its 2,500 drivers, 22 depots, 170-strong Kiosk network and 1,100 pudo lockers.

In a difficult operating environment, local courier companies are focusing on increasing their efficiencies.

Pitchers says The Courier Guy