By Jennigay Coetzer – first published in Business Day, 28 January 2011

The courier services industry originally focused on small parcels and documents, which often had to be delivered in an emergency. As the market matured courier companies developed global networks and established a broader, specialised distribution channel that plays an important role in the supply chain today.

They also implemented technology systems that enabled them to control the whereabouts of shipments and treat them more securely, says Gary Marshall, CEO and chairman of the SA Express Parcel Association. “Industry players are spending billions of dollars on IT,” he says.

Unlike the large bulk haulage operators, courier companies give each item personal attention. Today the courier services industry tends to focus on higher value items that need to be delivered quickly or non-delivery would be more costly.

For example, a few years ago the production line of a motor manufacturer in East London came to a grinding halt when some washers were faulty or the wrong size, and downtime was costing the company R250,000 per hour. So it organised a courier company to hire a Lear Jet to deliver replacement parts at a cost of R20,000.

“This sounds expensive, but it was cheap compared to the non-delivery consequences,” he says. Car parts, healthcare items like chronic medication, credit cards and cosmetics are among the high value items that are delivered by courier today in high volumes, says Marshall.

He says the courier services industry has traditionally focused on business to business deliveries. But with the growth of the internet and the increasing consumer demand for instant gratification an increasing number of items are being delivered directly to end customers.

“It is the only industry with the expertise and delivery networks to do this,” says Marshall.
He says deliveries can be fulfilled within 48 hours to most major markets, including customs clearance, which is done by the courier company after the customer has filled in the necessary information online.

A large volume of couriered items are shipped locally between major centres and internationally by airfreight, but the trend is moving to express road transport due to cost and increasingly stringent security, says Marshall. “With smaller vehicles, delivery between Johannesburg and Cape Town is a 15-hour run.”

However, he predicts that in time couriers will go back to airfreight as a result of increasing pressure on the roads, the new highway toll charges and the introduction of the Aarto regulations, which will force drivers with multiple traffic offenses off the roads.

He says the  large bulk shipments will move to rail and express deliveries back to air, and this is already happening in overseas markets. From a carbon footprint perspective, today 65% of airfreight is carried by passenger planes, which are flying anyway.

“So it is not actually adding to the carbon footprint,” says Marshall. He says the larger courier companies are introducing electronic vehicles and this will soon start happening in SA.

Already in some cases in the US and Europe couriered items arrive by passenger plane and are delivered to customers using electric vehicles. Marshall says the larger international courier companies are collaborating with manufacturers on vehicle design.

Jennigay Coetzer is a freelance business and technology journalist with 25 years experience, and she writes regularly for Business Day. She also runs media training and writing skills workshops, and is the author of A Perfect Press Release – or Not?, a guide to writing and distributing effective press releases, an electronic version of which can be downloaded free from her website: www.jennigay.co.za.

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