particularly in the business-toconsumer segment, has positively impacted The Courier Guy, aligning with the business s strategic objectives and contributing to sustained growth and expansion. We expect that the imminent launch of Amazon will intensify competition in the e-commerce sphere while catalysing further growth in online transactions. This heightened market activity is projected to result in increased parcel volumes, particularly within the business-toconsumer space, he says. As demand grows for a fast and reliable online shopping journey, the importance of trust and reliability at the last mile the final step in the delivery
journey is critically important. Pitchers says The Courier Guy’s operational model focuses on localised services, leveraging in-depth knowledge of small service areas to ensure exceptional customer experiences and high service levels. The evolving landscape of consumer preferences emphasises convenience and instant gratification which, in turn, significantly influences the strategies adopted by retailers and last-mile delivery providers, says Pitchers. The introduction of innovative solutions like electronic parcel lockers also known as pudo lockers addresses the growing demand for smart and convenient parcel management solutions, catering to evolving consumer needs.
In addition to the pudo locker network, the company also introduced one-time pin (OTP) delivery methods to enhance security, efficiency and environmental sustainability.
The industry has not witnessed an influx of new entrants in recent years, arguably due to the fact that there are considerable existing barriers to entry. Pitchers says these include the high cost of establishment for prospective new players, particularly considering the expansive geographic coverage required in SA. It’s also exhibiting varied growth patterns across different market segments. The business-to-consumer (B2C) and consumer-to-consumer (C2C) sectors are demonstrating robust expansion, driven by the surge in online shopping.
IN ADDITION TO THE PUDO LOCKER NETWORK, THE COMPANY ALSO INTRODUCED ONE-TIME PIN (OTP) DELIVERY METHODS
Conversely, the business-tobusiness (B2B) segment exhibits a slower growth rate. This divergence can be attributed to the burgeoning adoption of online shopping, marked by an expanding user base, larger basket sizes and repeat purchases. Despite a tough operating environment, Pitchers says the business recorded substantial growth over the past year, with revenues and targets exceeding expectations We remain committed to navigating industry challenges, delivering exceptional service and embracing innovation to meet the evolving needs of customers in an increasingly dynamic marketplace, he says.
Seizing opportunities in an evolving global marketplace
challenges of cross-border e-commerce.
Recognising the intricacies faced by e-tailers in calculating the landed costs, including VAT and duties, we have developed strategic partnerships to automate this process ensuring compliance and minimising transaction delays, he says.
landscape, driving efficiency and customer satisfaction, says Erasmus Shopify recently noted that the average return rate for e-commerce is typically 20% to 30%. The reasons for returns vary from product dissatisfaction, incorrect sizing or discrepancies between the product and its online description. SkyNet s streamlined and innovative returns approval process enables e-tailers to manage returns through a user-friendly dashboard. Consumers are able to request a return of the product purchased directly on SkyNet s Returns dashboard, says Erasmus. The system automatically triggers a notification to the e-tailer who then authorises the return (or rejects it). This seamless process accelerates refunds and ultimately enhances customer satisfaction.”
strategic location of its Hong Kong operations, considered a vital gateway to China and Asia s largest e-commerce market, is providing upstream supply chain solutions for the business-to-business and business-to-consumer markets. The recent partnership with a listed company in Hong Kong and Dongguan, China, specialising in business-toconsumer fulfilment, now provides customers in the growing e-commerce industry with the advantage to capitalise on the cost savings that consolidation creates. It also opens the market for more business-to-business and business-to-consumer entrants into the lucrative African economy. SA is often used as the gateway into the rest of Africa and, with its stronghold in SA, SkyNet is ideally positioned to serve its customers from around the world into the growing lucrative African market. Erasmus says innovation lies at the heart of SkyNet s approach to addressing the
Removing this barrier, especially for the e-commerce industry, now opens international trade for even the small and medium-sized companies looking to grow their business.
According to a recent blog by Wise Systems, last-mile delivery accounts for 53% of the total cost of shipping. SkyNet s approach to omnichannel lastmile delivery solutions demonstrates a proactive approach to reducing re-delivery attempts, in the process reducing costs and enhancing consumer convenience. Some of these last-mile solutions include lockers, counterpoints, secure delivery solutions and even using the kasi economy to reach the wide spectrum of consumers requiring a last-mile delivery option.
By embracing innovative solutions and partnerships, companies such as SkyNet are reshaping the last-mile delivery
INNOVATION LIES AT THE HEART OF SKYNET’S APPROACH TO ADDRESSING THE CHALLENGES OF CROSS-BORDER E-COMMERCE
Realising the cost implication of cross-border returns to e-tailers, the company has also implemented a solution to reduce the costs associated with cross-border returns. Through its Return Fulfilment solution, returned items are graded and nondamaged items are repackaged and remotely warehoused for resell rather than an expensive return to country of origin.
This solution, says Erasmus, not only simplifies the returns experience for e-tailers and consumers but also reduces the costs associated with cross-border returns. It’s a customer-centric approach which not only enhances customer satisfaction but also fosters loyalty and repeat business.
As the global marketplace continues to evolve, we are embracing new opportunities with fervour and agility, leveraging acquisitions, technology and customercentric innovation to navigate the ever-changing logistic requirements of the global market, in the pursuit of growth and success. Most importantly, underpinning all the innovation is our drive to reduce our carbon footprint through technology, following industry best-practice standards to reduce our carbon emissions, says Erasmus.
INSIGHTS 6 BusinessDay www.businessday.co.zaThursday14March2024 COURIER SERVICES Sponsored content Capitalising on SA’s e-commerce growth • Convenient parcel management solutions are key, writes Lynette Dicey Over the past few years, SAs courier, express and parcel (CEP) industry has experienced some consolidation with larger entities acquiring smaller or niche players. This consolidation trend has contributed to reshaping the competitive landscape within the sector, says The Courier Guy CEO Craig Pitchers. The Courier Guy, a leading courier service with an extensive network of delivery partners including a fleet of about 2,000 last-mile delivery vehicles nationwide, kiosks and more than 1,200 pudo smart lockers across the country, was recently 100% acquired by private equity firm Adenia Partners. The Mauritius-based firm says the acquisition is aimed at capitalising on the growth opportunities in the country s last-mile delivery sector, driven by the exponential growth of e-commerce and the introduction of global marketplace giants such as Amazon Marketplace to SA. A RationalStat Report says SAs e-commerce market is expected to reach $16.3bn by 2030, with an annual growth rate of 15%. Statista s Digital Market Outlook estimates by 2027 there will be 37.9-million consumers using e-commerce services, up from 27-million in 2022. A Statista survey revealed that more 70% of respondents mentioned direct delivery to my home as the main driver behind online shopping. Pitchers says the exponential growth of e-commerce,
rising interest rates exert considerable influence on consumer discretionary spending, directly impacting the frequency and scale of online transactions Pitchers says addressing these challenges requires a concerted effort towards enhancing operational efficiencies while maintaining service excellence with lean operational structures.
safeguard both our own and our customers assets in an environment of increasing crime, we have introduced a number of risk mitigation measures. These enhanced security protocols include surveillance, tracking and escort services, which are essential components in minimising operational vulnerabilities. The Courier Guy serves diverse geographical regions from urban centres to remote areas. Pitchers says the way its routes are structured and organised are also crucial in terms of catering to the needs of business-to-consumer clients.
However, despite the persistent demand for online convenience, shifts in consumer purchasing behaviour, influenced by economic variables, pose significant challenges for the industry, says Pitchers. Macroeconomic factors such as fuel prices, inflation and
To
In today s fast-paced global economy where commerce knows no borders, SkyNet Worldwide Express sits at the forefront of embracing new opportunities to meet the evolving needs of businesses and their customers alike. To align with the changing consumer behaviour for whom the world is now accessible, SkyNet South Africa has recently pursued an aggressive acquisition strategy, expanding its presence into the major e-commerce global markets. The acquisition of SkyNet operations in key markets such as Belgium, Germany, Mozambique, Namibia, the UK and, more recently, Hong Kong, has
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ARTIFICIAL INTELLIGENCE
EU moves closer to adopting AI rules
46
Foo Yun Chee
Strasbourg
Europemoved
(AI)
on
EUlegislators endorsed aprovisional agreementfor atechnologywhose use is rapidlygrowing across a wideswatheof industriesandin everyday life.
Thelegislation calledtheAI
Act willregulate foundation models orgenerative AIsuch as
of data to generatenew content and even perform tasks. It will restrict governments use of realtime biometric surveillancein publicspacesto cases of certain crimes, prevention ofgenuine threats,such as terroristattacks andsearches forpeoplesuspected ofthemost serious crimes. Therules willcoverhighimpact, general-purpose AI models and high-riskAI systemsthat willhave tocomply with specifictransparency obligations and EU copyright laws. A total of 523 EU legislators votedin favourofthe deal,while
vanEecke,a partner at law firm Cooley. The EU now has the world s firsthard-coded AIlaw.Other countries and regions are likely to usethe AIAct asa blueprint, just as theydid with [General Data Protection Regulation], he said. However, he said the downside for companies was considerable red tape. The European parliament and EU countries had clinched a preliminary dealin December after nearly40 hoursof negotiations onissues suchas governments use ofbiometricsurveillance andhow toregulate foundation models ofgenerative AI such as ChatGPT. Companies riskfines ranging from €7.5m, or1.5% of turnover, to €35m, or7% ofglobal turnover,depending onthetype of violations. /Reuters
Joe Biden and Donald Trump get their parties’ nominations
• Democrat and Republican leaders set for first presidential rematch in nearly 70 years
Joseph Ax and Alexandra Ulmer
President Joe Biden and former presidentDonald Trumpboth clinchedtheir parties nomination onTuesday, kickingoff the firstUS presidentialelection rematch in nearly 70 years. Biden needed 1,968 delegates towinthe nomination,andhe passed that number on Tuesday night as results began to come in fromthe primarycontestin Georgia,Edison Researchsaid. Results were also coming in from Mississippi, Washington state,the NorthernMariana Islands andDemocrats living abroad. Hourslater, Trumpclinched the 1,215 delegatesrequired to secure the Republican presidential nomination as four states heldcontests, includingGeorgia, the battlegroundwhere Trump faces criminal chargesfor his efforts to overturn the state s 2020 results. There were 161 delegates at stakeon Tuesday in Georgia, Hawaii, Mississippi and Washington state. Biden,81, issuedastatement after he sealed the Democratic nomination,taking aimatwhat he called Trump s campaign of resentment, revenge, and retributionthat threatensthe very idea of America
Votersnow havea choiceto makeabout thefuture ofthis country. Arewe goingto stand up and defend our democracy or let others tear it down? Will we restore the right to choose andprotect ourfreedoms or let extremists take them away?” he said.
Theoutcome ofTuesday’s voting wasessentially predetermined, afterTrump s last remainingrival fortheRepublican nomination,former UN ambassador Nikki Haley, ended her campaign after Trump s dominant performance last weekon SuperTuesday,when he won 14 of 15 state contests.
DRILL, BABY, DRILL Ina videoposted onsocial media,Trumpsaid therewasno time to celebrate, and instead put thefocus onbeatingBiden, whom he called the worst presidentin UShistory. We re going to drill,baby, drill. We re going to close our borders. We’re goingto dothings likenobody has ever seenbefore. And we re goingto makeour nation s economy be the bestever in the world said Trump. Biden faced only token oppositionin the primary campaign, though liberal activists frustrated byhis supportforIsrael s warin Gaza haveconvinced asizeable
minority of Democrats to vote “uncommitted” in protest. Bothmen havealready turned theirattention tothe November 5general election, holdingduelling ralliesinGeorgia on Saturday. In Rome, Georgia, 77-yearold Trumpagainrepeated his false claim thatthe 2020 election was fraudulent and accused the FultonCounty attorney,Fani
Willis,of prosecutinghimfor political reasons. He also attacked Biden for failing to stem the flowof migrants atthe US southern border, anissue he intends tokeep frontand centre throughout thecampaign, ashe did in 2020. The Biden campaign launched a more aggressive phaseon Friday,announcing Bidenwould tourseveralbattle-
INSIGHTS: COURIER SERVICES
Industry faces significant challenges
Coupled with that, it s a peopleintense sector and bargaining
t always be passed on to consumers, says Marshall. Although there are no figures available for the local CEP market, he estimates it is valued at between R25bn and R30bn.
He does not believe the industry has experienced any real growth in the past year but rather some shrinkage. What growth it has seen has come from e-commerce.
E-COMMERCE GROWTH
In fact, one of the most significant trends shaping the CEP industry currently is the growth in e-commerce. However, as Marshall points out, e-commerce is a low margin business and businessto-consumer deliveries are not always straightforward. One of the biggest challenges in lastmile deliveries is re-deliveries
because nobody is home to take delivery of the parcel, raising the cost of the delivery. As a result, says Marshall, courier businesses are making significant investments in technology to mitigate this risk and improve efficiencies. Same-day deliveries are also requiring courier businesses to invest in multiple distribution centres located close to main markets. And despite rumblings that drones will soon be replacing delivery vehicles, that s neither feasible nor practical, says Marshall. While there is a place for drones in certain circumstances, it s not realistic as a mass delivery system. Courier businesses are also having to make substantial investments to improve their security mechanisms. Delivery vehicles and distribution hubs are targets of both opportunistic criminals and organised crime The real targets are high-
value commodities such as mobile phones. Increasingly, we are seeing specialised courier businesses focusing on delivering these high-end commodities, says Marshall. Another danger zone traditionally has been townships. Here, too, courier businesses are
groundstatesamid a$30mad buy. Thecampaign saidit raised $10m in the 24 hours after Biden s State ofthe Union speech, addingto Democrats financial edge over Republicans.
The lastrepeat presidential matchuptook placein1956, when Republicanpresident Dwight Eisenhower defeated formerIllinois governorAdlai Stevenson,a Democrat,forthe second time.
This year,voters have expressed little enthusiasm for a repeat ofthe bitter2020 election, withReuters/Ipsos public polls showing bothBiden and Trump areunpopular withthe majority of voters. Trump s myriad criminal charges he faces91felony countsacross fourseparate indictments could harm his standing amongthe suburban, well-educated voterswhose supporthe hashistorically struggled to garner.
He is scheduled to become the firstformer American president togo ontrial ina criminal case onMarch 25 in New York, wherehe faces charges that he falsified business recordsto hidehushmoney payments to a porn star. Themost seriouscase against him is generally thought to be the federal indictment in
Washington, DC,accusing him of plotting toreverse the 2020 election.Butthe caseisonhold afterthe USSupremeCourt agreedto hearTrump s claimof presidential immunity,and itis unclear whether atrial can take place before Election Day. Biden has been dogged by the perception among amajority of votersthatheis toooldtoserve a second four-yearterm, though allies believe his fiery state of the union address mayserve to counter that notion.
MIGRANTS
The ongoingcrisis atthe USMexicoborder, whereaninflux ofmigrants hasoverwhelmed the system, is another weakness for Biden. Hehas sought to transfer theblame toTrump after the former president urged congressional Republicans to kill a bipartisanborder securitybill that would have stepped up enforcement.
The economy, asalways, will be a central campaign issue. Biden has presidedover an expanding economy, with inflationarypressure easingand stockshitting all-timehighs.But pollsshow Americansunwilling tocredit thepresident andfrustrated about high prices of items like food in thewake of the pandemic. /Reuters
Post Office ‘unlikely’ to trouble sector’s market share
delivering packages weighing 1kg and less.
Garry Marshall, CEO of the SA Express Parcels Association (Saepa), says it is unlikely that the Post Office s business rescue practitioners will be fighting for the Post Office to get a share of the courier industry s market. The matter is in something of a holding pattern for now, he says.
The Covid period proved the value of the courier industry. While the Post Office closed down during the pandemic, the courier industry continued to provide a much-needed service during the period, he says.
INTERNATIONAL 7 BusinessDay www.businessday.co.zaThursday14March2024
The South African Post Office s dire financial position continues to cast doubt on its future sustainability or its ability to successfully take on the courier industry. In 2018, the Post Office claimed that it had the exclusive rights to deliver packages weighing 1kg and less based on the Postal Services Act. This assertion was strengthened by a 2019 Icasa order which held that courier company PostNet was in contravention of the Postal Services Act. The local courier and express parcel industry, together with e-commerce stakeholders, has previously warned that this could spell disaster for both the courier industry and e-commerce players. However, in early 2023 the Post Office was placed in provisional liquidation with cabinet subsequently approving that it be placed under voluntary business rescue. Prior to the Covid-19 pandemic there were about 1,300 Post Office branches around the country. Since then, more than 300 branches have closed The organisation has not made a profit since 2004. Its business rescue practitioners have said the Post Office s lack of investment into its IT and data centre infrastructure, inefficient mail processing equipment and unreliable logistics fleet make it difficult for it to meet the needs of customers. In December 2023, a business rescue plan was approved by the majority of creditors. The plan includes reducing the number of Post Office branches to about 600, cutting staff numbers and repurposing the state-owned entity but makes no mention of
Like most industries, a weak economy is having a negative impact on the courier, express and parcel (CEP) industry with poor business and consumer confidence impacting demand for courier services. The CEP industry tends to act as a reliable barometer for the state of the economy, says Garry Marshall, CEO of industry association the SA Express Parcels Association (Saepa). Supply chains are driven by consumer demand and when the economy is depressed and consumers have less disposable income, the demand for goods reduces. This impacts the CEP industry and is reflected in sluggish growth of the sector. Most courier businesses are struggling with higher operational costs, revenue bases that are not growing and tighter margins. In addition to rising fuel and air freight costs, the sector is also grappling with inflation and high interest rates.
mandatory increases
councils are imposing
which can
innovative
subcontracting last-mile deliveries to local operators who are familiar with the area and are better positioned to navigate potential crime hot spots. As the industry faces increased pressure on the environmental and sustainability fronts, Marshall predicts more courier firms will start to trial electric or hydrogen- powered vehicles. DHL Express, for example, plans to have 12 electric aircraft to transport regional cargo by 2027. The company says that with sustainable solutions already in place for much of its
delivery, its order of 12 e-cargo aircraft represents an investment towards its overall goal of net zero emissions logistics
range and payload capacity of these electric aircraft will allow the company to reduce its carbon emissions on feeder routes in environments currently serviced by piston and turbine aircraft. The e-cargo planes will also require less investment in station infrastructure with quick charging times of less than 30 minutes per flight hour, meaning that the aircraft can be charged while loading and unloading shipments. DHL Express has made a decision to use a blend of technologies and sustainable solutions that collectively contribute to its commitment to clean operations. Not only is its last-mile network increasingly being electrified, but it s also using bikes for local delivery.
PLAN INCLUDES REDUCING
NUMBER
POST OFFICE BRANCHES TO ABOUT 600
coming up with
solutions including
last-mile
The
THE
THE
OF
intelligence
closertoadopting the world s first artificial
rules
Wednesdayas
Microsoft-backed
are trainedon largevolumes
OpenAI that
were againstand 49 abstained Iwelcome theoverwhelming support fromthe European parliament forthe EU AIAct, the world’s first comprehensive, bindingframework fortrustworthy AI. Europeis now a global standard-setterin trustworthy AI, EUindustry chief Thierry Breton said. EU countries areset to give their formal nod tothe deal in May, with the legislation expected to enter intoforce in early 2025 and applyin 2026, though some ofthe provisionswill kick in earlier. Brussels could have set the benchmark for the rest of the world,saidPatrick
Smears and lies: US President Joe Biden and former president Donald Trump are heading into the November 5 election with the economy as the central issue. /Reuters
BRUSSELS COULD HAVE SET THE BENCHMARK FOR THE REST OF THE WORLD, SAID A PARTNER AT LAW FIRM COOLEY
