With over 50% of African online purchases sourced from suppliers outside the shopper’s country there is a need and an opportunity for express freight companies to provide customs clearing services and advice.
Customs departments around the world are struggling to keep up with what Ana Hinojosa, director of compliance and facilitation at the World Customs Organisation (WTO), describes as a “tsunami of small packages to the doorsteps of customs administrations around the world, either in the postal environment or in the express courier environment.
“Cross-border e-commerce has led to a tectonic shift in the supply chain – where distribution of goods is now taking place prior to the importation, in a departure from the traditional supply chain where the distribution takes place post importation,” she says.
The growth in e-commerce is reflected in the International Air Transport Association (Iata) statistics. Commenting on the February 2018 statistics (the latest available), Iata economist David Oxley writes: “African airlines fly less than 2% of global FTKs (freight ton kilometres) but topped the international FTK growth chart in February for the 17th time in 18 months.”
Most of the growth is in traffic between Africa and Asia. While Oxley attributes this to growth in Asian investment in Africa, there is also a rapid increase in African online purchases from Asia – which, in turn, has created spin-off business for courier and express freight companies.
According to the KPMG 2017 Global Online Consumer Report, African online shoppers make an average of 11 purchases a year, with the majority being cross-border because the goods are not available locally.
South Africans are among the biggest fans of “e-tailers” such as Taobao, Alibaba or Amazon, with 60% of online purchases being made from these outlets. South African courier and express freight companies are vying for their business, with at least one differentiating itself by claiming to be able to deliver to townships and rural areas.
Most of the bigger express freight companies advertise that they provide customs clearing services. Some pay the customs duty on behalf of the client and add the cost to the bill. However, this service comes with the warning that the customs duty in South Africa could be more than the initial cost of the goods. But consumers presumably have the advantage of experienced clearing agents handling their parcels.
In contrast, users of the South African Post Office complain that there appears to be little consistency in the levying of customs duties. According to the South African Revenue Service, the declaration used to clear goods through the Post Office consists of “any form of label affixed to or completed by the sender in respect of the postal item, giving the description of the contents and value”.
Post office parcels are assessed at OR Tambo International Airport, Cape Town and Durban. Shoppers picking up parcels at the Post Office therefore find it difficult to challenge the charges being levied. There seems to be a gap for a courier or express freight company to offer a service that provides online shoppers and exporters with accurate estimates on customs duty, and which ensures that the goods are under the correct tariff code.
“In this diffused and more direct e-commerce supply chain, there is a need to create awareness about potential risks and promote compliance with various regulatory requirements by e-sellers and consumers. It's also important to make information available, preferably through a single access point on websites for a new and emerging class of buyers/ sellers,” says Hinojosa.
