Delivery expense stymies e-commerce growth

E-commerce represents a
huge growth opportunity in
South Africa, and Africa as
a whole, but
the associated
costs around
deliveries
need to be
addressed
through
innovative
solutions
across the
supply chain,
according
to Garry
Marshall,
managing director of BidAir
Cargo and CEO of the South
African Express Parcel
Association (Saepa).
“Currently, e-commerce
deliveries cost a fortune.
Aside from
the transport
costs
(airfreight or
roadfreight)
it takes an
average of
two to three
attempts to
deliver as the
recipient is
often not at
the declared
delivery
address the first few
times,” explained
Marshall, pointing out that
innovations such as drone
deliveries for the last leg of
the delivery, drop boxes at
select 24-hour retail outlets
or even global satellite
positioning (GPS) targeted
deliveries needed to be
explored to bring down the
costs.
Speaking at the
Council for Supply Chain
Management Professionals
Roundtable Discussion in
Johannesburg last week,
Marshall said that businessto-
business traffic was no
longer the dominant player
in the express industry and
that, even in South Africa,
it had been taken over by
e-commerce parcels to
individuals.
According to Marshall,
South Africa has large
distances to cover for many
e-commerce deliveries but
relatively small amounts of
product that are currently
being delivered. He pointed
out that if stronger networks
were built and there was
denser coverage by the
e-commerce supply chain
players, the delivery costs
would be much lower.
“Another trend that is sure
to impact e-commerce in
South Africa is the ongoing
mergers and buy-outs in the
express industry – the latest
being the TNT Express buyout
by Fedex. The key issue
to emerge from this will be
a focus on network growth,”
he said.
Responding to a question
about the African market
and its limited use of
traditional e-commerce
payment methods (such
as credit cards), Marshall
noted that the continent had
been “quite inventive” in its
development of alternative
online payment methods.
“The ease and accessibility
is there, it’s simply a matter
of now establishing the
networks.”
INSERT & CAPTION
Currently,
e-commerce
deliveries cost a
fortune.
– Garry Marshall