Plans by online retail giant Amazon to slash standard two-day delivery times to next day will put tremendous pressure on the airfreight sector which is struggling to keep up with unprecedented e-commerce growth. Whilst Amazon has already announced next day delivery across the US, it has yet to launch this shorter delivery time globally, but has confirmed it is working on coming up with a similar initiative for its international customers. “Online shopping is growing exponentially and shows no sign of slowing down,” says David Alexander, general manager at Professional Aviation Services. “Add general e-commerce activities to this and you have logistics demand that will be difficult to predict and even more difficult to service. Amazon is not the only one; there is massive competition particularly in the East.” In South Africa e-commerce companies are becoming increasingly popular with steep upward growth trajectories. “We need to differentiate between “last mile” deliveries in large towns done by companies like Mr Delivery and the movement of stock and purchases between centres. These mostly go by air and are almost 100% handled by the courier and express operators,” says Alexander. “This means that systems, procedures and processes have to be tailored to screen, process and handle this cargo safely and securely, which is challenging because operators are often not aware of the content of shipments. This, for example, causes many shipments of dangerous goods to be shipped without proper packaging, loading and handling.” Going forward, says Alexander, the air cargo industry will have to increase investment in terms of capacity for deliveries and the development of new ways of doing business, new systems and new technologies. “The air cargo sector is very good at what they do and there is capacity at present,” he says. But as the Amazons of this world move more goods, more often and in shorter time, air freight companies around the world will have to keep up. “Delivery costs may increase but so will rates, so returns should theoretically be maintained. A feature of the online shopping is that generally people who shop online want the goods immediately and are therefore prepared to pay premium rates,” says Aleander. E-commerce is one of the fastest growing sectors and the air cargo industry is already adapting and designing systems to cope. The courier and express industry is very strong in South Africa and we are geared to grow the systems, processes and capacity to service the growing demand.”
Delivery costs may increase but so will rates, so returns should theoretically be maintained. – David Alexander
