Part 108 costs buffet already stressed industry

The new Civil Aviation Regulations, set to come into effect on July 1 this year, will have huge cost implications for companies in what is arguably already one of the toughest economic times in decades. Part 108 of the Civil Aviation Regulation, which deals with safety and security issues, will affect cash flow of express courier services as compliance means spending money, says Gary Marshall, CEO of the South African Express Parcel Association. “Becoming a regulated agency will mean training staff, getting premises up to speed and investing in X-Ray equipment, an investment that can run into millions. This is all happening at a time when cash is very tight and payment for our services is often treated with disdain as it is seen as a grudge purchase resulting more often than not in payments being delayed.” Marshall said while the express courier and cargo industry was not in disaster mode yet, keeping afloat would become a challenge as the impact of the economic crisis continued to hit home. “Economy-type air cargo has lost out to road as it is now being transported rather by vehicle than aeroplane. Companies are slowly but surely restructuring themselves to cope with the new reality as volumes are down by at least 20%.” He said while the bottom end of the market was bleeding, there had been a surge at the top. ”Sameday express services have increased and this we believe is due to the demand on the supply chain. As stock is kept low goods have to be moved fast when there is a demand.” He said while the supply chain in some instances was being rebuilt, it was all about being ready when the economy changed. “We have found in the meantime that as the regular supply chain has slowed down, courier services have been increased as an emergency back-up.”