Where have all the mediums gone?

With the waves of consolidation

hitting the parcel delivery industry, one

interesting consequence is that in South

Africa the market now comprises the

big operators and the small operators

with little in-between, says Garry

Marshall, CEO of the South African

Express Parcel Association (Saepa).

He says this may be because small

companies have low overheads, and

without corporate rule books can act

“fast and lean”. According to him, they

tend to be niche players with saturation

coverage of a chosen local area or they

have specialised expertise in handling

certain commodities such as cold-chain,

high-value, fragile or fashion items.

“The large companies have

economies of scale and can absorb

overheads such as security and

regulatory compliance by spreading

the costs across a broad client

portfolio,” says Marshall, noting that

these are major inhibitors for the

smaller operators and would curb

their growth.

“The big issue driving everything

is network. It’s a critical asset.

Setting up operations in numerous

outposts is unaffordable without

huge volumes feeding the system.

Small operators tend to sidestep it

through the use of alliances. Larger

operators can extend their network

and intensify coverage in local areas

by acquisition.”