South African third-party logistics (3PL) operators and related service providers spend, on average, at least 50% more on last-mile logistics than peer companies operating in other countries – to secure couriers and cargo against hijacking.
This has been found by logistics technology company FarEye, an innovator specialising in the last leg of delivery.
According to co-founder and CEO Kushal Nahata, operators have no choice but to compensate for the high risk of crime where as many as 25 couriers are hijacked every day.
With the online shopping-spree madness of the end of November approaching, fears are that the usual rate of hijackings involving courier companies could substantially increase.
Data accumulated over the years by Tracker shows that vehicle crime tends to escalate as year-end approaches.
The vehicle security service provider has found that companies run twice the risk of hijacking incidents at this time of year. It also adds that about 55% of all vehicle crimes in South Africa involve hijackings.
Earlier this year, Garry Marshall, who heads up the South Africa Express Parcel Association (Saepa), said on average at least 1000 e-commerce parcels entered South Africa every day, but that Saepa had recorded a monthly momentum increase of about 60 000 parcels in the run-up to Black Friday.
During November, he said it was anticipated that upwards of 230 000 parcels would be imported to satisfy e-com consumers.
Tracker, meanwhile, has found that fast-moving consumer goods are top of the list of hijackers – with alcohol, clothing, groceries, domestic appliances and items predominating online purchases, especially high-tech commodities.
The information assimilated by FarEye was done during an initiative that involved brainstorming last-mile issues along with some retail brands such as Woolworths, Pepcor Lifestyle, Pick ’n Pay, Clicks, Premier Foods, Massmart and Home Choice.
Security and running costs, especially fuel, were identified as some of the most pressing last-mile expenses faced by service providers.
A composite breakdown of the last-mile sector also shows that about 60% of service providers use subcontracted couriers, while 20% are own-fleet operators. The remainder use 3PL and alternative means such as own transport, where possible.
FarEye said the session they had with retailers confirmed what they suspected, that there was rising demand for innovation around last-mile delivery challenges in South Africa.
SOURCE: Netwerk24
