From coffins to half a car — South Africa’s online shopping boom boosts couriers

South Africa’s courier industry is growing rapidly thanks to an explosion of e-commerce activity, including intensified competition from international giants like Amazon, Shein, and Temu.

According to market research firm Mordor Intelligence, the local courier industry’s value is set to increase by around 7% per year up to 2030, when it will be worth an estimated $316 million.

This increase is being driven by an online shopping boom.

World Wide Worx’s Online Retail in South Africa 2024 report found that the value of e-commerce sales increased 29% from R55 billion in 2022 to R71 billion in 2023.

Both local and international players rely on couriers to ensure they can get their products to customers quickly and in good condition.

One of the major couriers benefitting from this increased online sales activity is The Courier Guy, which also handles deliveries for Amazon.co.za.

The company’s marketing manager, Simon Hill, recently told Rapport that the increased activity has created an opportunity for reliable courier services to offer small businesses, entrepreneurs, and individuals the ability to reach more customers.

Hill explained that the company often delivered unconventional items.

Among the most unusual of the 17.5 million packages that The Courier Guy’s 2,500 drivers delivered in 2023 were canoes, coffins, plants, half a car, and the rear part of a bakkie.

It also had to hire a larger truck to transport a fully-fledged pump system from Gansbaai to Pretoria.

In addition to on-site deliveries, The Courier Guy has rolled out more than 1,200 Pudo pickup lockers and offers 200 pickup kiosks across the country.

Using this option is more affordable as it costs the courier less to deliver multiple packages to specific locations along regular routes rather than catering to individual customers’ needs.

The Courier Guy and other companies like it have also invested significantly in improving their logistics—both in terms of package sorting and optimised transport—to reduce delivery turnarounds while achieving cost efficiency.

Private couriers have capitalised on the failures of South Africa’s once dominant postal service — the South African Post Office (Sapo) — which has, in recent years, moved to enforce a state-sanctioned monopoly on small parcel deliveries.

The Postal Services Act determines that all letters, postcards, printed matter, small parcels, and other postal articles weighing less than 1kg and which can fit in a rectangular box of certain dimensions must be delivered by reserved postal services.

The only entity with a licence for providing such services is the Post Office.

Former communications minister Mondli Gungubele, now deputy minister, recently extended Sapo’s exclusive right to deliver such packages to 1 April 2025.

If the regulation were enforced, it would have disastrous consequences for e-commerce delivery times in South Africa, as Sapo has an infamous reputation for losing packages and delayed deliveries.

Among the plethora of products that would be impacted by the regulations are small tech devices like smartphones, smartwatches, and wearables.

MyBroadband has put Sapo to the test and found its delivery turnaround to be shockingly poor compared to private couriers.

The latter can often deliver a package on the same day or the day after receiving it from the retailer or other sender.

Sapo took between six and 57 working days to deliver three parcels we shipped between Centurion in Gauteng and Port Elizabeth in the Eastern Cape.

A fourth parcel never reached its destination and was eventually sent back to its origin after a detour through Durban.

Our tracking of these packages indicated that sorting or administrative issues at its offices seemed to be a major problem.

Our experience was still better than a Durban family that waited 13 years to receive a package sent via Sapo from New York in 2010.

Sapo simply no longer has the capacity to deliver the volume of small parcels that private couriers handle promptly, and its dire financial situation makes scaling its capabilities impossible.

Among its proposals to address the issue is that courier companies pay an “agency fee” for the right to deliver the parcels falling under reserved postal services.

However, the validity of such a fee is doubtful, considering Sapo’s only contribution to the success of these couriers is its failure.

Sapo’s status as the only reserved postal services licensee could also face a significant legal challenge as it has not been meeting its licence requirements.

Its mail delivery performance percentage — a figure that shows what portion of its deliveries were within claimed time frames — has been below the required threshold for several years.

In Sapo’s most recent annual report for the 2022 financial year, the figure stood at 68.36%, well below the Independent Communications Authority of South Africa’s regulated standard of 92%.

In the three preceding years, it was 86.7%%, 89.3%, and 52.95%, all below the standard.

Newly appointed communications minister Solly Malatsi has hinted at partially privatising the entity or seeing it partner with private companies to ensure it can be highly competitive.

“We are convinced that Sapo can still operate optimally,” Malatsi said in his 2024/2025 budget speech.