Understanding How Transportation & Freight Works – Part 2/3

Welcome back to another edition of DID YOU KNOW? – where we breakdown everything business and finance simply for SMEs to understand. This week we are taking a look at the transportation and freighting industry of South Africa which small business owners can leverage for economic growth.  Sit back and enjoy this in-depth miniseries which highlights the online shopping sector and how the different service providers work together to bring their products and services o every South African.

Transportation and freight without online and retail stores to sell a product are like ice-cream without the milk to make it. The sector employs one million people directly and indirectly in multiple areas of the industry so we will focus on the online section of this industry as it has more data available to showcase how big its contribution is to the South African economy every year.

For additional information click here to view the whole PDF document: http://tgh.co.za/wp-content/uploads/2017/10/wwf_transport_employment_brief_online.pdf

In Part 1 we looked at the figures of online shopping as well as buying trends with different South African demographics. Now in Part 2, we will dive into how the back end of how all this works to better understand the industry and how small business can find opportunities to leverage their skills in being part of the sector and find out who the big players in town are that seek to outsource to the online world.

• E-Commerce’s Platforms
• Large and Small Couriers Company
• Warehousing, Air, Sea, Railway and Road Freight

History

The first recorded movement of goods is in Egypt while constructing The Great Pyramids. They used many methods of transportation to carry their construction goods from long distances. As per ancient records, the first organised courier services were done in Egypt in 2400BC. In this courier service, runners carried carved stones as the message from one point to another.

In ancient times, delivering parcels or packets wasn’t as easy a task as we see it in present times. We were dependent on animals and birds to deliver mail. The main animals to send parcel and important message were Horses, Camels, Bullock carts, and dogs

In the present time, the US in 1775, Paul Revere rode through Lexington to pass the message to the residents. Another example is in the revolutionary war when Ann Hennis Trotter Bailey (Mad Ann) rode 100 miles from Fort Clendenin to Fort Savannah to bring gunpowder.

Next Courier services were seen in 1852 in the US when Well Fargo was built. In this expedition, Gold and other items were moved to newly established territories by a well-known company. In 1860, Pony Express was built to provide courier services of mail and small packages in St. Joseph, Missouri, and Sacramento, California. Pony Express covered approximately 2000 mile routes in 10 days. But the company got sacked on the invention of telegraphic services in 1861.

In conclusion, the Courier Industry is as old as our first civilization. In ancient times, courier services and important messages were delivered with the help of animals and birds respectively. In ancient history, messages and parcels were hand-delivered using runners, homing pigeons, and riders with horses, camels and bullock carts, stagecoaches, trains, bicycles, automobiles, and finally an aeroplane.

For additional information click here: https://bhadotri.com/history-of-the-courier-services-industry/

List of the Biggest Courier Company in South Africa

• The Courier Guy
• Globeflight
• Fastway
• Time Freight
• Dawn Wing
• Door 2 Door
• PostNet
• Courier It
• City Logistics
• Ram Hand to Hand

How much does it cost to courier packages in South Africa?

Courier service pricing in South Africa depends on several factors like how fast you want your goods delivered, which means of transport is used, and which company you use.  Fuel prices, vehicle insurance, and employee salaries are among some of the contributing factors.

What is the main mode of transportation used to deliver packages?

• Sedan’s
• Vans
• Bakkies
• 1-Ton Trucks
• Motorbikes

What is the best courier company to use for my small online business?

• The Courier Guy
• Fastway
• Dawn Wing
• PostNet

How do I know what company to use when starting?

The answer to that question is easy when you break it down using the following thought pattern to make proper data-driven decisions:

• How big the courier company routes are (Regional and National)?
• How many people does it employ?
• Does it offer you a wide range of price offerings?
• Does the courier company have an excellent customer service centre?
• And last but not least does it use digital technology?

By using these questions as the basis of your decision-making on which courier company is right for your small business then you are on the right track to becoming an online e-commerce shopping platform for customers to buy and receive your products.

What are the hidden cost of courier services?

I have highlighted a few hidden cost orse should I rather say a detailed list of what you are paying for when using a courier company it is known as a “Surcharge” and it can make or break your decision when deciding which courier company to use:

• Changing the order details
• Additional handling
• Corrections on the order details
• Dangerous or delicate goods
• Extended and remote areas
• Residential areas
• Pick-up or delivery reattempt
• Package rerouting
• Undeliverable shipments
• Peak season surcharges
• Storage in the warehouse
• Custom clearance surcharges

I have provided a link to an article that can best explain the above list in greater detail for you to understand so click here: https://www.eurosender.com/blog/en/surcharges-for-courier-services/

That is a wrap for part 2 of our three-part miniseries into the transportation and freighting industry within South Africa. It was important to cover this topic as e-commerce is the catalytic driving force that makes up the major share of the industry.  Understanding e-commerce websites adds context to Part 3 of this miniseries and how small businesses are going to benefit from the long-term growth of this sector as well as shedding light on the supply chain that makes up the surface of the industry. Stay tuned for the next chapter of our amazing in-depth miniseries.