CAPE TOWN // The Dubai-based logistics company Aramex has provided an unexpected lifeline for a businessman who lost everything when he fled war-torn Libya to find refuge in South Africa.
Abdallah El Khoury, originally from Lebanon, was forced to flee the conflict, together with his South African wife Danette, nearly six years ago.
“We really had to leave everything behind,” says Mr El Khoury, 45. “We hadn’t planned on moving, but it was one of those life events, and we couldn’t stay. So we came to South Africa.”
The couple settled in a sleepy coastal town called Sedgefield, on the edge of a lagoon in the heart of a stretch known as the Garden Route on South Africa’s southern coast.
“It’s so beautiful here – green, safe and peaceful.” The lushness of the area attracts tourists from the world over, and it’s a good place to raise a family, but one thing it lacks is jobs.
After their arrival the couple struggled to rebuild their lives. Mr El Khoury has a degree in IT and more than a decade of experience with Pepsi in Dubai. He has also spent time in West Africa, but none of these skills were enough to land a job in a country where one third of the workforce is unemployed.
Instead, he opted to put his and his wife’s travel experience to use. They began an online store, importing goods from the Far East – spices, herbs, clothing, shoes and other exotic items.
“It was cheap to start, little overheads or infrastructure and easy to manage.”
They began ordering from suppliers and goods arrived via the South African Post Office (Sapo) about six weeks or so later. Orders arrived regularly and they were able to dispatch goods in timely fashion. The business began to thrive.
Then, in late 2014, postal workers countrywide went on strike. The stoppage continued off and on for a year and the service all but collapsed. Social media was abuzz with images of the country’s main international postal depot inundated with piles of stranded parcels, inbound and outbound.
Eventually, the South African government, which owns Sapo, sacked its management and sent in a crisis team to run the ailing company.
The postal service is slowly being rebuilt but it will be some time before consumers return. Its operations remain erratic and it is still struggling to meet its debts, as well as to pay staff on time.
Meanwhile, to save his business Mr El Khoury needed a shipper. Premium couriers operate in the country but their costs are prohibitive for small, low-value impulse purchases. For much of 2014, petrol prices were at a two-year high, having soared about 30 per cent from 2012, and those increased costs were being passed on to most couriers’ clients.
Pondering the problem as he drove into a nearby town running errands, Mr El Khoury spotted a name he was familiar with from his years living in Dubai – Aramex.
“Funnily enough, I own shares in Aramex. I bought some when they launched their initial public offering in 2005,” he says.
“So it’s a company I’m more than familiar with. I pulled over the car and went to talk to the lady running this depot. She arranged that I receive an Aramex drop box in Sedgefield, which I could use for my own business but also to service others in the area who were left without a postal service.”
The drop-box is literally that – a red plastic bin that serves as a collection point. Consumers buy a sleeve that can hold documents and lightweight objects such as clothing. The cost is 99 rand (Dh22) per bag, and it comes with a guaranteed overnight delivery to the receiver’s doorstep.
In the time since, Mr El Khoury has become known to the 5,000 or so Sedgefield locals as the way to get items in and out of town.
For this service Mr El Khoury charges an additional fee based on the size of the package, and the drop box means he has been able to continue his import business unfettered.
Aramex launched in South Africa in 2011, through a series of acquisitions of local logistics companies. The drop box concept really got going with the postal strike, and today they can be found by the hundreds around the country. The national retail chain Pick n Pay has about 400 alone in its stores.
In 2014 Aramex bought the local chain PostNet, for US$16.5 million. PostNet consists of about 300 stores, serving 60,000 customers daily across the country offering services including courier, copy, digital print, stationery, mailboxes and more.
The acquisition is part of an ongoing expansion of Aramex’s global operations. The Dubai-based chief executive Hussein Hachem says that the group will continue to grow across Asia, the Middle East and Africa. Last month Aramex bought Fastway Couriers’ New Zealand and Australian businesses for $80.59m.
“These acquisitions will help us increase our presence in growth markets,” says Mr Hachem.
The steady expansion of the African middle class, and the growth in demand for imported goods that need a reliable logistics chain, means that demand for courier services is likely to be strong.
According to rival courier firm DHL, the outsourced logistics market in Africa has grown nearly 40 per cent in the past four years.
South Africa is a good place to start for companies wanting a foothold on the continent. It has good road, rail and port infrastructure. Elsewhere in Africa, poor roads mean transport costs average 14 per cent of the value of exports compared with 8.6 per cent in all developing countries. For landlocked countries transport costs can be higher than 50 per cent of export value, according to the World Bank.
For providers such as Mr El Khoury, infrastructure makes all the difference.
“The roads here are good and getting things moving is easy,” he says. “Overall, it’s a good place to do business. I think we will be here for a while.”
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