CONSUMERS shipping packages through local courier companies are likely to experience delays over the upcoming festive season, as couriers grapple with pressures from a surge in e-commerce volumes extending from the Black Friday weekend.
Package volumes have doubled year-on-year, according to president of the E-commerce Couriers’ Association Dr Mark Gonzales, a telltale sign that this festive season is shaping up to be a busy one for courier companies.
Khary Robinson, chairman of Mailpac Group, on Wednesday told the Jamaica Observer that the company has hit an annual record in packages arriving at its Miami office just days after the Black Friday sales event. The data confirms that Jamaicans weren’t only looking to capitalise on in-store deals, but went bargain-hunting on popular e-commerce platforms such as Amazon, FashionNova and Shein.
Earlier this week, J.E.T.S. Limited, which is an electronic banking service company operating Jamaica’s national debit card network that trades as MultiLink, released data that on Black Friday transaction volumes rose to $2.6 billion to hit a record high over the course of 2023. The company forecasts that pre-Christmas shopping will rise even higher to between $2.6 billion and $2.7 billion in point-of-sale and ABM transactions.
The buzz around Black Friday shopping this year seemingly caught Robinson off-guard. He described consumers’ interest in the weekend-long sales event as “unique enthusiasm”.
“We have seen an uptick from before Black Friday as online sales kicked in early, and that ramped up to an annual record number of packages arriving between Tuesday and Wednesday. This trend is typical in our business, but there seemed to be a unique enthusiasm around Black Friday this year,” he told the Caribbean Business Report.
Newcomer to the courier business Brown Box has also recorded an uptick in arrivals, General Manager Carey Lue-Pann said, pushing the company closer to its parcel target for year one.
The surge in consumer packages means business is booming for the courier service industry, but that has its downsides, Gonzales said, as the volumes will cause delays due to the overcapacity pressures on the main cargo carrier to Jamaica: Caribbean Airlines.
“The delays don’t usually come from the couriers’ business itself, its more the operators’ dependency on Caribbean Airlines to get the goods on the island. Just imagine the pressure that will be on the airline that if you’re moving from say 40,000 kilos to 80,000 kilos,” Gonzales explained.
He added that the majority of the 120 players across the industry has contracted Caribbean Airlines as their cargo carrier largely based on the airline’s affordable rates and typical speedy delivery.
On average, goods ordered by consumers through the e-commerce platforms are shipped to the courier company’s forwarding service in Miami and then to Jamaica within two weeks, depending on the service provider. But Gonzales says that consumers should expect to wait two times the usual waiting period based on the surge in package volumes.
“There may be slight delays this year, and I say may, because Caribbean Airlines has committed to increasing the number of days that it carries cargo to Jamaica,” he said. “Usually, we get cargo three times per week, but they have committed to increase that to five days a week, or even more if necessary.”
Nevertheless, courier companies have been putting measures in place to ensure the swift delivery of goods when the packages arrive on the island. The measures span from automated logistics processes, increased store network, increased staff complement and the roll-out of locker services.
“During COVID we overbuilt capacity to sustain any surge, as the initial one of 2020 caught us off guard. Accordingly, we have the people, processes and infrastructure to seamlessly handle the expected volumes as was seen by our customers last year who enjoyed curbside package delivery, free home deliveries, locker deliveries and quick service in our island wide locations,” Mailpac’s Robinson said.
To woo new clients, Brown Box, which is a subsidiary of Hardware & Lumber Limited (H&L), has been pushing its ‘no service fee’ promotion and last week began advertising free delivery to Portmore, St Catherine.
“This is a highly saturated and competitive market, so we are trying to differentiate ourselves. Portmore [is a] massive market and we want to capture as much business as we possibly can in that area,” Brown Box Operations Manager Leah Ranger said.
Today, Brown Box has four locations, two of which are in Kingston and the others in Ocho Rios and Mandeville on H&L properties. It’s looking to do the fifth location in Portmore during the first quarter of 2024.
Brown Box has been pushing its niche service of shipping in large items such as refrigerators, stoves, washing machines and vending machines, a service that has attracted quite a number of business clients. But, according to Ranger, retail consumers purchasing items below the current free-on-board (FOB) value of US$50 still dominate the revenue flow.
It anticipates further growth in its volumes from the Government’s decision to increase the duty-free threshold on personal items from US$50 to US$100 during the next fiscal year that begins on April 1.