The move will involve the community, and is designed to keep Aramex nimble. (Image via Aramex)
The person who delivers your next Aramex package could be your neighbor.
Shipping giant Aramex is preparing to roll out a pair of mobile phone apps that promise to bring clients and couriers closer together, as the company tests a crowdsourced package delivery service in five countries.
One app is for couriers, the other for clients, but it’s the former which is causing a stir.
If all goes according to plan, anyone from the community could be that courier. He or she could be a teacher on break, or a university student in between his classes or even your retired neighbor.
A number of companies in recent years have adopted the crowdsourcing business model popularized by Uber. In Aramex’s case, the move is designed to make the company more nimble, increase efficiency and remain asset-light.
Aramex’s couriers are currently paid a fixed salary regardless the number of packages they deliver. Under the new model, they will be paid per package delivered. New couriers will have to go through a screening process and customer interaction training before they're allowed to make deliveries.
Mobile technology is at the heart of Aramex's new community-based deliver model. (Image via Qatarmark)
On demand resources
Rather than a cost-saving measure, COO Iyad Kamal stresses that it’s designed to help Aramex react quickly to changes in demand.
“You upscale and downscale based on volume,” Kamal notes. “Why should I pay fixed costs when I can pay on a per package basis?”
“It will introduce efficiencies,” he adds. “We will be able to deliver more packages on infrastructure we’re setting up. More packages means unit costs will go down.”
The decision to keep assets to a minimum is a deliberate one, Kamal said. Unlike other major shipping companies, for instance, Aramex does not own any aircraft.
“We’re not an asset-based company,” Kamal said. “Why have an asset when you can be non-asset-based and not have such a big depreciation on your books? Why should I buy a plane when I can utilize planes and pay per kilo?”
That philosophy is clearly behind this latest move, as the company invests $20 million in the new technology this year.
“Technology is going to be a major, major, factor on the way we operate,” Kamal said. “You have tech and you have resources. How can you utilize resources further capitalizing on technology?”
Aramex sees huge opportunities in the Middle East and Africa. It invested $23.2 million in a number of facilities in Egypt over the last three years and acquired South Africa’s PostNet for $16.5 million last December. More recently, it acquired Australia’s Mail Call Couriers for $33 million.
Launched in 1982, Aramex was the Middle East’s first courier company. Fifteen years later the company got listed on NASDAQ, making it the first Arab-based company to trade its shares on an American stock exchange. Today Aramex is listed on DFM (Dubai Financial Market), has nearly 14,000 employees and is present in 60 countries.