Aramex plans to move more drivers to a variable work schedule as the Dubai-based courier and logistics company streamlines its operations.
The company on Monday reported a 37 per cent rise in full-year profit for 2016, helped by acquisitions and rising demand for online shopping.
The delivery firm wants to drive down the fixed costs of its 18,000-strong global workforce by using “Uber-like” technology and practices.
Aramex regards having a delivery fleet sitting idle at times of low demand as costly and wasteful.
It launched a mobile app in Dubai in April that allows anyone registered to become an Aramex courier.
The app allows the firm to hire more couriers in times of high shopping demand. Aramex wants to have an extra 30 per cent of its couriers on a variable schedule by the end of the year.
“While we had a very good year showing a 37 per cent rise in profits, that was because of our acquisitions through 2016,” said Hussein Hachem, Aramex’s chief executive.
He said Aramex last year acquired Fastway Limited to strengthen its presence in Australia and New Zealand and formed a joint venture with Australia Post.
“In like-for-like comparison we probably saw single-digit profit growth and we would expect to maintain that growth in 2017.”
The biggest logistics and delivery firm in the Mena region is investing in tech start-ups that focus on last-mile delivery.
E-commerce played a major part in the company’s growth though 2016, as it registered a 30 per cent rise in online deliveries.
Last year, Mohammad Alabbar, Emaar’s chairman and the founder of e-commerce platform Noon.com, led two investor groups to buy a 16.45 per cent stake in the company.
While much of the e-commerce growth that benefited the company was within the GCC, many products were sourced from China, Hong Kong, Europe and the United States.
The boom in e-commerce has also opened an opportunity in India and other parts of Asia that are sconsidered underserved by e-commerce.
“E-commerce is not going to slow down in 2017,” said Mr Hachem. “The average ticket price for the GCC e-commerce customer is US$120, which is very high. The market will grow because there is so much space for it to grow. Noon.com will do well for us because it wants packages delivering but we have reached no final agreement with Mr Alabbar.
The Mena region’s love of cash-on-delivery has not abated, with 75 to 80 per cent of packages requiring it, which makes it costlier because of the higher return rate.”
ascott@thenational.ae
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