South Africa’s e-commerce sector is booming. The market is on track to surpass R130 billion in turnover this year. Local online sales are growing at roughly 20% and the sector handles over 100 million shipments annually. According to World Wide Worx, online shopping now represents 8% to 10% of total national retail – expanding at nearly ten times the rate of traditional brick-and-mortar stores.

But the uncomfortable truth is that while revenue is rising, profit margins are shrinking.

The problem isn’t marketing

When profits come under pressure, most merchants reach for the same playbook. They spend more on ads, push harder on sales, or negotiate lower product costs, rarely looking in the right place. The real profit drain doesn’t happen in marketing. It happens silently in fulfilment and last mile delivery. Margin loss is a death by a thousand cuts, from small, hidden inefficiencies spread across delivery networks, fuel surcharges, poor courier choices, and unexamined invoices.

If you want to protect your margins, you need to stop these seven main profit leaks.

1.      Unchecked Last-Mile Costs

Globally, last-mile delivery accounts for up to 53% of total logistics costs, and South Africa is no exception. As customer expectations around free or discounted shipping rise, unmanaged delivery fees quickly erode profit per order. Smart merchants constantly benchmark courier rates and avoid relying on a single provider.

By testing multiple options based on price, location and delivery requirements, you can protect margins without sacrificing speed and reliability. Or choose a platform that offers multiple courier partners.

2.      Unpredictable Fuel Surcharges

Fuel is one of the largest cost variables in local transport. Couriers adjust their fuel levies monthly, making shipping expenses unpredictable. If you only look at your base shipping rates without tracking fluctuating landed costs, your margins will take a hit.

Shipping platforms that provide transparent, up-to-date rates and factor fuel surcharges into the total costs give you a clearer picture of actual spending. This can help you spot the most cost-effective options.

3.      Poor Courier Allocation

No single courier performs equally across the entire country. A provider with great coverage and pricing in Cape Town might deliver poor service or higher rates in Durban or Johannesburg. Assigning orders based on rigid rules leads to higher costs and slower delivery times.

Solutions to this issue do exist, and a good place to start is by matching the courier you’re going with to your specific delivery zone based on real-time cost and success rates.

Shipping solutions can enable your business to connect with multiple courier partners. These platforms support teams in dynamically selecting the best carrier for each delivery area. This is based on current rates, coverage, and delivery performance data. The right partnership should lead to lower shipping costs while improving delivery reliability across provinces.

4.      The Cost of Failed Deliveries

Every failed delivery attempt hits your bottom line. Every return-to-origin attempt results in extra fuel, customer support time, and re-routing. Simple fixes like automated address validation and proactive delivery tracking notifications can significantly reduce these unnecessary attempts, keeping customers informed at every step.

5.      Reverse Logistics Escalation

Returns are a double penalty. Processing a return creates a second fulfilment journey, with extra transport costs, inventory hold-ups, and double handling. Track which products and locations generate the most returns. Understanding your return hotspots helps you spot delivery exceptions early and prevent items from heading back unnecessarily.

6.      Unaudited Billing Discrepancies

Small invoice errors quickly multiply when you’re moving thousands of monthly dispatches. Volumetric weight adjustments, incorrect service charges, and system mismatches are just some of the typical suspects. Without regular invoice audits and automated reconciliation, you are likely overpaying. The right tools match courier invoices against actual shipment details. This assists in identifying billing discrepancies and overcharges before they accumulate across thousands of orders.

7.      Operating in the Dark

You cannot fix what you do not measure. Most e-commerce teams closely track sales, web traffic, and conversion rates, but few have clear visibility over their true fulfilment cost per order or individual courier performance.

Real time logistics dashboards are the only way to catch operational leaks early. They provide visibility and actionable insights from one place, giving you the data you need to make smarter decisions.

Moving Beyond Cheaper Rates

Protecting your margins is not simply about demanding cheaper shipping rates. It requires a shift toward intelligent, data-driven fulfilment.

By adopting multi-courier management strategies, dynamically routing packages based on regional performance, and automated invoice auditing, South African merchants can safeguard their bottom line. In a competitive market, sustainable growth belongs to the merchants who manage their operational details as tightly as their sales funnels.

The profit leaks are there. You just need to find them. 

Written by: Angus LePine Williams, Head of Operations at Shiprazor

Who isn’t talking about fuel prices these days? From the morning commute to international freight, rising fuel costs have become a universal frustration, and for businesses, an increasingly expensive reality. As global markets continue to experience volatility, the logistics industry finds itself at the centre of the conversation, navigating higher operating costs while customers grapple with rising prices of their own.

For many businesses, the impact goes far beyond filling up a vehicle. Fuel influences the cost of manufacturing, importing, warehousing and distribution, making it one of the most significant drivers of supply chain expenditure. As a result, many companies have been forced to review their pricing models to protect already strained margins.

The challenge, however, lies in determining where necessity ends and opportunity begins. While many organisations are genuinely absorbing substantial increases in operating costs, others may be relying on the fuel crisis as a broad justification for raising prices, often with little transparency around what those increases actually cover. As a result, businesses are beginning to ask a different question: what should they expect from their logistics provider during times of uncertainty?

For Craig du Toit, Managing Director of RSA Global Forwarding South Africa, the answer is simple: the fuel crisis is exposing the difference between logistics providers and logistics partners.

“Businesses shouldn’t be asking whether fuel prices affect logistics – they undoubtedly do. The more important question is how companies respond to those pressures. The fuel crisis is real, and no one in our industry is immune to it. Every shipment, every delivery and every kilometre travelled costs more today than it did a year ago. Anyone can explain why prices are rising. The real value lies in showing customers what you’re doing to minimise those increases. That’s the difference between a logistics provider and a logistics partner.”

Across the industry, businesses are investing in route optimisation, shipment consolidation, improved planning and technology to reduce unnecessary expenditure. These operational improvements not only help contain costs but also strengthen supply chain resilience in an increasingly unpredictable global market.

Craig believes transparency has become one of the most valuable assets a logistics partner can offer.

“Customers understand that markets are volatile, they read the same headlines as everyone else. What they’re looking for is honesty. If costs need to increase, explain why. Show what you’re doing to minimise the impact. Businesses don’t expect every challenge to disappear overnight, but they do expect transparency, accountability and a genuine commitment to finding solutions. That’s how long-term partnerships are built.”

As geopolitical tensions, fluctuating oil prices and international shipping disruptions continue to reshape global trade, one question is beginning to surface across boardrooms and industries alike: if and when fuel prices stabilise, will the additional costs businesses are paying today begin to fall too?

It’s a question that doesn’t have a simple yes-or-no answer. While fuel plays a significant role in logistics pricing, it’s only one piece of a much larger puzzle. However, the discussion raises an important point: should businesses be just as diligent in reviewing costs when markets improve as they are when conditions deteriorate?

Craig du Toit believes it’s a conversation the industry shouldn’t shy away from.

“Will pricing come down when fuel prices do? It should certainly prompt a conversation. Pricing is influenced by many factors beyond fuel alone, but businesses should be reviewing their cost structures just as rigorously when markets improve as they do when they deteriorate. Transparency has to work both ways.”

Markets will recover, fuel prices will fluctuate and global trade will continue to evolve, as it always has. For RSA Global Forwarding, that’s nothing new. Having successfully navigated changing economic conditions, global disruptions and supply chain challenges over the years, the company understands that resilience isn’t built in times of certainty – it’s built in moments like these.

That’s why RSA Global Forwarding continues to position itself as more than a logistics provider. By working alongside customers, identifying practical solutions and continually looking for ways to improve efficiency, the company remains focused on helping businesses navigate uncertainty with confidence, rather than simply reacting to it.

While no one can predict exactly what lies ahead, one thing is certain: businesses will continue to face change. Those with the right partners by their side will be best positioned not only to weather the storm, but to emerge stronger on the other side. In an increasingly unpredictable world, the true value of logistics isn’t measured only by what gets delivered, it’s measured by the trust, resilience and long-term partnerships built along the way.

For decades, supply chain performance was measured by one overriding objective: efficiency. Businesses invested heavily in reducing inventory, shortening lead times, consolidating warehouse networks and removing unnecessary costs from their operations. Leaner supply chains were widely seen as stronger supply chains.

Today, that assumption is being challenged.

Disruptions are no longer isolated events that happen once every few years. Port congestion, supplier shortages, transport delays, infrastructure constraints and shifting customer demand have become familiar parts of the logistics landscape. The question is no longer whether disruption will occur, but how well a business can respond when it does.

An efficient supply chain is designed for normal operating conditions. A resilient supply chain is designed for the exceptions.

When Efficiency Creates Risk

Lean operations have transformed supply chains around the world. Lower inventory levels reduce carrying costs, fewer suppliers simplify procurement and centralised distribution networks often improve operational efficiency.

Those same decisions, however, can also reduce flexibility. A manufacturer relying on a single supplier may benefit from lower purchasing costs, but a disruption at that supplier can quickly affect production. Likewise, a centralised distribution centre may reduce operating expenses, yet any disruption at that facility can impact customers across an entire region.

Efficiency remains essential, but many businesses are recognising that removing every buffer from the supply chain can introduce new risks that are far more expensive when something goes wrong.

The Return of Strategic Buffers

For years, holding additional inventory was often viewed as inefficient. Today, that conversation is becoming more balanced.

Safety stock, once seen primarily as an added cost, is increasingly being recognised as a practical way to manage uncertainty. The same applies to supplier diversification. While working with multiple suppliers can increase procurement complexity, it also reduces dependence on a single source for critical materials or components.

These decisions don’t represent a move away from efficiency. They reflect a growing recognition that resilience sometimes requires carefully planned redundancy rather than eliminating every spare capacity within the network.

Looking Beyond a Single Distribution Centre

For many businesses, operating from one large distribution centre has always made financial sense. It can simplify operations, reduce overheads and make inventory easier to manage. The challenge comes when that one facility experiences delays or has to support customers spread across a large geographic area.

That’s why some organisations are taking another look at how their networks are set up. Regional distribution centres may cost more to operate, but they can shorten delivery times, reduce transport distances and make it easier to keep goods moving when one part of the network comes under pressure.

Technology is helping businesses make those decisions with greater confidence. Instead of relying on assumptions, supply chain teams can see how inventory is moving, where transport delays are occurring and which parts of the network are carrying the most risk.

Looking Beyond the Lowest Cost

For a long time, supply chain performance was judged largely on cost. Lower transport spend, leaner inventory and better warehouse utilisation were all signs of an efficient operation.

Those measures still matter, but they’re no longer telling the whole story. Businesses are also asking different questions. How quickly can we recover if a supplier can’t deliver? How much disruption can our network absorb before customers feel the impact? Are we meeting service expectations consistently, even when conditions change?

Those questions don’t replace efficiency – they add another layer to it. The strongest supply chains aren’t always the cheapest to run. More often, they’re the ones that continue performing when the unexpected becomes part of the working day.