Heavyweight logistics player created to tap into the rapidly growing e-commerce market
City Logistics and private equity management company Clearwater Capital, have partnered to acquire 100% of franchised courier company, Fastway Couriers South Africa. Clearwater Capital has acquired a 30% minority stake.
The acquisition has created one of the largest turnkey logistics providers to the fashion, retail and e-commerce sectors, says Ryan Gaines, City Logistics’ CEO. “The combined businesses of City Logistics and Fastway offer one of the most affordable delivery options in South Africa for SMEs and corporates,” he comments.
The Fastway acquisition allows City Logistics to provide its existing and future customers a valuable small parcel solution. The two companies count Mr Price group, Home Choice and The Foschini Group among the list of shared customers.
“This is a strategic investment, giving us the opportunity to increase services offered to our existing clients, to serve a new customer base and to provide solutions for a market that requires options to reach their end customers. With the anticipated growth of e-commerce, it is a critical part of our growth strategy,” says Gaines.
South Africa is the 41st largest market for e-commerce with a revenue of US$5 billion in 2021 . Global e-commerce sales are expected to increase over the next few years with South Africa’s yearly growth rate of 8% between 2021 and 2025 expected to outperform the global average of 6%1 .
“This transaction will further assist the growth opportunity that lies with global e-commerce retailers like Alibaba and Shein, where imports are brought to one central place for final distribution to end customers. This is a service that Fastway is likely to develop further in the future,” says Gaines.
Entrepreneurship support underpins Clearwater Capital’s reason for investment. “Fastway’s unique regional franchise model provides an opportunity for micro-entrepreneurs to benefit from the growth opportunity in the e-commerce sector,” says Keval Mehta, Clearwater Capital’s Executive Director. “Logistics companies are increasing their workforces and technology to keep up with increasing e-commerce demand, and in doing so are contributing much-needed jobs,” he adds.
Capital growth investors and entrepreneur supporters, Clearwater Capital, partner with leading trade players like City Logistics to unlock opportunities and growth. Afripack, with whom Clearwater partnered in order to grow and ultimately sell the business to global flexible packaging player, Constantia Flexibles, is one of the company’s accomplishments.
The Fastway transaction, which includes Fastway Couriers’ National Master (Fastway (South Africa)), as well as Fastway (Johannesburg) and Fastpost, follows on City Logistics’ acquisition of Fastway (Cape Town) and Fastway (Durban) in 2021. Fastway will continue to operate as normal, servicing its existing routes and using existing suppliers. Fastway will report to the board, which will include members of City Logistics and Clearwater Capital.
City Logistics holds a level 3 BEE Scorecard and has an established greening programme that includes energy saving measures like solar power and water harvesting. Eco operations include electric forklifts.
