Parcel delivery times could double if the Post Office’s monopoly ambitions succeed

(Photo by Gallo Images/Fani Mahuntsi)

  • The South African Post Office says it has unique rights to ship parcels weighing 1kg or much less.
  • This interpretation was supported by the Independent Communication Authority, which is able to defend its position earlier than a High Court evaluate.
  • If the Post Office is profitable in its bid, South Africa’s R20 billion non-public courier business might be devastated.
  • And South Africans awaiting parcels might want to endure longer delivery times.
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The South African Post Office (Sapo) desires to monopolise the delivery of parcels weighing 1kg and underneath. If it succeeds in side-lining non-public courier firms from distributing small objects, South Africans can count on common delivery times to double.

A large shakeup in South Africa’s courier, categorical, and parcel (CEP) business – estimated to be worth approximately R20 billion – is brewing. The renewed combat stems from a criticism laid by Sapo in 2018, whereby the embattled state-owned enterprise argued that personal courier company, PostWeb, was in contravention of the Postal Services Act.

This Act regulates the operation of Unreserved Postal Services (UPS) which applies to all non-public courier firms in South Africa. Sapo is the solely licensed Reserved Postal Services (RPS) operator and argues that, underneath the Postal Services Act, it ought to have unique rights to ship objects which weigh 1kg or much less.

The Independent Communication Authority of South Africa’s Complaints and Compliance Committee (ICASA CCC) ruled in favour of Sapo and ordered that PostWeb stop delivering small parcels by March 2020.

PostWeb obtained an interdict from the High Court, halting the order simply two weeks earlier than it was resulting from come into impact, which has allowed non-public courier firms to proceed delivering packages weighing 1kg or much less.

A evaluate of Sapo’s interpretation of the Postal Service Act – now supported by the South African Express Parcel Association (Saepa), which represents firms like FedEx, DHL, UPS, and RAM – has been lodged with the High Court.

Both Sapo and Icasa are difficult this evaluate, with the latter submitting papers in defence of its original interpretation of the Postal Service Act.

And whereas a ruling in favour of Sapo and Icasa would have devastating monetary penalties for personal courier firms, South Africans delivering and receiving small parcels may even be affected.

The Post Office is commercially bancrupt and incurred losses of just about R1.8 billion final year. The final time Sapo made a revenue was in 2006. It additionally owes R1.8 billion in rental arrears and has been pressured to shut greater than 50 of its places of work. Of the 1,416 operational post office branches only 55 are profitable.

“Indeed, (the) SA Post Office’s major challenges in the recent past, are well documented,” mentioned Nomkhita Mona the Group CEO of Sapo, in response to a scathing report by the Auditor-General.

“These have come about as a result of a number of factors – both exogenous and endogenous – including an obsolete business model. These were exacerbated by the advent of the Covid-19 pandemic.”

This has raised severe issues round Sapo’s capability to fulfill the demand of monopolising the delivery of things weighing 1kg or much less.

At the time of publication, Sapo had roughly 4.8 million objects which had been awaiting delivery. Most of those excellent objects are from worldwide sources, in response to a Sapo consultant who spoke to Business Insider South Africa.

“The Post Office delivers an average of a million items per day, making this a five-day total,” defined Sapo.

“We expect to significantly reduce this volume within weeks, having introduced a campaign to clear all mail on hand… we have already cleared the inland sorting centres with only international items requiring attention.”

And whereas the Post Office says it has the capability to clear excellent backlogs inside every week, its common delivery times are already considerably longer than these provided by non-public courier firms.

“Domestic items are delivered within an average of six work days, and international items within ten days,” Sapo advised Business Insider SA.

“The processing and delivery of international items is compounded by arrival of aircraft operating outside normal schedules owing to international travel restrictions. In April, for example, the Post Office was receiving mail dated February and March 2021 from abroad.”

Sapo additionally mentioned that load shedding had brought on delays at its worldwide sorting centre in Johannesburg.

Private courier delivery times, like the PostNet-to-Postnet service, are typically accomplished inside two to a few working day, lower than half the common time famous by Sapo. This additionally extends to worldwide deliveries, with non-express choices – like UPS’ Expedited Shipping or Express Saver providers – taking now not than six days to finish.

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