Post Office vs Private Couriers: What’s Next for SA?

The South African Post Office (SAPO) has largely fast-tracked the development of private sector courier services through its failure to provide efficient services. With the rise of e-commerce and the steady growth in popularity of online shopping, the competition between traditional postal services and private couriers is intensifying. These trends and digital transformations are forcing businesses in this sector to find innovative ways of adapting to remain competitive.

SAPO supposedly had a monopoly over much of what courier express and parcel services provide today, but as reported in the WOW report on the courier express and parcel services industry in South Africa, it lost out on the benefits that could have accrued to it through its own failures.

The history of mail delivery in South Africa

In the eighties, in the suburbs of Johannesburg, bicycles delivering normal post and motorbikes delivering “By Hand” important mail were ubiquitous, and the “By Hand” volumes did not significantly affect SAPO’s mail delivery business.

In the late nineties, fax machines took over from SAPO-operated telexes, which probably had the first significant impact on road mail delivery volumes. Gradually the motorbikes to deliver “By Hand” became less and less visible on city roads.

The process of SAPO’s downfall was due to the sustained gradual decline in the quality of service by the organisation. Many newspaper articles reported on the piles of undelivered mail, triggering a consumer uproar of mail not arriving at its destination.

Disruption by alternatives

With the increased use of technologies and digitalisation, people started exploring alternatives, with electronic mail service starting to take off at the beginning of the 21st century. It took a few years to get a foothold, but once it became popular and people saw the enormous advantage, it took off like a rocket.

Post offices in various countries survived by adapting and modernising their services, keeping high standards, and ensuring legal protection for mail correspondence. SAPO in its reports, claimed to be modernising, but was slow to implement the change and allowed the deterioration of mail delivery to get completely out of hand.

Current realities in the postal services industry

SAPO’s existence and its purpose are now in question. Courier express and parcel services have taken over, despite the monopoly privileges still bestowed on SAPO. These alternative services are more expensive but they ensure reliability and certainty of delivery, for which consumers are willing to pay a premium.

Today, electronic communication via email or WhatsApp is cheaper and lightning faster than sending a letter, and as for sending parcels, the many private sector courier express and parcel services ensure a healthy pricing environment.

The SAPO case study demonstrates how government bureaucracies can become a hindrance to progress and economic growth. Think about the number of jobs already lost through the demise of SAPO. So many SOEs have become a burden on the country’s fiscus. The jury is out on whether privatisation is the panacea for SOEs’ woes.

What is next for postal services

While traditional postal services have proven to be less green, with more paper consumption and burning of fuels in transport to deliver post, the sustainability of electronic communications requires a comprehensive approach by addressing energy consumption in connection with data storage and transmission. Products used in the storage and transmission process need to be designed for longevity, repairability, and recyclability, reducing waste and resource consumption.