The South African Post Office is in the process of permanently closing 130 branches across the country.
The figure was confirmed by Post Office CEO Nomkhita Mona during a briefing to Parliament’s Portfolio Committee on Communications on Wednesday.
This comes after the Post Office was declared commercially insolvent, with its 2019/2020 financial results showing it had incurred losses of more than R1.7 billion, while its liabilities exceeded assets by R1.5 billion.
As part of turnaround efforts, Mona said that the Post Office has targeted particular branches for closure due to non-profitability.
She explained that a previous decision to move post offices into areas of greater traffic – such as malls – had resulted in a proliferation of branches within a certain radius.
“In instances you would find there were three branches within 5km of each other,” Mona stated. “We are taking this opportunity to consolidate and move some branches into one.”
A portion of the earmarked branches have already been closed, while around 80 still remained.
As part of the plan, some of the branches which were shuttered in late 2020 and early 2021 for non-payment of rent would remain closed.
Mona said in certain instances the Post Office would still have to respect leasing agreements with landlords to avoid penalties. This could delay the completion of the consolidation process.
“We have been engaging in very extensive negotiations with the landlords,” Mona stated.
It was not clear how many jobs would be impacted by the branch closures.
Mona added that closures of branches in rural areas would be limited, as the distances between them could be vast.
She said the Post Office was working hard to reopen those rural branches which were closed due to not paying their rental fees.
The closures make up only a small portion of the Post Office’s total footprint in the country.
At the time of writing, there were 1,193 open Post Office branches, according to a list of post offices on its website.
The fact that the Post Office is closing branches while at the same time gunning for courier companies should raise eyebrows.
The Post Office is embroiled in a court battle with courier association SAEPA and PostNet regarding the delivery of packages weighing 1kg and less.
It claims it has the sole right to offer delivery of these items, as prescribed by the Postal Act, and therefore wants to stop couriers from carrying them.
If it is successful in its bid, commonly couriered items like bank cards, small electronics, legal and financial documents, and medicine would have to delivered by the Post Office.
A large branch network could play an essential role in ensuring fast and effective delivery of parcels.
Even with its current footprint, however, its previous attempt at running a courier service with its subsidiary Courier and Freight Group (CFG) failed dismally.
CFG sustained millions of rand in losses in 2015 and 2016, and was liquidated soon thereafter.