Zero punishment for Post Office’s package delivery failures

South Africa’s communications regulator has seemingly not taken action against the South African Post Office (SAPO) despite the state-owned company failing to meet a regulatory obligation of its postal services licence for several years.

At the same time as it has failed to meet the condition, SAPO has attempted to use its title as the country’s sole postal service to assert it has a legal monopoly on deliveries of all packages weighing 1kg.

The financially-troubled company, which is currently undergoing business rescue, has threatened legal action against some private couriers which have stepped in to offer South Africans reliable and affordable alternatives for small package deliveries.

SAPO maintains that the Postal Services Act determines the handling and delivery of sub-1kg packages are for reserved postal services, and pointed out that it is the only licenced postal service in the country.

What SAPO fails to mention is that its abysmal reputation for late deliveries and lost packages could potentially impact its right to hold that licence.

The Independent Communications Authority of South Africa (ICASA) prescribes that registered postal services meet a certain annual mail delivery performance target.

This figure indicates the portion of postal articles that the service delivered within five days of its posting.

Icasa decreased its 95% mail delivery performance target to 92% in 2015.

The figure was also temporarily dropped to 90% during the Covid-19 pandemic, when physical movement of delivery drivers was impeded.

Despite the lowered standards, SAPO has failed to meet the mail performance delivery target for several years.

SAPO’s last reported financial year, 2022/2023, saw its worst-ever performance of 51.62%.

Over the last eight years, the highest number it achieved was 89.25% in 2019/2020.

Calculation of Post Office’s figures a mystery

A research paper by Hans W. Ittman, published in the Journal of Transport and Supply Chain Management, also casts doubt over the accuracy of SAPO’s claimed mail delivery performance numbers.

In addition, Ittman’s deeper analysis showed that SAPO’s priority services were unable to deliver any items in five days or less, contrary to their advertised timeframes.

The question then stands: Why has ICASA not acted against the Post Office for its dismal failure to deliver on the requirements of a service on which it supposedly has a monopoly?

MyBroadband asked ICASA whether it had ever engaged with the Post Office about its continued violation of the licencing conditions but did not receive feedback by the time of publication.

South African Express Parcel Association (SAEPA) CEO Garry Marshall told MyBroadband that Icasa had the power to conduct an inquiry into licencing conditions and it may suspend or revoke any licence if the holder contravened its terms and conditions.

“This extends to SAPO’s compliance with the mail delivery standards or other performance standards prescribed in terms of its licence,” Marshall stated.

He said it was not entirely clear why Icasa had not conducted such an inquiry despite SAPO failing to meet the threshold for several years.

Although SAEPA had not lodged a complaint about this itself, it had drawn Icasa and the Department of Communications and Digital Technologies’ attention to the deficiencies of the Post Office in various other forums.

SAEPA’s members include the courier services that the Post Office contends are stepping on its turf by offering delivery of sub-1kg packages.

Marshall maintains that SAPO’s belief that it was the only provider that may deliver these packages was an incorrect interpretation of the applicable legislation.

“SAEPA maintains that, correctly interpreted, the Postal Services Act confers upon SAPO a monopoly to convey those items described in Schedule 1 to the Postal Services Act by means of postal service,” said Marshall.

“It permits couriers and express logistics services providers to also convey such items, albeit by means other than a reserved postal service,” Marshall said.

“SAEPA’s members are permitted to convey sub-1 kilogram packages by way of courier service.”

Marshall said that this interpretation of the regulations aligned with the objectives underpinning the postal regulatory framework because it permits SAPO to be the only entity which can operate traditional post office infrastructure and perform the universal postal services function.