The SA Post Office has not been taking advantage of its strategic position and needs to improve its courier business to stem the decrease in its customer base.
This was according to SA Post Office Chairperson Colleen Makhubele, who was speaking at a media briefing in Pretoria.
“Even in our obvious areas of growth – such as ecommerce – we have been slow to capitalise on our competitive advantage.”
The new SA Post Office board was appointed in December 2019, and upon taking up its duties, it soon found that there were big problems at the struggling postal service.
“The new board found that there were no new initiatives and that there was a big problem with general performance – resulting in situations such as the late delivery of cash,” said Makhubele.
“The board realised that in order for us as a business to take advantage of the great opportunities facing us, we first needed to get our house in order.”
Makhubele said that this included the driving down of costs, the automation of manual processes, strengthening of the SOE’s internal audit and risk functions, and acquiring more revenue through new initiatives.
“The SA Post Office is an organisation that has been losing money for the last decade,” said Makhubele.
She added that expenditure continues to exceed revenue and predicted that the SA Post Office would make a R1-billion loss in the current financial year.
Fixing the Post Office
Makhubele outlined various plans the SA Post Office has to improve its current situation and become profitable.
This included the recent implementation of a 90-day plan, which seeks to identify and address the key concerns within the organisation.
The SA Post Office is also revisiting all contracts to determine which need to be cut or renegotiated.
“Most contracts run for three years and over, and in such a long period a lot can change. SAPO is bleeding money through some of the contracts we have entered into,” said Makhubele.
An audit has found that there are serious irregularities in some Post Office contracts.
This includes partners being paid retainers without any work being done, or with the scope of the required work not being clarified.
“We also witnessed an attempt to finalise some tenders before the new board settled,” said Makhubele.
Makhubele said the process of reviewing contracts and related functionalities could save the Post Office as much as R100 million over the next financial year.
Building an improved system
The SA Post Office has also improved its systems to handle the necessary load – something that has been a big issue in the past.
“The system could not handle the high volumes of SASSA payments in the past,” said Makhubele.
“The system used to collapse every few hours due to transaction volume. This is being addressed.”
The SA Post Office has also implemented an international system which allows for the tracking of deliveries throughout the entire process using a single tracking number.
Previously, parcels were allocated a local tracking number – meaning there was a gap between the arrival of the package from other countries to the beginning of local tracking.
Makhubele said the SA Post Office is also implementing a notification system via SMS which will tell customers when their parcel is ready for collection.
The SA Post Office also envisions the development of its own ecommerce platform as a key driver of revenue to strengthen its financial situation.
This new platform is expected to launch on 9 March and has been built in partnership with the Universal Postal Union (UPU).
The ecommerce platform will integrate with other key African postal services – from Egypt, Kenya, and Ghana – and will also allow for comprehensive global shopping.
Customers will be able to list their products on the SA Post Office platform for free, and customers from anywhere in the world can purchase these products.
The SA Post Office will provide these entrepreneurs with both financial and delivery assistance.
The Post Office is also looking to work with local logistics entrepreneurs to assist with house-to-house deliveries in remote areas.