South Africa’s biggest ecommerce retailer Takealot has applied to join the court battle between PostNet and the South African Post Office (SAPO) over the delivery of small packages by courier.
The private postal service and other courier companies are at loggerheads with SAPO over its insistence that it has the sole right to deliver all parcels mailed in South Africa weighing 1kg and below.
The fight started in 2018 when Icasa’s Complaints and Compliance Commission (CCC) ruled that the Post Office had a legal monopoly to carry these packages because they fell under “reserved postal services” in the Postal Services Act 124 of 1998.
According to the Act, reserved postal services include letters, postcards, printed matter, small parcels, and other postal articles of a mass up to and including 1kg.
That would mean items often sent via private couriers such as vehicle licencing documents, legal papers, small electronics, and chronic medication must be delivered by the Post Office, the only licenced postal service.
PostNet was subsequently served with a cease-and-desist order for violating the Act but secured an interim relief order against this in the Gauteng High Court, pending the outcome of its main court challenge.
It contends that the Post Office and CCC’s interpretations of the law are incorrect.
PostNet was previously joined by the South African Express Parcel Association (Saepa), which represents several major couriers in the country, such as DHL and FedEx.
Takealot told MyBroadband that SAPO’s insistence on delivering all parcels 1kg and below had the potential to impact everyone in the ecommerce space — big and small.
“For this reason, Takealot has made the decision to join the litigation,” the company said.
Takealot operates its own courier service to deliver packages ordered on its online store, which is very popular in South Africa.
Many of its products fall into the category that the Post Office and Icasa regard as “reserved postal services”.
Takealot said the ecommerce industry offered tremendous potential for growth, small business enablement and employment opportunities in South Africa.
“Now, more than ever, South Africans need to be given the ability to participate and grow this sector of the economy,” the company said.
“To do this, ecommerce companies must be able to use reliable courier and delivery services to deliver efficiently across the country — regardless of the size of the parcel.”
The issue of delivery efficiency is precisely what has many industry players concerned about the consequences of SAPO winning this particular case.
Some have questioned whether the Post Office would have the necessary logistics, workforce, or financial resources to take over the delivery of all couriered packages in the country.
Over the last few years, the Post Office has built up an infamous reputation for delays and lost packages. It is also technically insolvent, with a net loss of R1.066 billion reported for the 2019/2020 financial year and debt now estimated at over R1 billion.
Several of MyBroadband’s recent tests have shown that the Post Office’s Speed Services turnaround times and customer services have significant shortcomings compared to private couriers.
Saepa CEO Garry Marshall previously told MyBroadband that SAPO’s interpretation of the Act would technically include food delivery.
That would mean food ordered through Mr D Food and Uber Eats would have to weigh more than 1kg.
While Icasa has claimed this would not be the case because food is excluded in the regulations, it should be noted that there is no such exclusion explicitly mentioned in the Postal Services Act.
Marshall this week told MyBroadband that most of the case’s participants are yet to file their submissions to court, including PostNet and SAPO, which means the matter is likely only to be heard in 2023.
SAPO has said it is considering a system where private couriers can deliver parcels under 1kg as “agents” of the Post Office.
Couriers must then pay an “agency fee” for the privilege of delivering parcels that weigh less than a kilogram.
Marshall said this scheme would amount to nothing more than an additional tax, and that Saepa would take the matter to the Constitutional Court if needs be.