President Cyril Ramaphosa has signed the South African Post Office (SAPO) Amendment Bill into law, setting the stage to transform postal services into a modern, multi-functional hub.
According to the Department of Communications and Digital Technologies (DCDT) statement, the new law expands the objective and mandate of the financially constrained entity and enables its relevance and sustainability by including services that respond to the evolving needs of customers in the digital economy.
“SAPO will now serve as a logistics and e-commerce provider of services as well as a logistics partner for other e-commerce and logistics players, including SMMEs and informal traders,” says the DCDT.
“The new law also prioritises partnerships with government institutions, which include national and provincial departments, national and provincial government components and municipalities, encouraging them to use post office infrastructure for efficient service delivery, reducing dependency on state funding, and unlocking new revenue streams.”
In terms of the Postal Services Act, the reserved postal services to be provided include delivery of all letters, postcards, printed matter and small parcels weighing up to 1kg, issuing of postage stamps, provision of roadside collection and address boxes, and provision of retail outlets at which customers can access reserved services.
The signing of the Amendment Bill into law follows a years-long court action by the state-owned entity (SOE) against PostNet and the SA Express Parcel Association (SAEPA).
The court battle, which stems from 2018, is informed by the Postal Service Act, which stipulates the government entity has the exclusive right to provide delivery services for all letters, postcards, printed matter, small parcels and other postal parcels up to and including 1kg.
Local e-commerce players previously warned that enacting the Amendment Bill could give exclusivity to SAPO for the delivery of parcels weighing 1kg or less – a predicament that could shatter the e-commerce sector and result in disaster for the freight and courier industry.
“The future growth of SA’s business-to-consumer e-commerce will be severely curtailed by an unreliable or inefficient delivery service marred by late and damaged parcel deliveries,”Garry Marshall, CEO of SAEPA previously told ITWeb.
Diversified, expanded services
The state-owned entity has been in dire financial straits over the past few years, owing creditors at least R8.7 billion.
Last February, a judgment was issued to place SAPO under provisional liquidation, which led to a provisional liquidator being appointed at the end of March.
The decision to place the SOE under business rescue was aimed at restructuring its debt and addressing operational challenges to prevent its complete collapse. The financial woes of the post office stemmed from a combination of factors, including reduced mail volumes due to digital communication trends, mismanagement, and an over-reliance on government bailouts to sustain operations.
Additionally, unpaid pensions, salaries, and other liabilities exacerbated the crisis, drawing criticism from unions and employees. The business rescue process aimed to provide SAPO with an opportunity to stabilise, restructure, and develop a sustainable operational model.
The financially-strung entity received a R2.4 billon funding allocation from National Treasury in 2023.However, there was no funding allocation for SAPO in the 2024 Medium-Term Budget Policy Statement, a National Treasury official specified to ITWeb.
The SEO, which has in recent years been given over R10 billion in government bailouts, has now been forced to maximise its revenue streams.
DCDT minister Solly Malatsi explained during an interview on Newzroom Afrika yesterday that SAPO is moving towards “a self-reliance” model that will be in line with technological advancements, and expand on its mandate, while repurposing its infrastructure to provide diversified services.
“The amendment of the Bill will revitalise and reposition SAPO as an e-commerce hub and digital platform relevant to the economic demands of this digital era. The post office had been caught up in a period where it wasn’t able to catch up with new services in the postal and courier sectors. This is part of the reason why it hasn’t been as competitive as it should have been, amid the mushrooming of online retail platforms,” Malatsi noted.
The Congress of South African Trade Unions has welcomed president Ramaphosa’s assenting to the Bill.
“This progressive Act provides a new mandate for the SAPO. It cannot rely upon posting letters in an era of e-communications,” says the trade union.
“The Act enables a critical shift by expanding the mandate of the SAPO to include e-commerce, courier services, support for SMMEs and an enhanced partnership with the Postbank. It positions SAPO to serve as a multi-purpose access point where the public can apply for key government services.”
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