Post Office monopoly on small parcels to be reviewed

Communications minister Mondli Gungubele. Image: GCIS

Government plans to review the Post Office’s monopoly over the delivery of items weighing less than 1kg, even as the rule is widely ignored in the logistics and e-commerce industries and is generally viewed as unenforceable.

Communications minister Mondli Gungubele signed a notice (PDF), published in the Government Gazette on Monday, authorising a review of the “exclusivity period” for services reserved for the Post Office. Although government hasn’t said anything formally about it’s intentions, the review might suggest the Post Office could lose this exclusivity.

“The minister of communications & digital technologies intends to review, in terms of section 16(8) of the Postal Services Act, the period during which no person other than the South African Post Office may provide a reserved postal service and wishes to consult the public in this regard.”

In terms of the act, reserved postal services include:

  • Delivery of all letters, postcards, printed matter, small parcels and other postal articles 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 legislation framework and the licence require the Post Office to provide such services universally to every citizen in the country to ensure that all citizens have equal access to a basic postal service that is reasonably accessible regardless of physical location, at a uniform postage rate and at an affordable price,” the minister said in the Gazette notice.

The rules limiting the delivery of items weighing less than 1kg is widely ignored in South Africa, by both consumers and businesses in the logistics space, including e-commerce companies. If they were to use the Post Office, the dysfunctional state-owned company’s notorious inability to deliver the mail timeously — if at all — would likely cause severe harm to online commerce in the country.

The Post Office is currently in business rescue after failing to pay creditors on time.

A planned R3.8-billion bailout, which the communications department has already expedited with submissions to treasury, will be used to pay out larger government entities such Postbank, the Post Office’s retirement fund, the South African Revenue Service and the company’s medical scheme.

The company’s rescue practitioners conceded last year that it was a “difficult” rescue but, guided by the Companies Act and the fact that by September 2023 the Post Office had R19-billion in accumulated losses, there were not many options available.

Read: Post Office will be saved – but thousands of jobs to go

Interested parties have been given 30 calendar days from publication of the notice in the Government Gazette to provide comment to the communications department on the planned review.  – © 2024 NewsCentral Media

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