South African consumers and e-commerce businesses who rely on courier companies to deliver small parcels – from new cellphones, credit cards, medical products, to passports and visas – are facing chaos as the SA Post Office (Sapo) tries to force people to use its services exclusively for these deliveries. This as the struggling state-owned enterprise moves to enforce a piece of decades-old legislation which, it says, gives it a monopoly over couriering small items. A number of major courier companies – including multinationals like DHL, Fedex and UPS, as well as local players like Bidvest and PostNet – will be...
South African consumers and e-commerce businesses who rely on courier companies to deliver small parcels – from new cellphones, credit cards, medical products, to passports and visas – are facing chaos as the SA Post Office (Sapo) tries to force people to use its services exclusively for these deliveries.
This as the struggling state-owned enterprise moves to enforce a piece of decades-old legislation which, it says, gives it a monopoly over couriering small items.
A number of major courier companies – including multinationals like DHL, Fedex and UPS, as well as local players like Bidvest and PostNet – will be hard hit if Sapo gets its way.
According to PostNet, the potential impact extends beyond the inconvenience of having to either pick up these items in-store or entrust them to an institution that has made headlines for inordinate delays and reports of theft.
If Sapo is successful, says PostNet, it could have serious repercussions for an industry valued at an estimated R20 billion a year and, in turn, “a significant detrimental effect” on the economy.
Last October, the Independent Communications Authority of South Africa (Icasa) found that PostNet had contravened the Postal Services Act and issued a desist order.
This after Sapo lodged a complaint against PostNet for couriering items of one kilogram or less – which, it says, the Act prohibits as a “reserved postal service” that only licensed operators can carry out.
Icasa found the Act did create a monopoly in favour of Sapo and that this was “intended to place Sapo in a financial position to widen the availability of postal services throughout the country”.
But PostNet, represented by Norton Inc, has now launched an application in the High Court in Pretoria to have Icasa’s finding – along with the order – set aside. Alternatively, the company wants the relevant section of the Act declared unconstitutional and invalid.
The crux of PostNet’s case is that the company does not provide a “reserved postal service” but rather a courier service.
In the application, managing director Christopher Wheeler pointed to the fact that Sapo was recently ordered to take down an advertisement which claimed it delivered parcels “efficiently and without delays with the margins of error reduced to zero percent”. This after a complaint was lodged with the Advertising Regulatory Board.
He also quoted from Sapo’s own corporate plan, for the 2018/19 to 2020/21 period, in which then chief executive Mark Barnes said the institution had “regressed so far technologically, that it simply cannot offer a competitive service”.
“By it’s own light, Sapo does not have the capacity or capability to play this role,” Wheeler said.
In response to questions from The Citizen, Sapo said that Barnes’ comments were to “be taken in the context that [he] faced at the time”.
“The premise of the complaint is precisely that Sapo’s challenges have in part been caused by competitors’ non adherence to the regulations and therefore depriving Sapo of much needed revenue to maintain and modernise its infrastructure.”
But, said Wheeler, if private couriers were barred from delivering small, high-value items then “the likelihood is that consumers that currently use these services would take other measures to deliver their goods rather than entrusting them to Sapo”.
“It is therefore not the case that reserving courier services of items one kilogram or less to Sapo would lead to increased revenue,” he said.
As for the impact on his company, the industry and the economy – Wheeler said this would be far-reaching. This would impact 390 independently owned franchisees, he said.
“These are small, entrepreneurial businesses which employ over 1,900 people. The same would apply to all other courier companies,” said Wheeler.
He also said forcing e-commerce operations to use the post office would likely “undermine the fundamental premise of these businesses – being fast, reliable and secure delivery of [often] higher value parcels” and, as a result, inhibit growth of this vital economic sector.
Sapo and Icasa are both opposing the court action.
However, the South African Express Parcel Association, which is also listed as a respondent in the papers, is not.
The CEO of the representative body, Garry Marshall, said yesterday: “Our views are largely in line with those of PostNet … we strongly agree that the impact of express transport companies not being able to carry parcels under one kilogram will have a significant impact on business and consumers alike.”
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