A showdown is looming between the SA Post Office (Sapo) and the courier industry over a recent ruling in favour of Sapo over its exclusive right to carry packages weighing less than one kilogram.
According to the SA Express Parcels Association (Saepa), the organisation is set to argue the issue in court. The Postal Services Act is not new legislation. It was promulgated in 1998 with the overriding objective of conferring on Sapo the responsibility of delivering mail.
Any other company wishing to move parcels weighing less than 30 kilograms must register with the Postal Regulator of the Independent Communications Authority of South Africa (Icasa), the regulating body for postal services.
Among the several exclusive rights reserved for the post office is the carriage of stamped mail placed into the traditional postal service via collection boxes, items under 1 kilogram, to allow them to fulfil their obligation.
“The courier industry however believes that it is not offering a mail service, but a courier service, and the post office monopoly therefore does not apply," Saepa CEO Garry Marshall told FTW. “In any event, it is the contention of the courier industry that the Postal Services Act does allow couriers to carry sub 1kg items.
The courier industry positioned itself as express logistics operators not players in the mail delivery business. “To draw the distinction, any business sending an urgent, important, time-definite item, for instance, to Cape Town requiring proof of delivery (POD) would be unlikely to go to the post office, put a stamp on the item and post it in a mailbox in the hope that it would arrive next day. They would engage the services of a time-definite courier company."
Industry commentators believe that the Post Office’s dismal financial results may be behind the sudden invoking of legislation and strong-arm tactics. It apparently covets the volumes of an express parcel industry which did not exist in its current form, with its procedures, safeguards, guarantees, and equipment when the Act was formulated, according to our sources.
“If anyone has cannibalised Sapo business, it isn’t the private express logistics sector but email which has replaced snail mail, another innovation not foreseen by the 1998 Act.” The 1998 Act refers to telegrams, it is clearly an anachronism."
The legal wrangle with PostNet has been bubbling under for some time. In December Icasa contended that PostNet was in contravention of the Act. PostNet exercised its right to take the matter to the High Court to review Icasa’s decision.
Certain courier companies and Saepa were cited as respondents in the review and Saepa intends to make its own submissions to Court in the review process.The courier industry has vowed to defend its rights vigorously – taking the issue as far as the Constitutional Court if necessary.“The Post Office Act was founded in a different era with different dynamics, well in advance of the smart-phone on-line revolution. The Post Office model appears to remain rooted in the old paradigm, employing outdated legislation with limited relevance, instead of energising and re-inventing itself to meet emerging needs to create market share,” said Marshall.
Notably, Icasa’s consumer promise is "Regulating the communications sector in the public interest". One of its strategic objectives is to "Promote competition – Icasa implements measures to facilitate effective, competitive markets in the sector."
Yet this current action was clearly against the interests of the senders of the hundreds of thousands of express parcels who rely on the courier industry and companies like PostNet to fulfil urgent, time-definite and important deliveries of valuable non-mail items, he added.”Icasa is where the Postal Regulator resides. While nominally independent, Icasa is a regulatory authority of the South African government, sole shareholder of Sapo on whose behalf Icasa has been acting. Sapo pays around R 14 million per annum to Icasa as a licence fee.
“It is difficult to see how constraining consumer choice by championing a loss-making government enterprise over a vibrant, growing, taxpaying, indispensable express parcel industry player could be construed either as Icasa promoting competition or as being in "the public interest." It appears rather to be prioritising the interests of one favoured supplier over the needs and wishes of the public and the national economy it was formed to serve.”
