{"id":828695,"date":"2025-06-19T17:00:00","date_gmt":"2025-06-19T15:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=828695"},"modified":"2025-06-19T16:09:38","modified_gmt":"2025-06-19T14:09:38","slug":"state-owned-company-coming-after-couriers-and-deliveries-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/828695\/state-owned-company-coming-after-couriers-and-deliveries-in-south-africa\/","title":{"rendered":"State-owned company coming after couriers and deliveries in South Africa"},"content":{"rendered":"\n

The South African Post Office (SAPO) aims to chop out a significant portion of the lucrative courier business in the country, with the goal to derive more than a quarter of its revenue from the sector by 2029.<\/p>\n\n\n\n

Presenting its latest strategic plan to Parliament, the SAPO outlined its path from bringing in about R1.9 billion in revenue in 2024 to a goal of R5.2 billion by 2029.<\/p>\n\n\n\n

This will require a significant restructuring of its revenue base, it said, with targeted growth in both digital services and in couriers and parcels.<\/p>\n\n\n\n

As these two sectors grow on its books, its current reliance on postal services and sundry will decline.<\/p>\n\n\n\n

According to the group, bulk, franking and registered mail services are expected to decline by between 5% and 7% annually, but this can be stemmed through modernising and digitising operations.<\/p>\n\n\n\n

At the same time, international mail and parcel volumes are projected to increase by 50% over the coming years.<\/p>\n\n\n\n

It hopes to capture about 5% of the Business-to-Business (B2B) and Business-to-Consumer (B2C) delivery market and gain about 25% of the Consumer-to-Consumer (C2C) market within five years.<\/p>\n\n\n\n

It also wants to gain new revenue from connectivity services to underserved areas and expects to gain a significant boost from the AARTO system, once it is rolled out and its mailing requirements are in full effect.<\/p>\n\n\n\n

If SAPO’s vision for its business becomes a reality, its courier and parcel services would grow from a paltry R38 million contributor in 2024 to a R1.4 billion behemoth by 2029.<\/strong><\/p>\n\n\n\n

This would also accelerate the Post Office’s path to profitability, it said.<\/p>\n\n\n\n

By diversifying its revenue streams, and engaging various “strategic initiatives, operational efficiencies, and focused service offerings”, the group aims to attain profitability by 2028.<\/p>\n\n\n\n

It said it is currently projecting a loss of R1.03 billion for 2024, but is on the path to posting a net profit of R1.5 billion by 2029, achieving break-even in 2028.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

The R3.8 billion catch<\/h2>\n\n\n\n

The Post Office’s lofty plans and outlook does come with a major catch, however; it requires R3.8 billion to make it a reality.<\/p>\n\n\n\n

After being placed under provisional liquidation in February 2023, the company was instead put into business rescue, and a turnaround strategy was devised.<\/p>\n\n\n\n

With over 4,300 employees retrenched as part of the process, and over 360 branches permanently closed, the group required\u2014and still requires\u2014a significant overhaul.<\/p>\n\n\n\n

Backed by a R2.4 billion state bailout, the group upgraded its IT systems and infrastructure, modernised remaining branch facilities, replaced old equipment and upgraded its vehicle fleet.<\/p>\n\n\n\n

However, the funding was not enough to complete the job. <\/p>\n\n\n\n

The group flagged a further R3.8 billion “investment” as being a critical success factor for its plan, along with political buy-in and a significant integration of state-owned enterprises.<\/p>\n\n\n\n

The Post Office also faces significant market threats, particularly from the private sector.<\/p>\n\n\n\n

It noted that postal operators globally are forming partnerships with e-commerce platforms, logistics providers and SMEs to boost their business.<\/p>\n\n\n\n

However, it own operations are under pressure from more agile and technologically advanced players in the private sector.<\/p>\n\n\n\n

This is exacerbated by the fact that many large e-commerce platforms have their own internal logistics capabilties, like Takealot and Mr D.<\/p>\n\n\n\n

SAPO did flag some key advantages, such as its extensive network that reaches into many areas where private operators have no presence. It also has strong government support.<\/p>\n\n\n\n

A major trump card it possesses, though, is that it has “exclusive rights to deliver packages under 1kg, offering a competitive advantage in e-commerce and rural logistics,” it said.<\/p>\n\n\n\n

However, without the necessary investment of R3.8 billion, its options are limited, it conceded.<\/p>\n\n\n\n

The group faces escalating operational costs, outdated infrastructure, inefficient processes, limited skills, limited access to funding and has been slow to embrace digital transformation.<\/p>\n","protected":false},"excerpt":{"rendered":"

The South African Post Office is seeking its pound of flesh from the courier sector, hoping it will boost its revenues and drive it to profitability by 2029.<\/p>\n","protected":false},"author":10,"featured_media":828723,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[22903,22902,3003,3004],"class_list":["post-828695","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-couriers","tag-deliveries","tag-post-office","tag-sapo"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/828695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=828695"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/828695\/revisions"}],"predecessor-version":[{"id":828731,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/828695\/revisions\/828731"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/828723"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=828695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=828695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=828695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}