Post Office to block small parcels from being delivered by couriers in South Africa

South Africa Post Office CEO Nomkhita Mona said by law, they are the only institution that is allowed to deliver packages between 0 and 1 kilogram. She added that this law was created to subsidise services that the Post Office cannot deliver profitably.

The fight over the delivery of packages under 1kg started in 2018 when the SA Post Office lodged a complaint against Postnet for delivering packages under 1kg. The Post Office argued that the Postal Services Act 124 of 1998 gives it the sole right to offer “reserved postal services”.

Reserved postal services include all letters, postcards, printed matter, small parcels, and other postal articles of a mass up to and including one kilogram.

In 2019, the Complaints and Compliance Commission (CCC) of the Independent Communications Authority of South Africa (Icasa) ruled that PostNet had contravened the Postal Services Act by transporting and delivering packages under one kilogram.

“No one is permitted to transport or deliver reserved postage as set out in the Schedules to the Act, unless licensed to do so in terms of the Act,” the CCC said.

Reserved Postal Services

1. The reserved postal services include –
(a) all letters, postcards, printed matter, small parcels and other postal articles subject to the mass or size limitations set;
(b) issuing of postage stamps; and
(c) the provision of roadside collection and address boxes.

3. The reserved postal services include all items described in items 1 (a) and 2 of a mass up to and including one kilogram or size which enables it to fit into a rectangular box with the following dimensions:

length 458 mm, width 324 mm, thickness 100 mm Cylinders having a maximum length of 458 mm and 100 mm thickness or a mass of up to one kilogram are regarded as letters.

The regulator sent Postnet a cease-and-desist order in October 2019 for violating the Postal Services Act 124 of 1998. The SA Post Office also confirmed that the law, and therefore the ruling, applies to all courier companies operating in South Africa.

This case shook the South African courier industry as it essentially prohibits private companies from delivering packages under one kilogram.

Postnet and the South African Express Parcel Association (Saepa) are fighting this ruling, arguing that the SA Post Office’s interpretation of the law is wrong.

PostNet obtained interim relief against Icasa’s desist order from the Gauteng High Court, pending the outcome of its main challenge. Nortons director Anton Roets, who is representing Postnet and Saepa, said the Post Office is arguing that the Act gives them a monopoly over couriering of articles under 1 kilogram.

PostNet and SAEPA, in turn, said the Act only gives the Post Office a monopoly over postal services and not courier services.

He said that apart from the interpretation of the Act’s wording, South Africa’s constitution also supports their position.
Speaking to Carte Blanche, Mona said reiterated that by law in South Africa, only the Post Office has the mandate to distribute any parcel between zero and one kilogram.

She said this law was “put together” to help the SA Post Office to subsidise services on which it will not be able to make money. “It is about how do we serve the communities,” said Mona. The Post Office, however, does not have the capability to take over the services that courier companies currently offer.

The institution is technically insolvent, and there the public does not trust it to deliver packages on time and in good order. The Post Office is now looking to partner with companies to achieve its plan to digitise, modernise, and deliver ecommerce services.

It has recently sent out a request for interest, inviting private courier companies to partner with the SA Post Office to deliver packages under 1 kilogram. Whether private companies will be keen to partner with the Post Office, which has a poor performance and financial reputation, remains to be seen.

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