The post office of the future

The changing business landscape presents opportunities for the entity to launch innovative services

Achieving consistent and, ultimately higher process yields through operational improvements that include automation is what the SA Post Office (Sapo) is consumed with, according to chief financial officer Lindiwe Kwele. Investments in this core mail business operations area of Sapo have been lagging in the past and its management is in a rush against time to address it. Mail business operations account for 60% of Sapo’s revenues.

“Past responses to the changing business landscape which required immediate capital investment decisions have not been adequately aligned and we are correcting that. In most developed countries, postal services have automated their sorting facilities and are focusing on the so-called last mile. They also have environmentally friendly transport nodes, route optimisation technology and other such mechanisms which we have been slow to adopt,” says Kwele.

In some developed countries postal services have had significant changes. For almost a decade, revenues and the numbers of mail items being posted in many countries showed a consistent decline, followed by a period of stabilisation.

These entities are slowly increasing revenues, due mainly to the parcels component of the business as well as diversified revenue combinations that include financial services, says Kwele.

Based on the advances made with the implementation of its corporate plan, Kwele says Sapo’s prospects of clawing back in a similar fashion are firm and the focus of the entity is on a holistic revenue strategy that captures the untapped potential of the business.

“We are implementing a shift in thinking that looks beyond traditional mail revenue at the individual customer level, utilising technology to focus on the total potential value at every customer interface,” she says.

A further technology-based initiative introduced to address Sapo’s declining revenue in the mail business included hybrid mail — mail that is delivered using a combination of electronic and physical delivery.

The sender uploads the letter and sends it electronically to the postal service provider, who then prints it out as close to the final delivery address as possible, inserts it into an envelope and posts it on the same day. Hybrid mail has the benefit of being more efficient, streamlining staffing requirements and reducing costs. Sapo is refocusing its efforts on building efficiencies on this initiative as its full implementation took longer than planned.

Kwele also believes there is a business case for taking advantage of opportunities in the debt collection market.

“There’s the case for Sapo becoming an integral part of the entire value chain rather than simply a dispassionate transaction- al supplier,” she says.

To illustrate just how far infrastructure investments of most of SA’S mail and parcel operators have lagged behind their global peers, many global operators are starting to focus their attention on artificial intelligence, the use of drones for delivery, self-driven vehicles and even 3D printing.

Locally, parcel and mail sorting is still mainly a manual process. Sapo’s own pursuits for automation, until recently, have been halted by inadequate capital investment resources. However, the entity has invested in intrusive scanning to mitigate risk.

Sapo was allocated R2.9bn in the medium-term budget policy