The South African Post Office (SAPO) has unveiled an ambitious five-year plan to reinvent itself as a major player in the courier and delivery market, aiming to pull itself out of financial crisis and into profitability by 2029.
The struggling state-owned entity presented its strategy to Parliament this week, revealing plans to dramatically increase revenue from R1.9 billion in 2024 to R5.2 billion by 2029, with a major push into the courier and parcels sector.
SAPO is betting big on parcel delivery, hoping to grow revenue from a modest R38 million in 2024 to R1.4 billion within five years.
The public postal service has set its sights on capturing:
- 5% of the B2B and B2C market
- 25% of the Consumer-to-Consumer (C2C) market
These targets align with a 50% forecasted increase in international mail and parcel volumes, indicating a shifting market in which traditional postal services are rapidly declining.
Mail decline, digital rise
As digital communication continues to replace letters and bulk mail, SAPO predicts a 5% to 7% annual decline in traditional services like registered and franking mail, unless aggressive modernisation and digitisation are undertaken.
The plan highlights a pivot toward a dual revenue model focused on digital transformation and parcel logistics – a move SAPO says is key to remaining relevant.
From liquidation to revitalisation
Following a devastating R1.03 billion projected loss in 2024, the SAPO is targeting a net profit of R1.5 billion by 2029.
But reaching that goal comes with steep costs.
The Post Office estimates it will need an additional R3.8 billion in funding to execute its turnaround strategy.
This follows a turbulent recent history that includes:
- Provisional liquidation in February 2023
- A business rescue plan to avoid collapse
- The retrenchment of over 4 300 workers
- Closure of 360+ branches nationwide
Despite these cuts, the entity was bolstered by a R2.4 billion state bailout, enabling critical upgrades to IT infrastructure, logistics equipment, and its vehicle fleet.
SAPO’s vision for 2029
SAPO’s transformation plan sees it becoming a self-sustaining, digitally-driven postal and logistics service – no longer reliant on government bailouts and increasingly integrated into South Africa’s e-commerce ecosystem.
“This strategy is not just about survival – it’s about creating a modern, profitable national service that meets the demands of a digital economy,” said an official familiar with the presentation.
When last did you set foot in a South African Post Office branch?
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