Postal services take a dip

By Staff reporter | 10 Apr 2020 at 19:16hrs
The country's postal and courier services is continuing on a downward trend with latest figures showing a 32 percent dip during the year to December 2019 on e-substitution as technology is providing an alternative channel for transmission of information.

The rise in mobile phone technology has seen postal services take a dip as the market shifts to voice calls, short messaging service (SMS) as well as over the top services such as WhatsApp messaging and calls that are more efficient and cheaper than postal.

According to the regulator, the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) postal and courier services went down 32 percent to 5,3 billion items in 2019 compared to 7,8 billion recorded in the prior year. The service has halved in the past five years from 10 billion recorded in 2015.

"Postal and courier volumes have been consistently declining over the past five years. The decline in postal and courier volumes, in particular domestic, is attributable to e-substitution," said Potraz in their annual sector performance report.

According to the report domestic postal fell 41 percent to 3,2 million during the year under review. Several corporates that have been sustaining the domestic postal services are now resorting to digital services such as bulk SMSs and e-mails to communicate with their market. In terms of postal density, the country has 219 post offices, which implies 1 post office per 66 539 people.

International incoming postal and courier went down 15 percent to 1,6 million, while international outgoing postal and courier fell the hardest with a 53 percent decline to 180 341. However, it was not all doom and gloom as domestic courier ticked 32 percent to 716 456 from 538 939 in the comparable year.

On a quarter on quarter basis, the sector registered a 23 percent growth to 1,3 million during the 2019 fourth quarter. Domestic postal letters, domestic courier and international incoming rose 24 percent, 48 percent and 5 percent respectively driven by festive season. The sector has not been spared from inflationary pressures, which saw operating costs exceed revenues during the fourth quarter. Revenue was 104 percent firmer to $38,1 million against operating costs of $38,6 million.

Figures from Potraz show that FedEx dominates the sector as it commanded 52 percent of total market share during the fourth quarter under review followed by Zimpost with a 36 percent market share.

The other service providers - DHL, Courier Connect and Overnight Express account for the remainder. FedEx's dominance is on the back of growth in international incoming courier volumes whose income is in foreign currency, while they are also the sole courier provider for VISA applications for the United Kingdom and Canada. According to the regulator, the services is expected to continue on a decline as the market further embraces electronic methods.

"The decline in postal volumes as seen over the years is likely continue. The principal cause of the decline in letter volumes has been the substitution of paper communication by electronic methods (e-substitution). On the other hand, parcel traffic is expected to grow due to e-commerce. The availability of foreign currency will have a positive impact on e-commerce," said Potraz.



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