Sapo versus Saepa standoff at breaking point

The long-running legal battle between the South African Post Office (Sapo), the Independent Communications Authority of South Africa (Icasa) and the courier industry is reaching a critical turning point, with court dates expected to be set soon. At the centre of the dispute is whether Sapo should hold exclusive rights to deliver packages weighing 1kg or less – a regulation that many in the logistics sector say is outdated and anti-competitive. While the case initially saw Icasa take on PostNet and the South African Express Parcel Association (Saepa) in 2018, major e-commerce players like Takealot have since joined the ongoing fight. Sapo launched court action against PostNet and Saepa, seeking to enforce its monopoly over the delivery of small parcels. According to Garry Marshall, CEO of Saepa, the dispute has dragged on for more than six years, with no resolution in sight as yet. “There’s no shortcut here,” he told Freight News. “We wanted the courts to decide whether parcels under 1kg should be open to the whole industry.” The dispute is rooted in the Postal Services Act, which gives Sapo exclusive rights to deliver items up to and including 1kg. In 2019, Icasa ruled in Sapo’s favour, ordering private courier services to stop delivering these smaller parcels by March 2020. This decision, however, was put on hold after Saepa and PostNet obtained a High Court interdict preventing Sapo from enforcing the ruling – a move that has kept the status quo in place, for now. “As the law stands, the Post Office currently still has the exclusive licence to deliver sub-1kg parcels, and the case is still pending with Icasa,” said Marshall. “We’re currently at the pleading stage, and with submissions having been made, we are positive that we’ll be getting court dates soon.” Marshall said the courier industry’s argument remained clear: the law, in its current form, entrenches a monopoly that is not in the public or business interest. “We believe the law was intended for the Post Office to deliver mail and traditional post,” Marshall said. “What we, as the courier industry, offer is not the same service at all. You don’t lick a stamp and go to a counter. It’s a pickup, it’s a delivery, it’s tracking, tracing, and proof of delivery. The fundamental service offering is entirely different.” He said beyond the technical legal arguments, the broader issue was what served the public best. “Our position is that restricting couriers is not in the interest of business or the public.” Industry experts agree that the Post Office’s ability to meet this delivery mandate is highly questionable, especially given that it hasn’t significantly updated its business model in decades. To compete effectively, Sapo would need to operate like a modern courier company – a costly and complex shift. At the same time, the low margins associated with sub-1kg parcels make the business case for Sapo’s monopoly even more difficult to justify. LV