State-owned company coming after delivery drivers in South Africa

The South African Post Office (SAPO) wants to re-establish its monopoly on small package deliveries, arguing that it is necessary to protect its business model.

In its annual report for the 2025/26 period, the postal service claimed that the loss of its exclusive licence to deliver small packages was a material risk to its operations.

The state-owned enterprise previously held the exclusive right to deliver small packages under 1 kilogram through a reserved services licence.

The licence stood for 25 years until it expired in March 2025. The Post Office reapplied for the licence in March 2026, which is currently being processed.

However, even if it is granted, the terms of the licence have been changed, and the SAPO will no longer have the same exclusivity it once enjoyed.

The Department of Communication and Digital Technology (DCDT) effectively ended the monopoly on small-parcel delivery in December 2025, according to Newsday.

DCDT Minister Solly Malatsi gazetted a notice amending Schedule 1 of the Postal Services Act, removing references to “small parcels.”

Schedule 1 pertains to reserved postal services that are the exclusive mandate of the Post Office.

Previously, this list included “all letters, postcards, printed matter, small parcels and other postal articles subject to the mass or size limitations set.”

However, the term “small parcels” has since been removed from the list of SAPO services. While this change has been gazetted, it has yet to be ratified by the Independent Communications Authority of South Africa.

Malatsi said in July that this had yet to be done and that, as a result, the SAPO’s exclusive right to deliver small parcels remains in place, for now.

This is something that the Post Office doesn’t want to lose, as it said that the directive to remove sub-1kg parcels from its exclusive operating service was a threat to its business model.

It claimed the change was a “material development” that would eliminate a key revenue stream outlined in its business rescue plan.

According to the SAPO’s strategic business plan, published in mid-2025, it anticipates that its courier and parcel services will grow from a R38 million to a R1.4 billion revenue stream by 2029.

This assumes that the Post Office retains the exclusive right to deliver certain types of packages, as it would otherwise need to compete with the private sector.

Even though the SAPO has held an effective monopoly for three decades, management and operational failures led to its collapse in recent years.

The entity went into business rescue in 2023, following years of losses due to poor management, high costs, inefficiencies, and poor service.

Before it entered business rescue, the SAPO was placed under provisional liquidation to address its insolvency and inability to pay debts.

The SAPO has still not officially exited business rescue, though it has applied to do so. In the three years since the process began, the service has managed to turn things around.

This was only possible because the Post Office was forced to close 366 branches and retrench 4,300 workers.

Creditors also took a massive cut on money owed, receiving just 12c on every rand and writing off 88% of debts.

This service failure allowed the private sector to sweep in and quickly dominate South Africa’s courier and delivery market.

Today, the sector is valued at roughly R25 billion, with services like Postnet acting as direct competitors to the SAPO.

Other companies, such as Bolt, Uber, and Takealot, have also expanded their range of services to include deliveries and courier operations.

The Post Office previously took these groups to court to block them from delivering small packages in 2018, though this attempt was ultimately shot down.