Mail, courier services register strong growth due to Covid-19

Monday July 19 2021
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Courier service providers such Nation Courier Uganda, have registered growth and good perfromance due to Covid-19 related restrictions. PHOTO | file

By Dorothy Nakaweesi

Mail and courier services almost doubled growth in the quarter ended March supported by increased demand due to Covid-19 related disruptions, according to the Uganda Communications Commission (UCC). 

The performance captured in the UCC Market Performance report, highlights a global phenomenon that has seen massive growth in the mail and courier space due to “restricted travel movements and a slow resumption in business worldwide that have continued to provide growth opportunities” for an industry that had previously faced a number of challenges resulting from new technology. 
In Uganda, according to the report, incoming and outgoing post and courier traffic grew to an average of 72,000 units between January and March up from 35,000 units in previous quarter ended December 2020. 

Therefore, the report noted, the sector recorded 218,000 new incoming and outgoing mails more than the 148,000 that were recorded in the quarter ended December 2020. 
“In [the first quarter of 2021], many last mile order fullment providers like Aramex, Fedex, UPS (Freight in Time) and DHL posted record revenues on account of in-country last-mile delivery services,” the report notes, highlighting that the growth has created new opportunities for posts and courier service providers as they evolve business models to adapt to new possibilities. 

The growth, the report also notes, has provided a fertile ground in the post and courier sector, which, as of March 2021 had grown to 33 licensed service providers. 
Out of the 33 services providers, 20, which is 66 per cent, hold domestic licenses while five hold international licenses. 
Four hold regional licenses while two hold inter-city licenses. Diplomatic post office and national operator segments each hold one license, respectively. 

Postal and courier services have in the last 10 years faced a lot of competition from short messaging and emailing services that present real time response. 
However, the service has been supported through the difficult competition by government operations that largely rely on postal services, bulky mailing and courier services. 
By 2013, letter volumes, which were predominantly handled by Posta Uganda, had started to decline following a shift from traditional communication channels to the digital technology. 

A 2013 Uganda Bureau of Statistics report indicated then that the volume of letters handled by Posta had fallen by 30 per cent from 3.7 million in 2011 to 2.6 million. 
This, according to the report, indicated that Ugandans were sending fewer letters with some shifting to mobile phones, internet and social networking sites, which provide real time information exchange models. 

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The growth, the UCC report indicated, has also boosted growth in pickup and drop off centres for the delivery and processing of mail, registering a percentage growth of about 10 per cent in the three months under review. 
In the quarter under review, for instance, the total number of pickup and drop off centres increased from 483 in the quarter ended December 2020 to 571. 
The growth, the report noted, was supported by the rapid growth in e-commerce platforms such Jumia that have boosted numbers in last-mile deliveries. 

Pickup and drop off centres 

The growth, the UCC report indicated, has also boosted growth in pickup and drop off centres for the delivery and processing of mail, registering a percentage growth of about 10 per cent in only three months.                      In the quarter under review, for instance, the total number of pickup and drop off centres increased from 483 in the quarter ended December 2020 to 571.   The growth, the report noted, was supported by the rapid growth in e-commerce platforms such Jumia that have boosted numbers in last-mile deliveries.

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