What you need to know:
- For a long time, Posta Uganda monopolised the postal and courier services. However, with the liberalisation of the sector in the 90s, a number of companies entered into the courier space, which has had to put up with evolving technology and alternative channels to survive
Before the advent of courier services, Posta was the thing. It was the most formal way of delivering parcels both locally and internationally.
Posta combined two services - postal and courier services – which are distinct but related systems for sending and delivering mail, packages, and other items from one location to another.
Postal services are largely government-operated and have remained so even with the advent of liberalisation, which freed courier services from the monopoly of Posta and a few multinationals.
In 1951, the British colonial government established Posta Uganda, making it the most extensive provider of postal services across the country.
Today, according to the Ministry of ICT under which Posta falls, is the still the most extensive postal delivery system with mail delivery posts of more than 86,000 boxes across the country spread across 300 post offices.
For a long time, Posta Uganda operated in a period when communication was limited to only a few channels, all of which were enjoyed by affluent families, and perhaps people in corporate and government jobs.
Landlines and postal addresses, few as they were, were the most dominant, supported by telegrammes and faxes that were mostly used for business and corporate communication within and outside Uganda.
Today, everything is in plenty. The arrival of the mobile phone and the internet has changed everything, yet the need for mail, parcel and safe goods delivery remains.
Which is why postal and courier services have had to go through many changes as they seek to feed off that which cannot be taken away by mobile phones and the internet.
The industry has grown both in size and innovation with more sophisticated innovations coming to compete with a growing list of alternatives.
Many courier companies have heavily deployed technology. A customer is now able to track their package in real time up to the last mile of delivery.
And for those that are less sophisticated, they have provisions as well. A call away, is sufficient for a client to know how far their delivery is and in how long it shall arrive.
In the beginning courier services were largely manual but technology and innovation have become part of the package.
Uganda Communications Commission puts the number of courier service providers to 42 companies. But with a large supply of informal couriers that are feeding off the growing demand for delivery services.
Courier services became more vital during Covid-19. In fact, most people discovered then that it was possible to transport a package without necessarily travelling along with it.
Deus Turyamureeba, is the commercial manager at Nation Courier, which also distributes and circulates Daily Monitor and other editions produced by Monitor Publications Limited.
Certainly, he says, as people searched for a faster way of couriering documents, packages and even heavy duty goods, someone had to come up with a solution.
And just like that, the courier business started slowly and informally, but has now grown into a multi-billion shilling business.
“We do the last mile pickup for clients within a radius of 10 kilometres in Kampala. We pick the parcel or package and then start charging you from our hub. Prices are structured on weight and distance,” he says.
Nation Courier has built a network of more than 140 agents. They receive parcels for safe keeping and last mile deliveries.
The company has a competitive advantage that allows it to deliver newspapers every morning to different parts of the country as well as dispatch parcels and packages with minimal delays.
Away from Nation Courier, there are others such as Minuteman Delivery, which Alexandra Karemire, the founder and managing director, says its start was circumstantial.
In 2020 Covid-19 struck at the heart of the global economy. It resulted into restrictions and movement was extremely difficult. To, Karemire this was an opportunity to explore.
“For me it was a learning experience. I was a travel consultant but I had to change. In this business I see growth every day,” she says.
Minuteman specialises in corporate deliveries such as in files, invoice and cheque delivery, pharmacy, insurance documents, online shops dealing with gifts, notebooks, bibles, mugs in and around Kampala.
Looking for business
When the colonial government was building Posta, they envisaged that it would do both courier and postal services.
Indeed, for a long it has been doing both services and continues to date. However, unlike Posta, which has a large network of offices and heavily relies on walk-in clients because of its postal set up, many courier businesses have to go out of their way to look for business.
For instance, Karemire says her business has largely benefited from client referrals with a few walk-ins now and then. However, she also does a lot of door-to-door sales and marketing.
“I walk into people’s offices and put the idea on the table. If they are willing, we start the negotiations,” she says, and notes that social media has provided her another avenue to promoter her business. Beyond just couriering parcels and packages, courier service providers have gone an extra mile to ensure that goods are not only delivered, but they are delivered in perfect condition and in event of damage, there are safeguards for compensation.
“We have clients but one must be innovative. For instance, most companies now insure their parcels. This is a selling trick that creates confidence and also helps offset losses in cases of theft in transit,” Turyamureeba says, and notes that in business you have to be efficient and turnaround time is the ultimate offer that will put you above the rest.
Nation Courier, he says, gets the largest share of its business from telecoms, which contribute at least 40 percent of company’s income.
Others include banks, government and walk-ins that entrust the company with moving or transporting letters, stock for telecoms, phone handsets, internet equipment, bank documents, and pharmaceuticals, among others.
“We also move perishable goods like newspapers, cold chains like blood and tests. However, the new business now in the market is solar. We have seen movement of solar equipment grow in the last few years,” Turyamureeba says.
And for Posta, there is a general feeling that whereas communication and courier services have changed, the company has taken long to adopt new technology.
However, James Arinaitwe, the Posta managing director, says that whereas their courier division has not innovated that much due to financial constraints, the postal division has outed one of the biggest innovation - e-posta.
“This is our lead innovation. We have created digitalised postal services. We are capitalising on e-addresses, which is a shift from the traditional post office boxes,” he says.
The new innovation allows Posta to issues limitless addresses beyond the current 86,000 boxes, which carry a cost burden of putting in place offices where post boxes are mounted.
“Right now, we can give limitless addresses. e-addresses have given us an edge in revenues,” he says, and notes that revenue from issuing postal addresses has gone up by 35 percent, from Shs1.5b to Shs2.1b annually. On the courier division, Arinaitwe says they have a fleet of buses that have helped Posta remain competitive in parcel and packages delivery.
However, Arinaitwe concedes that there is need for more innovation because the communication and courier services landscape is “no longer a brick and mortar” affair.
Indeed, whereas he says, a large share of its market has been eaten by competition, Posta still has an upper hand when it comes to couriering international and government mail. Posta revenues, just like other entities, has experienced a decline, reducing to Shs17.2 in 2021, before falling further to Shs15.2b in 2022.
But even with the growth highlighted, Turyamureeba says the informality in the sector remains a challenge with only 10 percent of the courier and delivery services business handled by formally registered businesses.
“We have many buses, trucks, boda bodas, and food vending companies running courier services, yet it is illegal. Government needs to eliminate these illegalities,” he says.
Courier and postal business is regulated by Uganda Communications Commission.
Beyond the informalities, Karemire says it is a hard paper to start operating a courier service company.
There are so many payments required, she says. “You must have a KCCA operating licence, goods-in-transit licence, insurance for riders and the goods. All this is very high. And when it comes to UCC, you can’t imagine but we are required to pay in dollars,” she says.
Delivery costs are also a challenge, and they have been worsened by the volatile nature of fuel prices, which has been experienced in the few years. This has been worsened by vendors who own in-house delivery services as well as boda bodas and commuter taxis, trucks and buses that are illegally couriering parcels and packages at the exepnse of registered companies.
While this is a challenge for mail and courier service providers, some people such as Lenic Isabirye, the country operations manager at Sunflower Investments Limited, says they have found it convenient to deal with informal couriers such as commuter taxis.
“I simply give the driver of a commuter taxi in Iganga my package and a number to call when they reach Kampala. At just Shs5,000 the package will be in Kampala on the same day. Courier companies will need more time to deliver,” he says.