The numbers that show why the Post Office is dead and must be shut down

Key topics:SA Post Office lost R9.77bn, branches and staff down 74% since 2014Service failures: mail delivery hit all-time low of 45% in 2024Private couriers now dominate, Post Office unable to meet obligations.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Hanno Labuschagne.In the 12 years since the Post Office was first declared technically insolvent, the entity has recorded cumulative losses of nearly R10 billion.Its branches and employees have also been cut by roughly three-quarters, while annual revenue has shrunk nearly 80%.Even with taxpayer bailouts of R12.1 billion over that period, the Post Office has been unable to recover from years of gross mismanagement, a crippling staff strike, and a reputation for late or lost parcels.The entity is technically considered South Africa’s oldest state-owned company, with its origins dating back 233 years.For most of its existence, the Post Office was not profitable but was regarded as irreplaceable for connecting people through post and telecoms.Even after Telkom was spun off from the company in the 1990s, its mailing services remained vital while the Internet was still in its infancy.The Post Office reported its first-ever profit in the early 2000s. It looked well-positioned to capitalise on the boom in demand for package transport and delivery services with the emergence of e-commerce.However, poor management and surging costs saw it return to a loss in less than a decade. Post Office workers also developed a reputation for poor service delivery and package theft..Read more:.Ex-CEO demands probe into vanished billions at Post Office.These factors ultimately led to the Post Office becoming technically insolvent in 2014, which was the start of the government pouring billions of rand in taxpayer money to keep it afloat.There were short-lived signs of a recovery during the tenure of CEO Mark Barnes, which helped build up the company’s assets to R5.19 billion by 2019.Four years into his departure, the net asset value had plummeted to a negative R7.9 billion. The Post Office was placed in business rescue in July 2023, after which it received another bailout of R2.4 billion.While the accepted business rescue plan included another R3.8 billion bailout to complete the entity’s turnaround, the government is only willing to provide R1.8 billion over the next three years.The table below summarises the decline of the Post Office from 2014 to 2025 and shows why it is a shell of its former self..Private companies pick up the slack.Due to its significantly declined footprint, the Post Office is no longer able to fulfil its universal service obligations of providing all South Africans with affordable mail services.Its minimum mail delivery standard has not met the legally-mandated target of 92% for well over a decade.In 2024, it reached an all-time low of 45.15%. This meant less than half the mail it carried was delivered within five days..Read more:.SA Post Office crisis: Rating the most affordable alternatives.Despite this failure, the Independent Communications Authority of South Africa has never penalised the Post Office.For all intents and purposes, the Post Office has been completely replaced by private mail and courier services.PostNet was first to grab some of its market share in traditional mail in the early 2000s, while private couriers like The Courier Guy picked up the slack in parcel transport and deliveries.Package dropoff and collection services such as Pep’s Paxi, Bob Box, and The Courier Guy’s locker service (formerly known as Pudo) offer affordable and reliable alternatives to the Post Office.Efficient Group chief economist Dawie Roodt believes that the South African Post Office is effectively dead and should be shut down, like “many other state-owned enterprises.”“There’s no reason why we should have a Post Office. That thing is dead, completely, totally dead,” he said. “Close it down immediately.”.This article was first published by MyBroadband and is republished with permission

The numbers that show why the Post Office is dead and must be shut down

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