Posta charts new path with robust logistics services : The Standard
Laura Mugese’s memory of the post office goes back to her days in school at Mukumu Girl’s Boarding Primary School.
Away from her family at the tender age of 10, the only way to keep in touch was through letters.
“My parents lived in Nakuru and I was sent to boarding school in Kakamega, the only way I could communicate with them was through letters since they could hardly make it for visiting day,” Ms Mugese says.
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“When we were reporting to school, postage stamps were part of our shopping list. When we did not have stamps, we wrote CTO on the envelope so that the owner can bear the postage fee,” she adds.
Through the 1990s and until a few years go, Mugese said, her parents kept a mail box at the post office in Nakuru.
Posta was at the centre of all communication; bank statements, electricity and water bills, school report forms and circulars, sometimes a subscription of Readers’ Digest or an occasional advertisement flyer.
But over the years, the queues at post offices have dwindled.
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Not even banks or service providers like Kenya Power or water firms which previously relied on the postal system to send out statements and bills to customers do so.
Against the instant communication brought by the proliferation of mobile technology, Posta’s white dove is flying through the storm, fighting the battle of its life – staying relevant in a fast paced technology-driven world.
That the previously iconic red letter boxes stand forgotten along streets of Nairobi and some even painted in green colour of Nairobi City County is indicative of the decline of Posta.
Yet the atmosphere at the corporation’s headquarters is optimistic, as it fashions itself as a logistics company.
In May, Posta launched the Big Four Agenda commemorative stamps, just a year after it launched a commemorative Northern White Rhino stamp to raise awareness of the endangered species.
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That Posta is still launching stamps at a time when the number of letters being sent is lowest is evocative.
While, Posta’s traditional revenue streams were stamp sales, box rentals and cash transfer, the proliferation of mobile technology has forced it to adapt its incomes.
Mail still remains Posta’s primary revenue earner. In the three year strategic plan, the corporation hopes to have earned about Sh8 billion out of the forecast Sh13 billion from sending letters.
According to figures from the Communication Authority, between January and March about 13 million letters were posted locally.
To shore up its finances, Posta recently announced a move into the logistics business, specifically clearing and forwarding, through the National Logistics Hub and Posta Cargo Services, which it hopes will give it a life-line.
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Dan Kagwe, Postal Corporation of Kenya Postmaster General noted that the courier business has grown tremendously over the years, as has clearing and forwarding and logistics.
Posta has adopted a number of recommendations including partnerships with online retailers such as Jumia to allow it to use postal services to deliver customers’ orders.
“Eventually we would like to form partnerships with vendors like Amazon and Alibaba because consumers are looking for trust and that is something that Posta has built over the years,” said Mr Kagwe who worked at Fedex, the US company involved in courier services.
Part of Posta’s growth plan involves collecting and distributing products purchased on the web and acting as an intermediary for e-commerce transactions.
This, Kagwe said, will go along way to aid vendors such as Amazon and fill the gap of deliveries to Kenya.
Former Information and Communication Permanent Secretary Bitange Ndemo believes that, to remain profitable, Posta, ought to centre its business on logistics.
“It will be suicide if they keep on relying on mail, they need to think first a logistics company and rebuild the trust consumers had in them. Mail might be declining but packages have a future,” he said.
Ndemo said the Universal Postal Union, a United Nations agency that deals with the coordination of postal policies among member countries, had linkages that Posta could take advantage of become an efficient logistics firm.
“Posta should have been the logistics firm that Kenya used to send Kenyan flowers to Europe because they have the network of partners and the capacity,” he said. The former PS also faulted the pace of digitising operations at Posta.
“It took them too long to realise that digital is it,” he said.
However, the government has attempted to change the direction Posta had taken, for instance, the current Postmaster General Kagwe worked at Fedex for nearly a decade, the company is involved in courier delivery services company.
According to the most recent report from Communication Authority, Posta has 623 outlets across the country.
However, a number of post offices in rural towns such as Tongaren and Bokoli in Bungoma County have closed down.
In Nyeri, for instance, Kimathi Way Branch and the Nyeri GPO are located on the same street and about 500 metres apart.
“Why should we pay rent when we can just combine it in one building? In those cases we are rectifying commercial mistakes. In Nyeri, we have just moved the boxes to the GPO so that it can make commercial sense,” Kagwe says.
“Traditionally, we were used to sitting and waiting for the people to come to us, but the world has changed, people want the service taken to them, so we must flip our thinking.”
In Nairobi, besides City Square Post Office and the GPO along Kenyatta Avenue which has been given a new lease of life by operating as Huduma Centres, the rest of the post offices only see a trickle of customers.
Through products such as M-Post, Posta is moving into more innovative products.
MPost uses a mobile phone as a postal address and through it users will receive notifications of received letters that will be delivered to the post office of the users convenience.
“We must come with products that fit in the next generation and one of those products must be virtual addressing system.
“We must come up with a more modern national addressing system for easy communication and then we need to promote the M Post service because eventually that will become an addressing system,” Kagwe says.
Other products that Posta has recently unveiled as it restructures its operations to remain competitive include Tunza Nyumba na Posta, EMS2Go, Postal Digital Parcel Locker and E-Njiwa.
Yet there are points of concurrence between technology and the reducing number of letter and packages still being sent.
Senders can now track the status of their letters and packages using the Posta website.
The influx of private courier firms in the area where EMS (Expedited Mail Service) by Posta had carved a niche dealt a heavy blow to the corporation. At present, there are 1,026 courier outlets competing with EMS.
The majority of employment applications to government require to be sent through post office.
For its patronage of Posta, the government has in a number of instances introduced policies that hurt the corporation. For example withdrawal of payment service to the Inua Jamii cash transfer beneficiaries.
The programme of giving cash to elderly people was piloted by Posta in Kwale and was carried out nationwide for a few years before it was later re-assigned to commercial banks.
“The silos in government have not bee kind to us,” Kagwe says, before adding that the government was harmonising the roles of corporation. “There is a lot of double work and so that government cannot utilise corporations that it has invested in.”
Other revenue streams for Posta have come from serving as an agent for National Bank, KCB, Diamond Trust Bank, Mpesa and Cooperative Bank.
However, in some post offices employees reported that they were only limited to withdrawal and could not take customers deposits.
Posta also has a transitioning work force, majority of the 2,890 staff will retire in the next three years.
“Most of the works force is retiring in the next three years, so it is easier to bring in new staff rather than firing people,” Kagwe says.
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