South African Parcel Service a Success as Private Company

JOHANNESBURG – Speed Services Couriers, the privatized parcel division of the South African post office, believes creating a separate identity from its state-owned parent company lies at the heart of its success.

“The South African post office didn’t have a very good reputation for service,” said Doug Smit, general manager for Speed Service Couriers.

“There was no next day service, so we accepted we had to create a new identity,” he said.

The deregulation started in 1991, but only got off the ground after President Mandela took office in 1994.

Speed Services Couriers now makes 200 million rand ($40 million) per annum and boasts an aircraft fleet. It delivers to 1385 points in South Africa and has 7 facilities.

“We are now reaching 90 percent of our delivery standards,” said Smit.

“We provide a very flexible service, which is most definitely customer driven,” he added.

Speed Services Couriers has added additional strings to its bow, as well. It developed a special distribution system for medicines needed by the chronically ill that allow call-in orders with next day delivery.

It is operating a film developing service, having

joined forces with Kodak to build film processing plants on their sites, where film is processed then delivered quickly to the customer.

Speed Services Couriers also works closely with several mail order houses. “Most of the time, goods are kept in stock,” said Smit. “But if they’re not in stock, we can get them transferred very quickly,” he added.

Given widespread personal security concerns, growth of home delivery is an enormous step forward. “It really is a breakthrough. People are very security conscious. If someone knocks at the door, they generally don’t answer,” he added.

The company sidestepped that concern through electronic and physical identity systems. Before parcels are delivered, customers are given a reference number and a detailed description of what the delivery person will look like.

Speed Services also has more plans for expansion.

“South Africa is very isolated,” said Smit. “People often have to go vast distances to buy goods.” So the company is planning a delivlery service for food and music procucts.

Mail delivery is so slow that “if people see an advert on television for a CD or appliance they have lost interest by the time they get it. We think 36 hours would be an ideal target time,” he said.

Continuing globalization and the end of South Africa’s pariah status is opening up new opportunities for delivery services, he said. “People here have similar wants and desires to other people in the world.”

The state-run post office is also undergoing transformation. There is currently a push to build post offices in all South Africa’s townships, as well as giving every South African an address – a major undertaking.

The post office is also trying to attract more black people to its ranks.

The South African Direct Marketing Association is working with the post office on these reforms.

“It is quite anxious to get things moving and is putting pressure on the post office because South Africa is such a huge market for countries all over the world,” he added.

— Lucy Jones

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