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Struggling Posta lays strategy to boost earnings

By Frankline Sunday | November 4th 2015 at 00:00:00 GMT +0300

Post Master General Enock Kinara

Kenya’s struggling postal service, Postal Corporation of Kenya (PCK), is banking on a revamped strategy including venturing into transport services to turn around its dwindling fortunes.

PCK is relying on a three-part strategy to grow revenue five-fold over the next three years through exploiting e-commerce, money transfer and digital home delivery of letters and parcels. Also on the cards is a plan to introduce bus services to serve both passenger and parcel businesses across the country.

“Our current revenue base stands at Sh3.6 billion and we are looking to boost this to Sh14 billion over the next three years,” expalined Dr Enock Kinara, PCK Postmaster General.

Kinara, however, put the Government regulator, the Communications Authority of Kenya (CA) on the spot for failing to rein in on rogue private sector players who are undercutting the State-owned  service provider.

“The delivery of mail below 350 grammes should be the prerogative of the PCK so that the service can be provided to marginalised areas at low costs, but the CA keeps licensing new players who offer the same service, undercutting us,” he said.

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A recent sector statistics report indicates that the number of letters sent within the country in the 2014/2015 financial year stood at 59.4 million, a 0.6 per cent increase compared to the 59.1 million letters sent in the previous financial year.

In addition to this, the number of courier items sent saw a 2.6 per cent drop from the 2.6 million delivered in the 2013/2014 financial year to the 2.5 million delivered in the 20014/2015 financial year. Letters sent internationally however saw a 40 per cent jump, from 3.7 to 5.2 million in the period under review.

PCK has come under pressure in recent years forcing the corporation to adopt new business practices to survive the onslaught from the internet and mobile technology.

“We are looking at the prospect of introducing digital mail boxes at estates that will be used to deliver letters and parcels and already we have partnerships with two e-commerce sites and we hope to scale this up,” said  Kinara. He reckoned the bus service venture is awaiting approval from the National Transport Service Commission of Kenya before it can be launched. The service, he said, will reduce tariffs charged for parcel and letter transportation.

The mail boxes are a departure from the private mail boxes used in developed countries and will be placed in strategic places in estates and used collectively with consumers using unique codes provided by PCK to collect or drop off letters or parcels.

However, PCK acknowledges several challenges limit its efficiency, making it difficult to compete with other private sector players.

“Each year we spend Sh650 million on maintaining centres that are commercially unviable but because of our mandate to provide universal services to Kenyans, we cannot cut off these responsibilities,” explained Kinara.

Postal Corporation of Kenya postal services
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