Postal services are defined as the receiving, collecting, dispatching, conveying and delivering of mail or postal items, as well as performing all services incidental to these primary tasks. In South Africa the structure of the postal market is divided into reserved and unreserved postal services, with only one company being permitted to operate in the restricted area of reserved postal services. This concept of an exclusive area for postal providers is built on the basis of a universal service obligation, a responsibility which must be provided by the South African Post Office (SAPO). Certain postal items up to a certain weight are currently in the exclusive domain of SAPO, a company wholly owned by the South African government. While reserved postal services are being supplied by the state monopoly, unreserved postal services are supplied by privately owned courier companies. This unreserved postal services area is competitive with market forces and economic realities dictating the business activities.

South African courier companies are active in more than 220 countries, moves over 6 million packages daily, own and operate more than 1200 aircraft and 200 000 trucks and delivery vehicles and generates revenues of more than $30 million. The courier industry in South Africa grows at 25% per year, a fact that can be attributed to the absence of any restrictions on foreign entry and competition. In contrast, the value of the postal industry is expected to decline gradually as the use of alternative methods of communication will arguably lead to a decline in traditional postal services. Therefore SAPO is increasingly exploring other markets while diversifying current affairs and offering additional services.

This paper examines this distinction between the postal and courier industries and explains the classification of the two types of services. The paper further explores the applicable domestic legislation in South Africa to determine the exact boundaries of the postal monopoly. International, regional and domestic commitments made in these two sectors are also discussed to provide a general outline of the current liberalisation process in South Africa.

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