Postal service

The Urgent Need to Reposition the Nigerian Postal Service to Be More Competitive

The Nigerian e-commerce industry has the capacity to triple its current performance if properly managed and given the necessary attention.

When this is done, it will help reposition the industry to be more competitive; activate the growth of the national economy, create businesses, jobs and attract more investment opportunities.

The Nigerian Postal Service (NIPOST) is one of the major business sectors in the country that urgently needs to be upgraded to be more productive, efficient and responsive just like its peers in other countries. Indeed, it has great potential and needs to be stimulated for more growth, promoting globalization and facilitating the rise of e-commerce in Nigeria.

It is important to affirm that postal services are an essential part of every economy globally and their roles are crucial to the economies of nations. There is not a single family in any country that is not directly or indirectly affected by the services rendered by their postal agency.

While the emergence of modern digital technology and information system is necessary to drive positive change in organizations, it is important that the Nigerian government supports its postal service by investing more in the use of digital technology to curb the constant loss of customer packages, violation of postal shipments and delays.

Adopting the use of modern technology systems (such as GPS, blockchain, IoT, machine learning, etc.) will help facilitate parcel tracking and strengthen traceability. With the help of anti-theft GPS, near real-time parcel locations can be received as well as separation of parcels in transit.

This would also help strengthen additional security measures to prevent loss of customer-owned packages. If at the time of collecting a customer’s parcels real-time information is sent to the customer after the first scan, it will be almost impossible for the agency to deny its responsibility in the event of loss of parcels.

Blockchain technology, which is another modern digital system, can also be used to monitor, distribute, move and track parcels as well as update records and performance. The use of Internet of Things (IoT) sensors can also be used to determine the amount of space occupied by a shipment as well as calculate the shipping cost in advance, unlike what is available at the fulfillment center packages to Ikeja.

The act of the Nigerian Postal Service using outdated manual processes is unsustainable and this is responsible for declining customers and mail volumes. This has made the Nigerian Postal Service unattractive and less competitive against its private sector competitors eg FedEx, DHL, third party agents, to name a few.

Although we have post offices in every nook and corner of Nigeria, which gives it an edge over other players in terms of spread, unfortunately, it has not been able to leverage it as a strength.

While the Nigerian Postal Service (NIPOST) generated a total of 19.7 billion naira in 2018 (7 billion naira from its core business and 12.7 billion naira from electronic stamp duty), it is sad to note that the agency’s performance has fallen further since 2018.

It is also worth noting that in June 2021, the Nigerian Senate passed the NIPOST Repeal and Reinstatement Bill, which had limited the agency to only postal operations in the country, it was not able to capitalize on our population advantage (over 200 million people) as well as the growth of the e-commerce industry due to the recent pandemic to develop.

The Nigerian e-commerce market was estimated to be around $12 billion, which was also not reflected in the performance of the Nigerian Postal Service. In addition, the Nigerian e-commerce market revenue is expected to reach $8.5 billion in 2022 and its revenue is expected to exhibit an annual growth rate (CAGR 2022-2025) of 13.86%, which will result in a volume projected market size of $12.58 billion by 2025.

The agency’s poor performance is partly responsible for why aggrieved National Mail Route Delivery Service (NMRDS) operators a few months ago urged the Minister of Communications and Digital Economy, Isa Pantami, to take drastic action in the face of NIPOST’s failure to redeem accountability. to their members in the past eight months or face legal action.

While the seven-day ultimatum issued then by NMRDS lawyer, Wole Abidakun expressed concern over NIPOST’s failure to pay the 200 million naira due to the operators, the tax deductions made on the operators’ account during the last five years by NIPOST have not been handed over to the Federal Revenue Service (FIRS).

They claimed that this had prevented operators from accessing their tax clearance over the years and made it difficult for their clients to survive in addition to preventing them from bidding for jobs at other organisations.

The petition was also sent to the then NIPOST Postmaster General, Ismail Adebayo Adewusi.

These challenges facing the Nigerian Postal Service can be partly attributed to lack of government attention, poor management systems, lack of use of modern digital technology system as well as lack of trained experts to drive the necessary change.

This negligence could be responsible for why in the proposed 2022 budget of N160.593 billion, the Nigerian Communications Satellite (NIGCOMSAT) and National Identity Management Commission (NIMC) got N5.440 billion and 46.533 billion naira in capital votes, the ministry had 85.231 billion naira, while NIPOST received nothing.

Other factors responsible for the poor performance of NIPOST are the low level of investment, large but outdated infrastructure and facilities; a dysfunctional internal system, unreimbursed pension payments, an untrained and unmotivated workforce, etc. made the agency unattractive, unreliable and unsustainable.

There has been an outcry from customers using NIPOST services to send parcels overseas resulting in complaints of lost and undeliverable parcels resulting in lost revenue, downtime and reputation on the part of the agency.

In a developed country, the agency will face heavy compensation burdens and could sometimes result in total closure. The Nigerian Postal Service urgently needs to rebuild its lost credibility and reputation with customers.

For the Nigerian Postal Service to also perform better, it needs to introduce a well sound insurance scheme in which the couriers can be insured against risks such as theft, vandalism and loss should any of these risks. Appropriate compensation must be paid to customers.

Read also: NIPOST will deploy a digitized postal code to fight against insecurity and fraud on the Internet

It also needs to hire professionals in digital technology, business management, sales, supply chain management and logistics experts to reposition the agency to be more competitive. , productive and profitable.

Indeed, the advent of the COVID-19 pandemic has opened up more business opportunities for the agency, as personal and consumer cargo that would have been moved by travelers during travels is now routed only through agents of logistics and courier – and it seems to have come to stay. This has led stakeholders to realize the importance of smooth urban movement of goods and services, thereby increasing the market for e-commerce.

Moreover, as the growth of e-commerce businesses has resulted in an increasing demand in delivery management. Therefore, providing better services will increase competition and hence restructuring policies will open up the market, attract new investors, spawn more small and medium-sized enterprises (SMEs) and make it more business-friendly.

Finally, the sector must also be given due attention in its areas of challenges such as infrastructure deficits, outdated policies, insecurity, high corruption rate, inadequate platform to receive customer feedback, fill gaps in knowledge and skills, etc.