The performance of Uganda’s postal and courier sector shows an upward trajectory according to the latest market performance report released by the Uganda Communications Commission (UCC) for the quarter ended March 2023.
The report indicates that in the quarter ending March 2023, the domestic mail volumes witnessed an increase, reaching 188,625 mails up from the 182,370 mails recorded in the previous quarter ending December 2022 translating into a 3% increase.
The 3% jump in traffic is owed to the increased compliance levels in licensing and reporting.
The rise in domestic mail volumes is attributed to the entry of new licensees into the courier market, spurred by the heightened demand for door-to-door delivery services from domestic e-commerce businesses.
Despite the 3% growth in traffic, the biggest percentage of operators in the postal and courier sector are not licensed.
According to Section 33(1) of the Uganda Communications Act of 2013, a person shall not convey, deliver or distribute postal articles without a license issued under this Act.
The same law also states that all courier operators require a License to operate both in Uganda and abroad.
The license is obtained from Uganda Communications Commission.
However, there are about 40 operations licensed currently, which cover only 40% of the national business. That means that 60% of the business carried out currently, particularly on the courier side is not licensed.
This has a negative impact on the reputation of the Ugandan postal and courier sector as a whole. If customers have negative experiences with unlicensed operators, they may be less likely to use the sector in the future. This in return damages the sector’s reputation and make it more difficult for Ugandan businesses to compete in the global marketplace.
Additionally, the unlicensed postal and courier operators cause government to loses out on tax revenue.
Furthermore, unlicensed postal and courier operators have an unfair advantage over licensed operators, who have to comply with government regulations and pay taxes. This makes it difficult for licensed operators to compete, and it can lead to job losses in the sector.
In a bid to curb the vice, the UCC in September last year, issued a list of illegal/ unlicensed postal and courier service providers.
After the public notice, many unlicensed operators fulfilled the requirements and obtained the licenses from UCC. This raised the number of licenses operators from 17 to 40.
The Commission has also called on big corporations or people who do business with courier companies who do deliveries, banks, e-government, businesses to only work with operators that are licensed.
Post and courier services play a vital role in e-commerce by delivering the products that customers purchase online to their homes or businesses.
Without post and courier services, e-commerce would not be possible. Customers would not be able to receive the products they purchase online, and businesses would not be able to sell their products to customers all over the world.
The growth in traffic of postal and courier services shows that e-commerce has grown as well.
The rise in e-commerce demand in the digital era necessitated the courier sector to develop innovative Shop and Ship systems, aiming to provide seamless access to international online shopping platforms.
Since their inception, these systems have proven highly effective in resolving key issues concerning shipping addresses, reliable online shopping platforms, and trustworthy courier services.
With the Shop and Ship systems, users gain access to different shipping addresses situated in major global cities, granting them the freedom to shop and ship items from virtually any location worldwide.
East African Region
From January to March 2023, the post and courier market displayed growth in mail volumes received from East African countries
“Specifically, inbound mail volumes from East Africa witnessed an increase, totalling 3,832 mails at the end of March 2023, up from 3,669 mails recorded in the quarter ending December 2022. This growth represents a 12% quarter-on-quarter expansion,” the UCC report reads.
Mail volumes originating from Uganda and destined for other East African countries grew to 1,584 mails from 1,235 mails registered in December 2022, representing a 22% quarter – on quarter expansion. This growth is largely
attributed to new licenses availing themselves of the benefits offered by the East African Community and export promotion initiatives
The mail volumes received in Uganda from other parts of the world grew to 104,437 mails from 97,214 mails in December 2022, translating into 7% quarter on quarter growth.
The mails sent from Uganda to other parts of the world grew by more than 6,000 mails. This brings the total number of the mails sent from Uganda to other parts of the world to 87,104 mails at the end of March 2023.