The Postal Services are the services performed and facilities provided in connection with –the collection, transmission and delivery by land, water or air of postal articles; the issue of postage stamps and the use of franking machines; the issue and payment of money from one place to another or address commonly referred to as money ordering.[1] Biggar and Darryl R define Postal services as transportation or communication services for delivery of good and/or information from one point to another. They defer from physical delivery services in the volume and physical nature of mail, postal operators handle giving them advantage of economies of scale and scope of delivery.[2] The Postal system physically transports postal articles[3] either privately or publicly though many governments place restrictions on private systems.[4]
The history and development of Postal services dates back to (2400 BC) when an organized courier service was set in Egypt for the Pharaohs to diffuse written decrees in the territory of the State.[5] Several centuries later in 1775, the Second Continental Congress established the U.S. postal system naming Benjamin Franklin as its first postmaster general. Franklin established foundational pillars of today’s postal system.[6] The postal system oiled the communications revolution through first reliable infrastructure of communication introduced at the beginning of the 16th Century in central Europe.
Electronic Commerce generally involves the use of electronic systems such the Internet and other computer networks to facilitate the production, distribution, sale, and delivery of goods and services.[7] The Organization for Economic Corporation and Development (OECD) study on E-Commerce defines it as -“the sale or produce of goods or services, whether between businesses, household, individuals, governments, and other public or private organizations, conducted over computer mediated networks. The goods and services are ordered over those networks, but the payment and the ultimate delivery may be conducted on or off-line”[8]
The Global Perspective on the role of Postal Services in E-Commerce
The Universal Postal Union (UPU) is the global entity that regulates postal services. Established in 1874, UPU has 192 member countries and offers advisory, mediating and liaison role, and offers technical assistance to its members. It consists of four bodies, which include the Congress, the Council of Administration, the Postal Operations Council and the International Bureau. The key activity areas the UPU include the Financial services, General Policy Issues, Parcels, Postal economics, Sustainable development and technical cooperation.[9]
UPU has incrementally developed and adopted world postal strategies that have informed its work and development over the years. In 2005, it took a regional approach for implementation using 17 restricted unions. The 25th Universal Congress in Doha, Qatar in 2012 adopted a Doha Postal Strategy which focused on Improving the interoperability of the international postal networks; provision of technical knowledge and expertise related to the postal sector; promotion of innovative products and services; and fostering the sustainable development of the postal sector.[10]
The UPU developed partnerships with a wide range of peer international organizations to cooperate in various areas like postal financial services and financial inclusion; sustainable development and disaster risk management; postal security, customs and global supply chain; electronic services, e-commerce and the information society; trade facilitation; big data and statistics; development cooperation and technical cooperation among others.[11] On electronic services, e-commerce and the information society, the strategy focuses on collaborations with the United Nations Conference on Trade and Development, International Telecommunication Union, World Trade Organization; contributions to the World Summit on the Information Society.[12]
The Istanbul World Postal Strategy for 2017-2020 focuses on improving the interoperability of network infrastructure; ensuring sustainable and modern products; and fostering market and sector functioning.[13] Network interoperability[14] is the property that allows for unrestricted sharing of resources between different systems. This plays a huge role in how various innovative technologies connect and interplay in delivery of goods and services. Without any doubts, these strategic focuses have direct implications for e-commerce practice globally. Indices such as using the Internet, share of individuals with an account, secure Internet services are key indicators in assessing B2C E-Commerce by the United Nations Conference on Trade and Development.
Postal Services and E-Commerce
In the recent United Nations Conference on Trade and Development business-to-consumer e-commerce index 2018[15], African countries are rated lagging behind most of the world in e-commerce. Of 43 African Countries assessed of 151 nations world wide, most blaze the trail from behind. The key areas of consideration include share of individuals using the Internet; share of individuals with an account; secure Internet servers, and postal reliability score.
The top ten countries leading the index are The Netherlands, Singapore, Switzerland, United Kingdom, Norway, Iceland, Ireland, Sweden, New Zealand and Denmark. The Netherlands replaced Luxembourg in the first place as a result of a sharp drop in Luxembourg’s postal reliability score. Singapore has increased values across all indicators. The key factor that specifically boosted the Singaporean position was Alibaba’s investment in the Singapore Post.[16]
The top 10 developing economies in the UNCTAD B2C E-commerce index 2018 like Singapore in second position and korea have perfect scores in postal reliability score at 100 which boosted their overall performance in the second and twenty first positions respectively.
The top 10 developing and transition economies in the UNCTAD B2C E-commerce index 2018 in the Sub-Saharan Africa region are Mauritius, Nigeria, South Africa, Ghana, Kenya, Uganda, Botswana, Cameroon, Namibia and Gabon respectively. The key values that boosted the African performance are shares of individuals with an account followed by secure Internet servers. The area of least performance for the Africa region is Postal Reliability score trailing at 24. Besides Latin America and the Caribbean that performed just as bad as Africa in this index, the rest of the other regions scored relatively high in this area of Postal reliability.[17] The report observes “the region lags the rest of the world in terms of e-commerce readiness…. and as many as nine of the bottom ten countries are in Africa.” [18]
The report notes that “since 2014, sub-Saharan Africa has surpassed world growth on three of the indicators used in the index” These include account ownership, individuals using the Internet and secure Internet servers. A close assessment of the report on UPU Postal Reliability score, much as Mauritius and Nigeria score 66 and 85 respectively. Uganda trailed the list scoring 58 in the assessment. The significant improvement in the Postal Reliability is to explain for Nigeria’s frog leap into its envious position among most African Countries. Nigeria posts the highest number of shoppers and revenue collection from B2C e-commerce market in Africa.[19] The Postal services help in the reliable delivery of products purchased through e-commerce.
The e-commerce operations in Nigeria have been simplified through ensuring safety and security, revenue collection, cooperation between Customs/Express service providers, data exchange and cooperation between Customs/post.[20] There is high stakeholder involvement between the Customs Administration, Postal operators, Express service providers, E-Vendor platforms and other government entities through information and data sharing that has greatly boosted e-commerce. [21]
Customs Duty is as low as 5% where applicable. Gifts like parcels containing miscellaneous articles sent as gifts to welfare institutions are in all cases assessed on the declared value plus the normal addition for postage, except where the officer suspects flagrant under declaration.[22] These have significantly boosted the performance of e-commerce in Nigeria.
The Postal Services and E-Commerce in Uganda
The postal services in Uganda have largely reduced owing to the rise in electronic communication avenues like telephone/mobile phone sets, emails and other social media networks through which most communications are done. Along with this is the rise of reliable courier services provided by various transport services through the country. Many people are able to send and deliver postal articles and even bulky goods using various other means of transport services moving within and to various destinations efficiently, safely and fast enough thus lowering the use of postal address.
Most people who have postal addresses take a long time accessing or even receiving mails by post. The perception about the postal services is that it’s too slow and inefficient. The time taken to receive mails by post is unbearably long and owing to the fact that the postal numbers are paid for, many Ugandans find it an unreasonable cost.
In an attempt to revive its relevance, Posta Uganda through Uganda Registration Services Bureau now requires persons registering new businesses to acquire postal numbers for their entities. Through this a number of companies and organizations have been able to acquire postal addresses though whether the addresses get used for mailing purposes is rather mystical. The other efficient and highly used services are those of express service providers, which are used for national but mostly international mail delivery services.
The Uganda Communications Act, 2013 was enacted to consolidate and harmonize the Uganda Communications Act and the Electronic Media Act; and to reconstitute the Uganda Communications Commission and the Broadcasting Council into one body called Uganda Communications Commission and provide for other related matters. Section 3 of the Act sets the objects to among others enhance national coverage of communication services; expanding the existing variety of communication services and to include modern and innovative communication services; reducing the role of Government as an operator and encouraging private sector participation in the sector. Besides a provision on definitions of postal services, the Act provides for licensing of postal services, protection of postal articles, and limitation of a licensee,[23] there is nothing substantial about the Postal Services development in Uganda. Issues of the postal services seem to have taken a back seat in the economic development.
The Uganda Rapid e Trade Readiness Assessment Report observes in its findings,
“Efforts have been made to strengthen last-mile delivery in the national postal service network. Uganda Post Limited (UPL) has increased its delivery fleet and services for home delivery service, and the Government is in the process of providing each household with a formal postal code. Despite these improvements to the national postal service, a large portion of goods-based e-commerce is being delivered by express couriers or by third parties. Taxis services such as Uber Uganda, Friendship Taxi, SafeBoda and Quick Taxi already provide some transport logistics for e-commerce, and private couriers such as DHL Express, Yellow Pages Express and CourieMate Uganda also form an important part of the delivery logistics market. Bottlenecks remain in implementing the TFA Articles on expedited shipments and electronic payments. The absence of insurance companies providing services in this area increases the risk of e-commerce transactions.”[24]
The report notes among many challenges, the private sector not being adequately involved in policy making related to e-commerce; ICT infrastructure services not being well developed through the country with relatively low internet penetration in rural areas; the Excise Duty (Amendment) Act which imposes a 0.5 per cent levy on withdrawals through mobile money platforms is affecting consumer behavior with reference to payment solutions for e-commerce; the Data Protection and Privacy Bill not being enacted; lack of trust and fear of online transactions; and lack of adequate skills, information and assistance for entrepreneurs to use e-commerce platforms effectively for business.
It is recommended that Uganda Post Limited establish innovative partnerships with private actors to increase the coverage of goods based e-commerce delivers across the country; strengthen capacity of UPL border agencies; coordinate with custom services of neighboring countries; encourage insurance companies to enter into to the business. It is also proposed that UPL makes leverages the postal network outside the cities as agency for trade facilitation; improve the operational readiness for e-commerce (ORE) project to improve e-commerce delivery efficiency of UPL; and dedicated legislative provisions on expedited shipments be considered.[25]
Way forward
The Uganda Rapid e Trade Readiness Assessment Report[26] has come up with very candid recommendations, which will go a long way in improving e-commerce performance of the Uganda with regard to its trade payoffs.
It is apparent relevant data and revenue is greatly lost through the disjointed approach to conducting postal services. The Uganda Post Limited needs to reinvent itself with regard to consolidating data and exchange with regard to e-commerce. Vital linkages between the postal services and other government agencies like Uganda Revenue Authority’s Customs Department, the Ministry of Trade, Ministry of ICT and Ministry of Transport among others private sector stakeholders should be developed.
Beyond data sharing, a clear coordination platform or forum must be identified through which e commerce policies and activities may be conducted instead of fragmented and individualized efforts by small and sometimes parallel government agencies.
The government should zealously pay attention towards enhancing the Internet penetration through provision of necessary infrastructure across the country and removing inhibitions to e-commerce like the OTT Tax that impact on accessing social media sites.
It is necessary, that an e-commerce policy needs to be developed for Uganda, which narrows down how the country can practically benefit from the e economy. Uganda needs to develop a clear vision for e-commerce that fits clearly into the National Development Plans.
To gunner the necessary private sector participation, the government must reach out through Public Private Partnerships (PPP), public dialogues and continuous sensitization. Key capacity building avenues need to be popularized to ensure the deeper skills development, education, and information sharing which is able to enhance policy formation in the area.
[1] Section 2, Uganda Communications Act, 2013
[2] Biggar, Darryl R., Promoting Competition in Postal Services (September 1999). Roundtables on Competition Policy No. 24. Available at SSRN: https://ssrn.com/abstract=185092 or http://dx.doi.org/10.2139/ssrn.185092 pg. 22
[3] Postal article includes any letter, postcard, newspaper, book, document, pamphlet, pattern, sample packet, small packet, parcel package or other article tendered for dispatch or specified in the International Postal Union or in the license of an operator. See Section 2, Uganda Communications Act, 2013
[4] https://en.wikipedia.org/wiki/Mail#Postal_reforms visited on December 14, 18
[5] https://www.google.com/search?client=firefox-b-ab&q=Where+did+Postal+Service+first+develop%3F&sa=X&ved=2ahUKEwiekrTBpavfAhX8RBUIHRocAlgQzmd6BAgHEAk&biw=1280&bih=636 visited December 19, 2018
[6] https://www.history.com/this-day-in-history/u-s-postal-system-established visited December 14, 18
[7] Charles E. McLure, Jr., ‘Taxation of Electronic Commerce in the European Union’ Hoover Institution, Stanford University; Peter Scisco, ‘Electronic Commerce’ Microsoft® Encarta® 2009 Microsoft Corporation, 2008 Redmond, WA; Chaudhury, et al, e-Business and e-Commerce Infrastructure, McGraw-Hill (2002) ISBN 0-07-247875-6; U.S Treasury Department (1996,1¶3.2.1).
[8] Organization for Economic Corporation and Development, (2002), Measuring the Information Economy, 89. http://www.oecd.org/internet/ieconomy/2771174.pdf also cited in B. Oyeyinka&Kaushalesh Lal: Sectoral Pattern of E-Business Adoption in Developing Countries; Institute of New Technologies (INTECH) April 2004, p.7, Retrieved on January 9, 2019.
[9] http://www.upu.int/en/the-upu/the-upu.html visited January 9, 2019
[10] http://news.upu.int/insight/world-postal-strategy/ visited January 9, 2019
[11]http://www.upu.int/uploads/tx_sbdownloader/reportOnTheActivitiesOfTheInternationalBureauEn.pdf, pg. 21 visited January 9, 2019
[12] Supra, note 11
[13] ibid, pg. 26
[14] https://www.techopedia.com/definition/631/interoperability visited January 9, 2019
[15] https://unctad.org/en/PublicationsLibrary/tn_unctad_ict4d12_en.pdf visited December 14, 2018
[16] ibid
[17] ibid
[18] Supra Note 8
[19] https://unctad.org/en/pages/PressRelease.aspx?OriginalVersionID=493 visited January 8, 2019
[20] http://www.wcoomd.org//media/wco/public/global/pdf/topics/facilitation/activities-and-programmes/ecommerce/case-study/nigeria_case-study-on-cross_border-ecommerce.pdf visited January 8, 2019
[21] Ibid. The report notes, “The local e-commerce operators that do business within Nigeria such as Jumia and Konga, function well and collaborate internally with Government Agencies but the E-Commerce Operators that do business across borders such as Mall Boxes Ltd, owners of Mall for Africa platform, do not collaborate with Government Agencies in the area of data sharing, risk and security, and do not clear their cargo as E-commerce cargo but as general cargo.”
[22] ibid.
[23] See sections 33, to 36 of the Uganda Communications Act, 2013.
[24] https://unctad.org/en/PublicationsLibrary/dtlstict2018d9_en.pdf visited on January 8, 2019
[25] ibid.
[26] See note 24
Official Citation: Candia, Emmanuel, Why Postal Services Matter in E-Commerce Development in Uganda (January 12, 2019). Available at SSRN: https://ssrn.com/abstract=
