Business Hilights
Tracking Nigeria's Headline Business News Online

(Special Report) Can’t NIPOST transform self to become Africa’s logistics giant?

Last week Thursday, we did a story (https://businesshilights.com.ng/just-in-after-loss-of-stamp-duty-to-firs-nipost-rushes-to-ncc-for-relevance/), wherein we revealed that the Nigerian Postal Service (NIPOST) is running helter-skelter combing for a partner to remain relevant as an agency of the government.

We are elated that several readers of the story found it pertinent to call us for accolades while some saw nothing wrong about NIPOST looking for partners when it can on itself, innovate and come up with strategic business ideas that can make it independently relevant.

Royal Mail UK
Fleet of Royal Mail UK

Business Hilights Publication was surprised when a follower of our stories in the UK called us and gave powerful insights on what Royal Mail Plc did in the UK and what USPS is doing in United States. The caller further explained that several postal agencies across the world had been thinking outside the box to remain in business especially in logistics handling and managment.

Fact checks showed that in the UK, the Royal Mail Group (RMG) plc till today provides mail collection and delivery services throughout the UK. Letters are deposited in a post box, taken to a post office, or collected in bulk from businesses. Royal Mail owns and maintains the UK’s distinctive red pillar boxes, first introduced in 1852, many of which bear the initials of the reigning monarch.

Deliveries are made at least once every day except Sundays and bank holidays at uniform charges for all UK destinations. Royal Mail generally aims to make first class deliveries the next business day throughout the nation

USPS truck
USPS fleet

For most of its history, the Royal Mail was a public service, operating as a government department or public corporation. Following the Postal Services Act 2011, a majority of the shares in Royal Mail were floated on the London Stock Exchange in 2013. The UK government initially retained a 30% stake in Royal Mail, but sold its remaining shares in 2015, ending 499 years of state ownership. It is a constituent of the FTSE 250 Index.

Today in the UK, RMG remains a force in both European and global logistics space.

NIPOST NMfBOn the other hand, in the United States, the United States Postal Service (USPS) is still operationally relevant as the government has on advent of modern technology, brought in restructuring and laws that helped it retain logistics dominance.

Now, FedEx and United Parcel Service (UPS) directly compete with USPS Express Mail and package delivery services, making nationwide deliveries of urgent letters and packages. Due to the postal monopoly, they are not allowed to deliver non-urgent letters and may not directly ship to U.S. Mail boxes at residential and commercial destinations. However, both companies have transit agreements with the USPS in which an item can be dropped off with either FedEx or UPS who will then provide shipment up to the destination post office serving the intended recipient where it will be transferred for delivery to the U.S. Mail destination, including Post Office Box destinations.

Although USPS and FedEx are direct competitors, USPS contracts with FedEx for air transport of 2–3 Day Priority Mail and Priority Mail Express (typically delivered overnight).

NIPOST stampFrom the above example, it has become clear that last week’s Save Our Soul (SOS) visit by the team of Nigerian Postal Service (NIPOST) officials led by its chief executive, Dr. Ismail Adewusi to the Executive Vice Chairman of the Nigerian Communications Commission (NCC) seeking for collaboration to remain relevant can be adjudged a case of lack of business development intelligence in the agency.

Though in his remark, the Postmaster General of NIPOST, Dr Adewusi, explained that the purpose of the courtesy visit by NIPOST to the Commission was “to strengthen the relationship between both agencies,” industry analysts say the target of partnering NCC because of the deep funds languishing at the Universal Service Provision Fund (USPF) cannot work.

This is because the real control of the Department seems to have been detached and operationally cornered by the Minister, Dr Isa Pantami, who has tactically domiciled same in his Ministry.

Explaining more, a Lagos IT expert, who pleaded anonymity described the call for collaboration with NCC as sign of poor business development mentality in the midst of plenty and massive infrastructure that had remained underutilized over time.

The expert made it clear that “NIPOST has not found it necessary to rightly think outside the box simply because it has continued to feed fat on budgetary allocation from year to year without any meaningful contribution.

“I think if NIPOST thinks fast enough especially since the onset of GSM revolution in the year 2000 which technically rendered it useless, by now, it would have been a continental leader in logistics.

“Why do I say so? I said this because with NIPOST’s nationwide presence and even every local government area, it can run the most seamless logistics business and by now, it may have gone international.

“I know that it has EMS Express or something like that, but it is not serious because I cannot see any form of innovation in the last decade.

“So rushing to NCC for collaboration wont workout anything because NIPOST failed to think outside the box and that is why it has remained redundant in the box.

Fidelity Agent Banking
L-r: Head Digital Financial Services, Central Bank of Nigeria (CBN), Mr Stephen Ambore; Managing Director, Threeline Ltd, Mr. Femi Omogbenugu; Deputy Managing Director, Fidelity Bank Plc, Mohammed Balarabe; Postmaster General/CEO, NIPOST , Mr Bisi Adegbuyi; Head Northern Directorate, Fidelity Bank, Hassan Imam, and GM, Financial Service Business Unit, NIPOST, Muktar Baba, during the launch of bank@post; a TSA/Agent Banking initiative between NIPOST and Fidelity Bank in Abuja on Thursday, June 13, 2019

Business Hilights recalls that Dr Adewusi noted before the EVC of NCC, Prof Umar Danbatta that the vision for NIPOST by the Federal Government “is to ensure that it continues to play the role of universal service postage as well as offering auxiliary services such as transportation logistics and financial services. So, the mandate of the new Governing Board of NIPOST is to ensure that NIPOST is at the frontiers of the services rendered.”

NIPOST boss further claimed that the agency has been playing more active roles in taking millions of Nigerians in rural communities out of poverty, but failed to give instances on the exact things it does in rural communities that are lifting them out of poverty.

The expert further argued that even though a possible partnership with NCC can be worked out in terms of Internet connectivity and broadband penetration in the rural areas where Internet access is limited, “that does not stop NIPOST in carting a niche for itself in growing its logistics services than displaying official laziness that has encouraged takeover of the sub sector by foreign firms or local firms with foreign links.