SAPO is lobbying the state to force dysfunction on citizens

Zakhele Mthembu BA Law LLB (Wits) is a legal researcher at the Free Market Foundation.

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This article was first published on City Press on 9 May 2022

SAPO is lobbying the state to force dysfunction on citizens

When one buys something, it is a basic assumption that what they have bought is theirs. It is a basic and just assumption that they get to choose how what they have bought is handled and delivered to them. According to the Post Office of South Africa (SAPO) though, these assumptions are absurd.
SAPO has been embattled in financial difficulties for a while. Like most state-owned entities under the ANC government, its performance has slowly deteriorated over the years. Stories of citizens waiting for months at a minimum for their parcels are a dime a dozen.
In an effort to remedy this situation, SAPO is lobbying the state to force us as citizens to have them and their dysfunctional systems deliver our goods. The Post Office is proposing a law that will bar couriers from delivering parcels of 1kg or less. Instead of improving their service and being chosen willingly in the market, they seek to use state power to save themselves from being entirely irrelevant.
Most people have sentimental attachments to SOEs. The thought of an SOE going bankrupt – like thousands of companies do on a daily basis – seems as weird as a talking animal. Yet, for survival, SOEs must commit injustice after injustice in the market. For their survival, SOEs mostly need the use of state legislative force to be shielded from market forces.
What those who don't want SOEs to fail don't realize, is the fact that failure in the market means that those resources that were tied up doing what people obviously didn't find useful will be freed up for productive activities when that business fails. So, when a failing business is continually bailed out by the state (and the taxpayer), the effect is larger in the lost opportunities that could be pursued with those resources, had there been no bailout or intervention in the form of legislative protection from market competition.
The Competition Commission has been silent on the matter proposed by SAPO. The idea that there is a segment of the market that ought to be free from competition (the 1kg or less parcel market) is contrary to every tenet of anti-trust law; misguided as those tenets may be. A single company being protected from competition is contrary to a free and efficient market. Isn’t this an imperative which must be pursued by competition authorities?
In South Africa we have an issue with consumer rights; more aptly, their disregard especially concerning consumer choice in a market. If a particular consumer chooses for their parcel to be delivered by a company either than the Post Office then as humans, with dignity and freedom, they are free to do so. Their being forced to choose SAPO only is an unjust and unjustified inhibition on the basic freedoms of being a human.
The principle of freely choosing where and what to buy, from whom, is necessary for being human. These determinations are necessary for a healthy economy. More economic freedom leads to better living conditions; the literature on this is plentiful. Yet, government and its enterprises seem to think decreasing economic freedom and choices in a struggling economy like ours is the way to go.
SAPO has no right nor entitlement to our parcels that are 1kg or less. The fact that this needs to be said shows the anti-freedom stance that has been adopted by the government and its enterprises; as if they forgot that our freedoms are not given to us by the state or government. They are a natural consequence of life. Entities like SAPO and the state are the results of the exercise of these freedoms.
South Africa currently has thriving courier businesses, delivering all manner of packages. These couriers were only able to succeed due to the sheer incompetence and inefficiency in economic terms, of SAPO. The fact that they exist shows that they are fulfilling a function for citizens. The state, seeking to eliminate productive businesses in an effort to protect an unproductive inefficient one would be the height of injustice.
Online companies that are reliant on couriers for their deliveries will suffer greatly. These companies have foregone SAPO for a reason, and simply barring them from using couriers will have an impact on their models. When SAPO predictably fails at doing deliveries as efficiently as private companies, this will have a knock on effect on these online retailers; another negative ingredient our weakened economy doesn't need.
SAPO has no business forcing itself on consumers. Protected markets, like what SAPO is proposing, are economically inefficient. The electricity market in South Africa, protected by legislation for Eskom, should be instructive. The lack of alternative that is the norm in the energy market will be transferred to the parcel business. One shudders at the thought of the chaos!
SAPO should focus on ways to improve its business model and overall operations. Instead of seeking to be protected from competition, it should welcome the ingenuity of South Africans to start businesses that make up for the lack of capacity or just basic incompetence of SAPO.
Instead of seeking to monopolise the courier space, more competition within it should be permitted. The last thing our economy needs are more barricaded markets, further depressing our less than encouraging economic prospects.

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