Lossmaking Posta turns to SMEs for new lease of life


Postmaster-General Dan Kagwe. FILE PHOTO | NMG

The Postal Corporation of Kenya (PCK) has inked a deal that will see it offer postal and courier services to small and medium enterprises (SMEs), coming as a major boost for the State Corporation which has been making losses.

Postmaster-General Dan Kagwe told the Business Daily that Posta had struck a deal with the Small and Medium Enterprise [SME] Support Centre to offer logistic services to over 2,500 of its members.

The contract will see SMEs pay a one-off lifetime service fee of Sh1,000 irrespective of the number of times they send their goods via Posta.

Posta will however be paid for the conveyance of goods delivered on their behalf under the platform that also aims to boost e-commerce.

“The SMEs will pay us directly a fixed amount of Sh1,000 to take advantage of the Posta collaboration benefits. Posta is paid for conveyance of the goods,” said SME Resource Centre chief executive Linda Onyango.

In the arrangement, a parcel weighing 5 kilograms will be charged a Sh450 delivery fee from Nairobi to Mombasa. Every added Kilogram will attract an extra Sh35.

“Our pricing is on a scale but very affordable,” said Onyango.

This comes at a time when the State agency’s revenue has taken a hit from the effects of Internet-based mailing systems and the entry of private couriers.

Last year, the corporation increased the cost of sending letters by up to Sh55 after getting regulatory approvals from the Communications Authority of Kenya (CA).

Since the onset of the Covid-19 pandemic, the postman has identified the logistics sector as a key focus area for revenue growth, informed by changes in consumer behaviour and new shopping trends.

As consumers increasingly turn to e-commerce for all their shopping needs, speedy fulfillment and distribution have become the expectation of every online shopping experience.