Poor Regulation Cripples Courier Business

"Business before now was booming for the private courier operators in the country, most whom left the big foreign names to start their own company after years of meritorious service. However the sub sector now faces serious challenges and operators blame NIPOST for their woes" 

MANY local private courier services operators in Nigeria are fast winding up their businesses due to the unfavourable business environment and poor regulation from the government owned Nigeria Postal service, NIPOST.

 Investigation traced the genesis of the calamity that has befallen the private courier operators to the improper regulation from NIPOST following its battle for survival when the telecoms revolution started affecting the business of NIPOST.

Business is no more booming for the private courier operators who once were actually the drivers of the industry, and the operators blame the dual personality of NIPOST as an operator and a regulator for their predicament.

It was gathered that the present state of regulation in the industry, as well as government’s unwillingness to respond to their plight made the fortunes of the sector nose-dive.

For instance, sometime in 2013, NIPOST introduced new regulations into the industry, which according to the small courier firms was cleverly designed to push them out of business.

NIPOST through its Courier Regulatory Department, CRD introduced new licensing and renewal fees under which, new companies or individuals seeking to float courier firm would forward application form to the Senior Assistant Postmaster General, CRD, with the license fee of N2m for domestic or national operation, or N10m for international courier operations together with a non-refundable fee of N20, 000.

An inspection team from CRD would visit at least five branches and head office of the prospective courier operator and the success of the inspection entitle the prospective operator to a new courier license.

Also, under the new fee regime, renewal fee was pegged at N500, 000 for domestic operators while their international counterparts are to pay N2m.

Some of the information required from the prospective companies include, but limited to Certified True copy of Certificate of Incorporation; Memorandum/Articles of Association; Company’s Tax Clearance for the last three years (originals to be sighted); Leasehold Certificate or Tenancy Agreement in respect of the company’s registered office and Evidence or information to show capacity to operate courier service including but not limited to indemnity insurance policy of Five Hundred Thousand Naira, capital base of Two Million Naira or a bond of that value, among others.

General Secretary, Association of Nigeria Courier Operators, ANCO, Mr. Okey Uba  revealed that courier business requires expertise to succeed but that government left the huge industry in the hands of NIPOST, which later considered it as an income generating business that resulted to the introduction of new fees.

The NIPOST regulation brought into the courier business a lot of businessmen who lack the expertise to manage a courier firm but had the money to pay for the fees.

Unfortunately, investigations revealed that the regulation from ANCO has not been able to flush-out the quacks because it lacks statutory responsibility to do so.

 Uba further revealed that regulation from NIPOST has also not been able to prevent local government officials and inter-state revenue collectors that harass courier trucks on delivery trips across the country.

Very often he said that the trucks were detained by the revenue collectors who are unaware of the importance of the content of the truck to the courier clients saying that the industry needs a separate commission for proper regulation.

Such commission, he should be able relate with the several government agencies that harass courier trucks on transit across the country.

He said that if there is a proper regulation from NIPOST, the revenue collectors across the country that harass courier trucks would be able to appreciate the difference between courier truck and other commercial trucks that ply the nations highway.

Presently, there are those who engage in courier business in the country without operational license from NIPOST, and the regulator has not been able to effectively address the situation, even ANCO has not been able to address.

It was discovered that there are corporate bodies across the country that operate dispatch services offering courier services. Such organisations include banks, eateries, transport companies, legal and telecoms firms as well as government agencies.

It was also discovered that the regulator is aware that almost every companies in the country have courier services department that ply the road engaging in courier services on motorbike.

According to Uba the pricing structure of these other bodies as well as that of the transport companies that engage in courier services is major a drain on their profit from the business.

According him, these companies can collect any amount from their clients noting that the business of the private courier services lacks professionalism.

Investigations revealed that NIPOST has been doing everything to ensure that the private courier companies are driven out of business by the kind of policies that is churned out by NIPOST.

Unfortunately, it was also discovered that the planned convergence championed by the Minister of Communications Technology, Dr Omobola Johnson in the draft national draft policy on ICT in 2012 did not favour the courier operators.

While the other sectors in the industry have an unbiased regulator, only the courier operators do not have such.

General Manager, Courier Services, Cross Country, Toyin Adeojo, who works for Courier Master, one of the indigenous courier companies said that the cry of the private operator is a Commission that will effectively regulate the industry.

He said that a level playing field must be created in the  sector so that there will be a restructuring avoid of overlapping interests saying that the present state where NIPOST is both a regulator and operator is contentious.

Adeojo who is also the Publicity Secretary for ANCO revealed that there are certain things that the Courier Regulatory Department, CRD of NIPOST should have been doing to protect their interest but the officials of the department cannot do such because of what may be the reaction of the top management of NIPOST.

Although Adeojo will not mention the things, he however said that the annual renewal fee has since its introduction affected the business of the operators.

He said that removing the sum of N500, 000 from their annual income at time when the fortune of the industry was dwindling was a hard knock on the operators saying that in Ghana annual renewal fee is in five years whereas for Nigeria it is once a year.

He disclosed that money bags make their way into NIPOST and get the courier license without the required expertise saying that their activities which are not checked by NIPOST is affecting the survival of the private courier operator.

According to him, the present unfavourable condition and the lack of proper regulation is responsible for the non-payment of salaries of private courier staff.

He said that if the industry has a regulator, individuals will not ply the road on motorbike as courier operators noting that a situation where medical diagnostic centres do dispatch services amounts to doing their job.

He explained that it is not the work of medical diagnostic centres to use motorbike to carry blood sample from one part of the city to another adding, “That is the work of courier operators. They are not trained to do that. It is because no one is regulating them that is why it is like that.”

He continued: “You can imagine Konga that came into the country not too long ago, got registered as courier operator because they can afford the N2 million”, saying that sometimes  Cross Country losses almost about N200.000 each week to the revenue collectors on the highway due to improper regulation.

Investigation also revealed that the failed privatisation plan of NIPOST is creating a major setback for the industry as it is not allowing NIPOST to develop as an operator.

Some ANCO members believed that if NIPPOST is privatised and a commission is established to regulate the industry, NIPOST will not be able to churn out policies that will affect the private operators.

For instance, in the regulation guidelines of ANCO, anyone that wants to join must have studied a courier related discipline in the university or worked in a courier firm for five years in a senior management position.

Unfortunately, most those being registered by NIPOST do not have such qualifications

He revealed that there is a Postal Service Commission bill that was brought to the National Assemble during the tenure of the later Minister of Information, Prof. Dora Akunyili noting that efforts by ANCO to get the lawmaker to look at the bill have proved abortive.

While the crisis in the sector continues and more private courier firms continue to close, ANCO said it has result to counseling of its members on how to survival.

One of such measures, the ANCO scribe said is the advice to its surviving members not to invest in opening of branches across the country but instead they should form synergy with other members that have business in other states of the Federation.

He said that the absence of an independent regulator is preventing its members from considering merger options adding that ANCO is working to protect its members from fraudulent clients.

He added that the complain that telecoms revolution is affecting courier services was not true because in the UK and America courier services is doing well despite the fact that the telecoms revolution took place years ago in those countries stressing that “ours is not doing well because courier services here is not organised.”

He said that while the foreign courier companies get a single digit loan from the banks in Nigeria, the local private operators get theirs at 30 per cent saying that that’s why we need a well funded courier industry.

A business development manager in one of the courier service company who do not want to be named revealed that sometimes to survive they had to use NIPOST facility to do their job, saying that that was why the industry needs the right kind of regulation.

When contact for comment on some of the investigation discovered by our correspondent, Senior Assistant Postmaster General and Head of the Courier Regulatory Department, CRD, Dr. Simeon Emeje declined to give audience. Also questions send by text message to his mobile phone were not responded to as at the time of filing this report.

However, Head of Enforcement, NIPOST, Andrew Ibiloma disclosed that as a regulator, NIPOST is up to the task of making sure that the environment is conducive for all operators to do business.

According to him, the enforcement team was in Ilorin, capital of Kwara State last December for its oversight function of the industry where six unregistered courier operators were clamped down on adding that same month two others had their business shut  down in Lagos.

Ibiloma revealed that very soon the regulator will begin to address the issue of dispatch riders that do not display stickers of the courier companies that they represent saying that NIPOST is aware that there are some organisation that have logistic department that engage in courier services and that it needs the support of the media to tackle the menace.

He explained that if they are not register with NIPOST to do courier service every courier job in that department must be given to courier service companies warning that it is against the law to engage in courier service without proper registration.

He said that there are banks like Union Bank, Union Express, and Access Bank with registered courier company engage in courier services adding that the Enforcement Team rely on the public for information for us raid.