The National Treasury has approved a grant of Ksh65 million to modernize the Postal Corporation of Kenya (Posta) logistics fleet.
The funds will be used for the acquisition of a new fleet of trucks to enable the corporation to meet its mandate and obligation of serving its customers effectively and efficiently in the lucrative logistics sector. The corporation has in the last five years embarked on fleet acquisition and modernization to enhance its capacity in the last-mile delivery service, whilst enhancing the current e-commerce platform.
With the additional new fleet, the corporation plans to grow its market share significantly in the mail and Courier service by enhancing door-to-door delivery while augmenting its e-commerce capacity in the increasingly competitive sector.
“I am happy to report that The National Treasury has granted approval and authority to modernise and upgrade our fleet for logistics and ICT at a cost of Ksh65 million. The funds, which are internally generated, will be used for the acquisition of a new fleet of eight Trucks during the 2021/2022 financial year,” said Mr Dan Kagwe, the Postmaster General.
Mr Kagwe said the Corporation had identified the logistics sector, which has witnessed immense growth since the onset of the Covid-19 pandemic, as a key focus area for revenue growth as the change in consumer behaviour and new shopping trends becomes the new normal.
He said the corporation plans to leverage on its vast network of over 600 post offices countrywide to roll out the last-mile delivery service to all corners of the country by offering real-time, reliable track-and-trace facility.
Speaking in Nairobi when he flagged off 40 new motorcycles to augment the corporation’s current fleet of courier motorcycles, Kagwe said the corporation was responding to the needs of customers who want goods and services delivered in the shortest time possible and at their own convenience.
Kagwe noted that Kenya’s e-commerce potential has not been fully realized owing to logistical challenges such as high last mile-delivery costs adding that the launch of the service will support and strengthen the already existing e-commerce platform in the corporation.
He said the corporation was well-positioned to roll out the last-mile delivery services to all parts of Kenya, starting with Nairobi. To achieve this, the corporation has partnered with Kibo Africa Limited, a manufacturer of quality motorcycles designed in the Netherlands and assembled in Kenya.
The last mile is the last leg of the delivery process before the product reaches the customers’ hands. It entails giving the customers a superior delivery experience, usually to their home or workplace, at their own convenience and on time.
Research in Kenya has shown that last-mile delivery costs account for between 35–55 percent of the total transportation costs. This cost is made even higher by issues such as weak infrastructure and limited delivery options.
According to the Communication Authority of Kenya, in 2019, the number of private courier firms in Kenya grew to 1,027 from 997 in the past year with sector deliveries up 22.2 percent in the same period.