Revised Postal and Courier Market Structure to Catalyse Sector's Shift to E-Commerce, Says CA

The new postal and courier market structure by the Communications Authority of Kenya (CA) has aligned the regulatory framework with global best practice, changing consumer needs and the sector's rapid shift from traditional mail to e-commerce logistics, parcel delivery and digitally enabled fulfilment.

Speaking during the World Post Day celebrations, CA Director General David Mugonyi said the new structure gives operators a regulatory environment that reflects how the industry now works and called on regulators and operators alike to rethink traditional business models and seize the opportunities presented by digital transformation.

"The Post is not disappearing; it is evolving," said Mr. Mugonyi. He noted that the sector's future will increasingly depend on its capacity to deliver efficient logistics, parcel delivery, fulfilment, addressing, financial services and other technology-driven solutions.

Mr. Mugonyi observed that while digital communication has driven a sustained decline in traditional mail, the growth of online commerce continues to open new opportunities for courier operators and other players across the logistics value chain.

Kenya's reforms come as new global research highlights the urgency of modernising postal regulation. The Universal Postal Union's (UPU) State of the Postal Sector 2026 report, released on World Post Day, finds that inflation-adjusted postal revenues worldwide fell for a third consecutive year, from USD 606 billion in 2021 to USD 563.4 billion in 2024.

According to the report, designated postal operators still dominate the shrinking letters segment but are losing ground in growth markets such as parcels, while universal service obligations limit their room to cut costs.

The UPU estimates that delayed, uncoordinated decision-making across postal operators, regulators, and trade and economic ministries could cost the sector USD 411 billion cumulatively between 2026 and 2030, and has called on governments to respond with coordinated, agile policy.

Kenya's figures for the quarter ended June 2026 reflect the same shift identified by the UPU. Private courier operators handled 14.4 million domestic parcels, an increase of 9.3 per cent from the previous quarter, although their domestic letter volumes fell by 2.5 per cent to 3.2 million. In contrast, Posta Kenya, the designated postal operator, handled 993,099 domestic parcels, a decline of 33.2 per cent.

Domestic letter volumes rose by a modest 1.8 per cent quarter-on-quarter to 577,694 but remained 70.2 per cent below the level recorded in the same quarter last year. International mail also grew, with outgoing and incoming letters increasing by 6 per cent and 11.8 per cent respectively compared with the previous quarter.

The Authority is also implementing a Universal Service Fund (USF) pilot project to modernise 17 post offices in unserved and underserved counties. Site surveys have been completed, paving the way for the installation, refurbishment and commissioning of Local Area Network (LAN) infrastructure at the selected offices. The initiative will strengthen their ICT capacity and improve access to postal and related services.

Principal Secretary for the State Department for Public Investments and Assets Management, Mr. Cyrell Odede, said Posta Kenya's transition to a Government-Owned Enterprise under the Government-Owned Enterprises Act, 2025, marks a significant shift in how State enterprises are managed and held accountable.

He noted that the framework requires government-owned enterprises to operate on commercial principles, pursue financial sustainability, and implement Board-approved business plans and performance contracts. For Posta Kenya, this means maximising the value of its nationwide network, properties, fleet, technology and people while continuing to meet its public service obligations.

Postmaster General John Tonui described Posta Kenya's network of more than 600 postal outlets as a strategic national asset, capable of supporting government service delivery, moving goods and connecting businesses and communities.

He identified e-commerce and cross-border trade as major growth opportunities, particularly for Micro, Small and Medium Enterprises (MSMEs) seeking access to regional and international markets. Reliable logistics, warehousing, fulfilment, customs facilitation, payment services and last-mile delivery, he said, are essential for businesses to compete effectively.

As part of its transformation strategy, Posta Kenya recently signed an agency agreement with Guangzhou Vnlin Logistics Information Technology, making the Corporation the official super-agent for Eastern and Central Africa. The partnership positions Posta Kenya to handle a greater share of cross-border e-commerce traffic and to extend its logistics services to businesses across the region.