To meet demand, SAPO plans R100m capex spend and becomes an early adopter of new global addressing standard

THE SA POST OFFICE (O) is one of the few postal services in the world that is growing profit and the volume of mail handled. Aside from last year, when the rate dipped to 3%, it has reported a 4% to 5% increase in mail volume every year for the past six years. It currently handles five million items of post daily, 80% of it commercial mail.

Managing these growing mail volumes is a job handled in part by Pierre Rossouw, SAPO`s national automation engineer.

Rossouw, who joined SAPO in 2000, is tasked with developing and implementing a 10-year national automation strategy, acquiring processing equipment and systems as capital assets for the company, asset utilisation performance measurement, maintenance and outsourcing contracts, and developing a new postcode and addressing system for SA.


Rossouw`s budget for mail automation is over R100 million for the current financial year - half of SAPO`s total capex budget of R200 million. But, he says, this will increase if the board approves his latest proposal. This budget covers SAPO`s mail sorting assets, which include the machines and systems, including software development. This is often outsourced, usually to overseas systems suppliers.

One project Rossouw is currently working on aims to improve efficiency in operations. "We could save about R43 million through more effective mail operations, achieved by improved quality and product rates, and the availability of our machines. This type of business is a mature business, being a cash cow, so the operations are not highly innovative, although we can improve efficiency and quality," he elaborates.

As for the mechanisation strategy, Rossouw says SAPO has 34 mail sorting machines in total - 13 of which are state-of-the-art, each capable of sorting over 40 000 items per hour. There are also seven culler-facer-canceller (CFC) machines and about 70 small cancelling machines. All the machines are imported from Europe and Japan, mainly from Siemens, Solistic, NEC and Toshiba.

The lifespan of a machine is about 10 years, although some have been in use for up to 26 years.

SAPO is currently replacing some of its larger CFC machines, which process mail in from street collections. These machines turn letters face up, sort the large (anything bigger than a standard envelope) from the small letters, cancel the stamp, and then feed them into a primary sorting machine.

Sorting machines, in turn, recognise an envelope window or label, automatically read an address, and then sort mail according to postal code and the next two address lines up, the PO Box number or street address, and then sort to destination stackers.


SAPO has been mulling the overhaul of this postcode and addressing system for SA since the late 1990s, due to increased demand and the requirement for finer automatic sorting. Rossouw says by 2004 he had produced a review of the system, and proposed one of three options: keep the current system, modify the current system, or develop an entirely new system. "Analysis showed that the option to develop an entirely new system proved the most cost-effective," he says.

The current postcode and addressing system was developed in 1973. "But for various political, social and technological reasons, it no longer satisfies customer needs."

Based on extensive research of similar systems the world over, Rossouw has developed an advanced data and bar code system, which will easily accommodate the 12 million addresses currently in use by SAPO. The system also facilitates its current postal routing hierarchy, made up of six major hubs, 20 sub-hubs, about 400 transport routes and several thousand offices; and will integrate four databases, which register mail`s origin, postal routing to delivery point, geographic location details, and tariffs. Together with automatically bar coded date and time, every item and end-to-end route is identifiable.

Rossouw`s system recently qualified and is certified as compliant with the international addressing standard UPU-S42, making it one of only 16 countries in the world to do so.

While the order for the software to generate master data codes is yet to be placed, Rossouw can reveal that the software will be developed by the suppliers of the sorting machines.

Tags: Government  Postal  Services