The company said the terms of its severance deal are being kept under wraps, but the deal follows a period of special leave for Lefoka since October, following a review of the SAPO governance process related to corruption allegations.

SAPO said Nick Buick will remain as acting Group chief executive, and in the mean time the company is launching a recruitment process immediately to find a permanent CEO to succeed the woman appointed to “steady the ship” at SAPO back in 2007.

Investigations into some of SAPO’s top executives looked into breaches of governance protocol by Lefoka and Group chief operating officer John Wentzel, but a disciplinary enquiry ultimately cleared Group executive strategy officer Marietjie Lancaster.

Initial investigations into a building project at Eco Point in Centurion began in May 2010 after the SAPO board received unsolicited complaints from trade unions about procurement activity related to the new building.

The board suggested last August that there had been irregular expenditure by SAPO executives related to a R425m amount spent on a new 10-year lease for the building, and that it was seeking to recover around R19m in funds spent after SAPO had decided to move its head office from Pretoria Central to the new building at the Eco Point business park.

Police action

Last week, SAPO spokesperson Lungile Lose said in a statement to the press that the company has referred allegations of “criminality” against two of its executives to the South African Police Service (SAPS).

“The SAPS investigation is progressing and the Company reserves the right to institute action against employees to recover any losses it may have suffered as a result of any action by the employees during employment,” the company’s statement said.

SAPO said disciplinary action was only one of the remedies being undertaken, with corrective measures being implemented to eradicate “all forms of irregular, fruitless and wasteful expenditure”.

This included adoption of a new policy framework, approved by the board, as well as the establishment of a new board subcommittee to monitor “irregular, fruitless and wasteful” spending.

Lefoka, who had spent five years as chief operating officer at SAPO before being appointed CEO in November 2007, is the third chief executive to resign or have employment terminated by SAPO in relation to claims of irregular expenditure in the last seven years.

The move came today as the 21st Century Postal Service Act was marked up by the Senate’s Homeland Security and Government Affairs Committee ready for heading by the full Senate.

The Act proposes to provide a $6.9bn rebate to the struggling USPS to help it cut its work force by 100,000, restructure its multi-billion dollar healthcare prefunding obligations and allow sale of additional non-postal products.

Today saw the Senate committee rejecting proposals to immediately allow a move to five-day-a-week delivery, leaving in place the proposal for a two-year ban on eliminating Saturday deliveries.

But, the Senate did add a measure that would require a set of criteria to be used by USPS and the Postal Regulatory Commission when determining possible post office closures.

Making $10bn in annual losses at the moment, USPS is in the process of reviewing around 3,700 post offices for possible closure, in a move it believes would save $200m a year in operating costs, about 1% of the annual budget cut it needs to make in order to remain sustainable in the long term.

Retail standards

Senator Jerry Moran’s amendment adopted today would set a criteria for the basic postal services USPS must provide rural communities, which would have to be met when looking to close post offices.

National retail standards under the Moran amendment would take into account proximity of customers to postal retail outlets, alternative services available in an area, but also the unique characteristics of rural areas like Alaska and Hawaii.

Moran said he accepted that some post offices in the US had “outlived their viability”, but claimed the Postal Service was merely “going through the motions” when holding meetings with local communities while reviewing their post offices for possible closure.

“I’ve yet to see the criteria by which the USPS decides which ones remain viable and which ones do not,” he said.

“This sets a criteria for which we have some level of ability to determine why us and not somebody else. But more importantly, it creates the opportunity for the community to appeal that decision based on the criteria, to the Postal Regulatory Commission.”

The standards, which would apply to post offices already under review, would also require USPS to look at alternatives to closing post offices, such as shortening working hours at a local post office, having a postmaster there for fewer hours, and the co-locating of post offices with local grocery stores.

Joe Lieberman, the chairman of the Senate committee, said USPS has more retail outlets than Starbucks, Walmart and McDonalds combined, “so we’ve got to close some post offices”.

Lieberman, who supported the amendment, said: “It doesn’t stop the Postmaster General from doing what he thinks is necessary to keep the Postal Service going, but it creates some reasonable due process before post offices are closed.”

Among other amendments adopted today were measures requiring Postal Service to provide a full explanation whenever it decided not to adhere to a non-binding Postal Regulatory Commission, and a measure requiring more Congressional access to details within USPS contracts with partners like UPS and FedEx.

Delivery frequency

While the Oversight Committee in the House of Representatives has marked up a bill including provisions to take control of USPS to force cutbacks, and also eliminate Saturday delivery from day one, the Senate Committee rejected such approaches.

Senator John McCain’s amendments to bring the House proposals into the Senate bill were left by the committee, which preferred giving the USPS two years to get its house in order before any move to five-day-a-week delivery would be allowed.

Commenting on the House Republicans’ proposals, Senator Tom Carper said like the auto industry, the Postal Service needed to right-size its network, but that he did not believe a new authority needed to be set up to force closure of post offices.

“We need to come up with savings roughly $20bn a year for the Postal Service. Under our legislation, it says if you haven’t figured out how to do this in two years, you can go from six to five days,” he explained.

“I think that’s a pretty smart approach, it gives labour and management the opportunity to do what they did in the auto industry and that’s negotiate a different wage benefit structure.”

Lieberman said: “The way I read the provision of the bill is, we’re going to five-day delivery after two years. Unless the Postal Service can reach the level of savings without it, that’s the goal. I’m personally doubtful they can (achieve the required savings) without moving to five-day. So to me this is easing into something we’re going to have to do anyway.”

While the world’s postal industry may be losing a whole raft of its customers to the Internet at the moment, potential does exist for many more new users to join the physical delivery network.

A fascinating symposium held by the Global Envelope Alliance last month in Washington DC heard that as many as four billion people in the world cannot use the mail, because they simply do not have an address.

People in certain developing world countries may theoretically have access to PO boxes, or be able to collect mail from a post office counter, but are often dissuaded from even merely receiving mail by the associated fees from such services.

Charles Prescott, executive director at the Global Address Data Association and one of those speaking at last month’s symposium, says the proportion of the world’s population that is “unconnected” could be as low as 17% or as high as 80%. Nobody quite knows the exact number, because not having an address makes it difficult to officially record a person’s existence.

“It is terrible to contemplate that perhaps two thirds of the world’s population is without a postal address,” he says. “We have a lot of work to do to give an address to everyone, universal or not, but much work is being done.”

Around 60 countries who are members of the Universal Postal Union (UPU) do not have a post code system, one of the pillars of efficient mail processing and delivery.

Many of these countries do not have the up-front investment needed for implementing proper address and post code systems, yet problems in their address systems can be very costly.

Costly address problems

In countries where there are no address systems, letters and parcels can only be delivered by couriers following an often complex set of instructions. The economic upshot of this is that major global businesses are dissuaded from operating in such countries because of the administrative difficulties involved. Away from business, socially there is enormous value for proper address systems too, such as in co-ordinating disaster relief or the control of infectious diseases, where efficient logistics is paramount.

Yet, among the powers that be within governments, officials and politicians do not recognise the true value of a proper address system, according to Prescott.

Even in one of the best address systems in the world, in the UK, research has suggested that a 1% improvement in the government’s own address data would bring a EUR 25bn reduction in costs. In the United States, undelivered mail costs USPS $1.6bn a year.

The problems are compounded when mail has to move from one national postal system to another, through the international mail system. Although the large integrators are guarded about data on losses, a surprising amount of international mail does not reach its intended destination.

Prescott says one of the world’s largest integrators told him a third of its international parcels have an “address issue” that require human intervention to solve. [Editorial note: A spokesperson for the integrator in question told Post&Parcel she could not verify this statistic].

“The situation is becoming more serious with the increase in cross-border e-commerce parcel traffic,” says Prescott, who is critical of postal operators for making it impossible for commercial shippers to verify international addresses. “As more and more consumers worldwide go shopping on the Internet, more and more parcels – expensive mail indeed – will go through this system. But a lot of those expensive boxes are going missing, or going back to the sender.”

The significant economic advantages that come for a country’s economy in having a proper address system has only just started to be fully appreciated, according to Prescott, who says recognition at the Universal Postal Union translated into last year’s launch of the “Addressing the World, An Address For Everyone” initiative.

Backed personally by UPU director general Edouard Dayan, though run largely by volunteers, the initiative brings together academics and officials, seeking to raise awareness of the address issue within the UN and among influential non-profit intergovernmental organisations, and provide invaluable best practice information to help countries looking to adopt a formal address or post code system.

There are plenty of challenges associated with extending the world’s address system to the entire planet, not least the slow, costly process of setting up street names and house numbers then linking it together in a post code system.

World Bank studies suggest a cost of 60c per capita and $5.70 per addressed doorway to set up an address system. In Costa Rica, which is currently setting up a formal address system, estimates are for $150-$200 per street intersection just for signage, although Costa Rica is tackling that problem with local sponsorship.

Prescott says the UPU initiative is now making “steady progress”, and gaining some much needed attention. Proposals are being discussed prior to next year’s UPU Congress in Doha that could prove vital for moving this issue along.

Geocodes

One idea that could lower the costs of implementing an address system within a country – and establishing a truly universal post code standard for the world – could be to use geocodes.

A geocode is any number or code that relates to a physical location – existing post codes and zip codes are a form of geocode, although most existing kinds would not have enough delivery points because they are designed for only single country mail systems.

The concept of geocoding has exploded in recent years as products like Google Maps and satellite navigation tools have taken root in modern society.

Richard Abbas, chief executive of Malaysian company Theta Edge Berhand, believes that an international system of addresses based on a standard geocode would be the most effective way to bring about an expansion of the global address system.

Abbas believes that a standard international geocode would allow easier communication between different countries, even if they already have post code and address systems. And, it would be the easiest way then to bring online countries without a post code or address system.

He believes there is considerable potential for the mail industry in doing so.

“There’s a lot of people out there not using the mail, there’s a lot of opportunity for market growth,” he says. “But 4bn people on earth don’t have an address. Part of the reason they don’t have an address is that they don’t send any mail – but they don’t send any mail because they don’t have addresses to send it to. It’s a chicken-and-egg situation.”

As with the formation of the internet, in which every computer and server was given an IP number, Abbas believes every location on Earth should have its own geocode, based on a code derived from a longitude and latitude.

Open source

Theta Edge has developed an open source system called the “Posttude”, which is currently undergoing a proof-of-concept testing in Malaysia. The Posttude system comprises a three-level number in which a five-digit code would apply to a large area, a nine-digit code would apply to a smaller area and a 13-digit code would provide the most detailed description of a location within a 10-by-10 metre grid.

Having a Posttude system could mean individuals entering a new geocode into a postal service database in order to have items sent to the correct location – even temporarily.

Abbas insists a geocode must be open source and free to use for it to become an accepted global standard, but he believes the concept could allow countries a fast track to economic development without needing to go through the kind of expense that the likes of Costa Rica have been through, in naming and signing streets to set up a formal address system.

“They can leapfrog into the geocode technology just like they have leapfrogged over having fixed telephone lines, into having mobile phones,” he suggests.

Abbas tells Post&Parcel that more needs to be done by the UPU in this area, but that despite the apparent economic advantages, it is not a priority. “The agenda for the UPU for a universal post code system does not exist – because each member has their own kind of post code,” he says, adding: “They have other problems among their members at the UPU, so post codes are not a priority.”

Acceptance

Xinhang Shen, founder and president of Canada-based company NAC Geographic Products says geocoding as a technology is now well developed – his company first devised its system back in 1995 – and that acceptance for the idea in society is its “really, really big challenge”.

The NAC code system uses letters as well as numbers in order to keep codes shorter than the Theta Edge system, which Shen believes is important in reaching for social acceptance. The NAC system does dispense with some of its memorability because of its desire for equality in avoiding “good” and “bad” codes by avoiding vowels in its coding, however.

Nearly 17 years in the pipeline, the NAC system has so far been adopted by Somalia back in 2003, and more recently by Mongolia, although talk of actual implementation as a post code system has gone rather quiet recently, Shen admits.

Shen explains that one of the benefits of a standard international geocode system would help in delivering goods to countries that don’t use Western alphabets, and to people who are mobile.

“In Mongolia, a lot of people live in yurts that move around,” Shen explains. “You can’t have an address, but if you can tell the postal service the geocode where you are located, they can deliver.”

Shen says his company is now working with mail services giant Pitney Bowes on how its mailing software might make use of a geocoding system to improve international sorting systems.

Berkeley Charlton, the Pitney Bowes global portfolio director for geocoding and data, says his company has had internal discussions about setting up a universal geocode system to improve mail sorting.

“When grid-based geocoding standards become available, we will use them. There are many advantages to using geocodes,” he says.

Shen is cited as something of an inspiration behind one of the leading contenders for providing a post code system for the Republic of Ireland, Dublin-based Go Code. Alex Pigot, the company’s founder and chairman, says his company is in talks with the Irish government to adopt its code system, which is also based on longitude and latitude, using seven-digit combinations of letters and numbers that resembles British or Canadian post codes but provides accuracy up to five square metres.

The Go Code system can already be used by satellite navigation units, mobile apps and map searches on the web, and has strong credentials to be taken up by Ireland, though other rival codes are bidding to provide the country’s post code system, including An Post unit GeoDirectory.

“We developed a code for Ireland that can be adopted anywhere else in the world,” says Pigot. “But this requires major effort to counter cultural resistance, it needs strong political will and a huge amount of good luck.”

Political will and good fortune is undoubtedly needed if the full benefits of a concept like geocoding and a truly universal address system is to be realised.

First must come awareness of the problem and the major benefits that would come with resolution.

The Global Envelope Alliance, an industry forum set up by by the Envelope Manufacturers Association, has decided to take a lead in pushing internationally for the world’s postal systems to come together to develop the geocode concept into a worldwide post code system.

Bert Berkley, the outgoing GEA president who chaired last month’s symposium, told Post&Parcel his group was going to push “very hard” to see that posts and the world itself understands the advantages of using geocoding.

“There has to be some organisation that is pushing on a daily basis, so we will be doing that,” says Berkley, who is also chairman at Kansas City-based envelope manufacturer Tension Envelope.

“We think it is necessary for posts to adopt geocoding based on latitude and longitude, because of the cost savings which are involved. It should be a standardised model in the western world as well as the rest of the world, because posts need to do this better if they are to compete in the digital world.”