As of late, there have been numerous conversations about Sri Lanka Post, particularly regarding the impact of GovPay on the institution. The United Postal Trade Unions Front (UPTUF) has criticized the recent move to facilitate fine payments for online traffic, alleging revenue losses to the postal department.
The UPTUF claims that GovPay facilitating online traffic fine payments will cause SL Post to lose LKR 600 million to 800 million in annual revenue. It also stated that SL Post previously worked on an SMS notification system for traffic fine payments, but it was abandoned after the SL Police did not support it. The UPTUF further pointed out that SL Post should be involved in implementing digital payment systems.
Efforts around digitalization for government institutions have been a growing idea over the past few years. The current government is aiming for a USD 10 billion digital economy over the next five years, partly fueled by projects like Unique Digital Identity (UDI), National (Federated) Data Exchange (NDE), GovPay, and others.
So, where does this leave the Postal Department, particularly when looking at its current situation and what the future may hold?
Sri Lanka Post: The numbers
It’s worth noting that LKR 800 million accounts for less than 7% of the Postal Department’s annual revenue of LKR 13.6 bn in 2023. In fact, about 12.5% of the department’s revenue comes from local and international courier services, with SL Post Courier, EMS, and Cash on Delivery amounting to LKR 1.7 billion in earnings during the same year. Offerings like Business Mail Service and Bulk Mail Service account for about 21% of SL Post’s revenue at LKR, which is 2.8 billion.
While the department has minimized losses by reducing overall expenditure and improving certain revenue points, SL Post continues to run at a negative balance. It edged up 41.5% in revenue to LKR 13.6 billion in 2023 but still ended up at an LKR 2.3 billion loss.
According to Deputy Postmaster General Thusitha Hulangamuwa, part of the issue comes down to budgetary constraints. He points out that these restrictions prevent SL Post from promoting its services effectively. Of course, the larger problem is the years of declining demand for traditional postal services.
Bridging the gap
Interestingly, the Postal Department has been making efforts to bridge this gap. In its 2023 performance report, it called for investment to help the institution transition from mail-to-mail to a goods exchange facilitator. To this end, the Cabinet of Ministers in 2024 approved an LKR 10 billion project to set up a Public-Private Partnership (PPP). This venture would expedite international goods exchange services.
The same year, the Postal Department announced plans for a goods exchange courier service in the Western Province, via its fleet of 200 three-wheelers and 50 motorcycles. Last month, SL Post expanded its international courier services (EMS) from 46 to 59 countries. Hulangamuwa claims items sent through this service could be delivered to the destination within seven days.
Back in December, Sri Lanka Post and Bank of Ceylon partnered to expand banking services across the country. The BOC Connect service initially kicked off with 100 post and sub-post offices to cover almost 4000 service points. Hulangamuwa states this initiative helped the department cut the operating deficit by nearly LKR 3 billion.
BOC is the second bank to offer its services through Sri Lanka Post. Previously, the National Savings Bank partnered up with the institution, allowing patrons to deposit, withdraw, and receive foreign money remittances via any postal outlet.
That being said, the department still falls well behind digitalization efforts. Back in 2020, the government proposed deploying e-bikes for mail delivery and an app for package deliveries. To date, neither of these propositions has come to fruition. The closest SL Post has come is a downloadable APK for a postage calculator app.
Sri Lanka Post’s e-commerce potential
But perhaps more consequential is the department’s lagging integration with the country’s e-commerce sector. According to Central Bank of Sri Lanka data, e-commerce transactions amounted to LKR 376.6 billion in 2024, with a 27.4% Year-on-Year jump. The data further shows a steady uptick in volume and value of transactions during the 2022-24 period.
But logistics and fulfilment have always been a challenge for Sri Lanka’s e-commerce players. Daraz alone handles over 5 million products in inventory, and it took the company years to reduce delivery timelines from over a week to three days islandwide. Even with e-commerce operators investing in their fleet and third-party couriers, fast and reliable delivery remains a challenge in Sri Lanka.
In contrast, SL Post’s network includes 653 main post offices and approximately 3,400 sub-post offices, amounting to over 4,000 service points. This means the department reaches most households in every part of the country, a level of accessibility no other entity in the island possesses. SL Post’s infrastructure is a prime contender for bridging the gap.
Modernized postal
Even in the United States, e-commerce giants like Amazon rely on the United States Postal Service for their deliveries throughout the country. The country’s postal service is a vital partner for last-mile packages delivered in rural areas. The USPS also handles deliveries when retailers seek to balance their network and capacity. Other postal services like Germany’s Deutsche Post DHL, France’s La Poste, and Australia’s
Other countries’ postal services have adapted similar strategies to integrate into e-commerce. Last year, Australia Post announced a three-year deal with IKEA to expand its delivery capacity in the country. Under the agreement, Australia Post becomes the primary e-commerce fulfilment partner for small and medium parcels.
France’s La Poste’s brands Colissimo and Chronopost play a critical role in logistics and fulfilment in the country’s e-commerce sector. The state-owned enterprise also offers its own e-commerce modules and solutions.
Incidentally, part of La Poste’s strategy to modernize was to build an API-first integration platform. It adopted WSO2’s API Manager to streamline shipping, build an integrated contact center, and push for faster service improvements, among others.
Internet of Postal Things (IoPT)
But consolidating on e-commerce potential isn’t the only opportunity on the table. Modernizing SL Post can take other forms. Take, for instance, how the Internet of Things can play a role in postal services.
Coined by the USPS Office of Inspector General, the Internet of Postal Things concept has been around for a decade. The goal is to use an embedded network of interconnected objects for collecting, transmitting, and acting on a wide variety of data, specifically for postal services.
One of the biggest benefits of adopting the Internet of Postal Things is how sensors on postal vehicles could enable better predictive maintenance, fuel management, and real-time dynamic routing for operations. This could also translate to enhanced mail and parcel services via a sensor-enabled smart mailbox. These mailboxes transmit postal data in real-time, like mail delivery, pickup time, and notifying recipients.
Neighborhood services
At present, Sri Lanka Post offers a few government services, such as payments for electricity bills, SLT/Mobitel bills, and the Department of Examinations. The department also facilitates services related to channeling doctors (e-channelling), insurance, and banking, to name a few.
However, it falls short in certain areas, such as providing on-site services for passport photos, identity verification, and document notarization. These services could not only be offered on-site but could also be conducted remotely. Sri Lanka Post carriers could be equipped with mobile devices capable of performing some of these tasks in a remote setting.
Internet of Postal Things could also have implications for other government agencies and initiatives. For instance, equipping SL Post’s infrastructure with sensors could allow the department to conduct useful services such as monitoring air quality and detecting potholes. Concerns over air quality have become an important topic in recent years, given the red alarms on several occasions.
Falling short on the basics
Of course, digitalization can only go so far when even SL Post’s website doesn’t seem to be on par with the times. All of SL Post’s content is housed in a theme that appears to be at least a decade old. Apart from the hundred varying fonts and buttons, the homepage has a noticeable “Download PostMate App” link. This redirects users to an APK download for a postage calculator app as opposed to an official link to the Apple App Store or Google Play Store.
This not only discourages prospective users but also adds security risks to website visitors. Should Sri Lanka Post opt to modernize issues around data privacy, security, technical expertise, and the like becomes pivotal. The website’s current status is a reflection of the contrary.
But the department’s shortcomings go much further. Whether it’s the fleet of vehicles, equipment, or the actual postal offices, Sri Lanka Post has numerous core infrastructural issues that also need an overhaul.
The road ahead for Sri Lanka Post
However, it should be noted that SL Post has made efforts to turn itself into a profit center. Over the past couple of years, the Postal Department has managed to reduce costs and ramp up revenue centers. But it can go a longer way as a State-Operated Enterprise.
There’s already evidence of SL Post’s utility as a potential delivery partner. Bear Appeal has used the department for a chunk of its deliveries for years. The company praises SL Post, calling it low-cost and how it works “well enough that it allows us to ship to anywhere in the island within five days.”
As such, it should come as little surprise that the Postal Department wants to expand its capabilities. Apart from expanding EMS to 59 countries and a goods exchange service plan in the Western Province, other initiatives like its partnership with BOC aim to extend financial accessibility across the country.
All in all, the citizenry stands to gain quite a lot with a modernized SL Post. This is particularly crucial in a landscape where the government talks about “USD 10 billion digital economy in 2030” ambitions for Sri Lanka. As to whether anything meaningful will materialize for Sri Lanka Post’s digital future, only time will tell.
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