Postal Sector Public Policy in the kingdom of Saudi Arabia
Issued by HE Minister of Transport and Logistic Services
(1602) dated 16/12/1444H
Corresponding to 04/07/2023 G
As per Council of Ministers Resolution (705) dated 27/12/1443H; and Resolution (149) dated 06/03/1443H
Note: This is an English translation of the official Arabic text, and the Arabic version shall prevail in case of any discrepancies, as it is the official language of The Ministry of Transport and Logistics Services
Purpose of the Policy:
Based on the responsibilities assigned to the Ministry of Transport and Logistic Services towards the postal sector in the Kingdom of Saudi Arabia; pursuant to Article One of Council of Ministers Resolution (705) dated 27\12\1443 G, which provided that the Ministry of Transport and Logistic Services shall carry on the supervisory role of the postal sector and approving its public policies, developmental plans, programs and supervising its implantation. Therefore, this Public Postal Policy was issued. It shall be considered a passage map for the execution of strategies and a working plan to direct resolutions and achieve results; including directions and foundations for an impact maximization to reach to the desired goals of the postal sector.
The foundation of this Policy is to increase the level of growth in the postal services in the Kingdom, which facilitates and supports the realization Vision 2030 goals, through a clear vision for this lively sector; which would push for a national development and advancement of the sector and accomplishing the aimed growth for the next years, to guarantee a maximum contribution in the national GDP. Along with, reinforcing the services of the sector through building trust between the investor, beneficiary and the postal services. To accomplish the desired goals, the following must be relied on:
- Digital solutions and automated systems to drive and incentivize the digital economy; such as big data, statistics and e-commerce.
- Adopting flexible processes to respond to any accidents that may interrupt the postal services.
- Incentivizing the investment environment in the postal sector.
- Improving the regulatory environment, strategy execution, and incentives enablement.
- Develop the standards of providing current postal services, and offering new services in an innovative manner, that guarantees variety of services in competitive prices.
- Increase the competition between investors, entrepreneurs, local and foreign companies, support e-commerce and digital economy.
- Promoting principles of transparency, in accordance with innovative governance and regulations that leads to a creative environment, that provides necessary information for those wishing to enter or invest in the postal sector in the Kingdom, without prejudice to the privacy of the beneficiaries' data.
- Developing human resources and the optimal employment thereof.
- Improving the financial position of the sector and maximizing the return on its investments, in accordance with the Kingdom's vision 2030.
- Ensuring that the sector's plans and programs focuses on the beneficiaries of postal services, and achieves digital transformation plans, which contributes to economic development.
- Determine the roles and responsibilities of the relevant entities.
- Contributing to the improvement of the Kingdom's ranking in the sector's indicators, and fulfilling its obligation in international agreements.
- Encouraging innovation in providing more services the meets the needs of individuals, entrepreneurs, business sector and all relevant parties.
- Simplifying the compliance with laws, regulations and licensing requirements; to promote fair competition in the sector.
- Identifying the expected roles and responsibilities that shall be carried out by the Ministry of Transport and Logistic Services and the Transport General Authority and the National Operator and other relevant authorities in implementing this Policy and achieving its objectives.
Principles of the Policy:
First: Universal Service Obligation (USO):
The Universal Postal Service is the cornerstone of the social aspect and aims to provide acceptable limitation of postal services to all beneficiaries at appropriate rates. This policy therefore seeks to:
- Develop a universal service obligation policy in accordance with an appropriate service pricing methodology, aligned with the highest global quality standards in the delivery of postal services.
- Deploy postal services through appropriate infrastructure in all geographical areas and at all times without geographical discrimination.
- Access to postal services by all society groups that is affordable and appropriate regardless of the economic viability of the regions or population.
- Identify the national operator to provide comprehensive service.
Second: Infrastructure and National Address:
In order to achieve one of the objectives of the Saudi Vision 2030 by consolidating the Kingdom's position as a global logistics hub; Based on its strategic position and through advanced logistics infrastructure, in-line with the highest standards, it provides sustainable and integrated supply chain services and enables e-commerce. This Policy therefore seeks to:
- Developing, supporting and stimulating infrastructure for the sector's activities by building and developing geographic information systems.
- Promote the use of the national address, and ensure its integration with digital maps.
- Develop the national address as a regional model that supports the sector and improves the service provided through the development of the coding method and verification services of the national address, and be part of the identity of any person in the Kingdom.
- Protection of assets and critical to infrastructure properties and National Address data.
Third: Beneficiaries and Investors Interests and Increasing Demand:
Demand for postal services is positively or negatively affected by a range of economic and social factors and the availability of alternatives. The volume of demand for the sector's services is affected by changes in GDP, inflation, population growth and quality of service.
On the other hand, the underlying variables relating to the behavior of beneficiaries in this sector (senders, individual recipients and the business sector) with direct impact on investors and the volume of demand for the sector's services can be limited to four (4) main variables listed as follows:
- Decrease in the volume of traditional postal services, due to the multiplicity of communication between people, as well as digital transformation efforts (which is part of the Kingdom's Vision 2030).
- The increase in parcel transfer as a result of the accelerated growth in e-commerce in the Saudi market; which contributed to the transformation of the nature of the use of postal services and the need for them in the future, given the widespread use of the Internet and smart devices in the Kingdom.
- The nature of the market that has become less sender-oriented and more recipient-oriented; Recipients of postal materials are increasingly influencing the delivery process compared to traditional postal services, the terms of which are usually controlled by the sender.
- Growing desire for same or next day delivery orders, with the ability to choose the place and time of delivery, and make the tracking feature available for the delivery route. This calls for more optimal use of modern techniques and the streamlining of systemic procedures (for example -but not limited to- reducing customs clearance time).
This Policy therefore seeks to:
- Improving the quality of services in the sector, thereby contributing to the provision of the best standards and keeping pace with fast changes, Through the development of mail processing efficiency, improving mail delivery duration, the development of the mail tracking system, continuous monitoring of the service efficiency measures, improvement and upgrade of the direct marketing mail service, introduction of new services such as hybrid mail, integrated logistics, money transfer service – financial mail – and other services that encourage demand, thereby increasing the vastness of the mailing usage.
- Competition, protection of integrity and guaranteeing the interests of beneficiary's interests; Through the enactment and application of norms in support of rights, including but not limited to (access to postal services, non-discrimination, right to access invoice details, right to complain about quality, delay, quantity and tariff of service provided, protection of privacy of personal data, right to protection against misleading advertising and harmful content, right to know product features and quality of service standards).
- Improve the service standards (especially speed, reliability and quality).
- Develop requirements based on best practices and standards to ensure the application of necessary requirements to reduce risks and protect against internal and external threats and identify indicators to measure and monitor the sector's growth.
Fourth: Increase in Business and Creating a Competitive Market:
The most significant factors affecting the size of the sector can be limited to the two following factors:
- The development of new innovative business models and services based on modern technologies to keep pace with accelerated technical progress, the growth of the number of SMEs, demographic change, changing beneficiary behavior and growing demand for the sector's services; This requires the need to continuously redefine the dimensions of postal networks, in order to avoid a possible reduction in the quality-of-service delivery.
- The efficient management of resources and the desire to earn more financial returns, leading postal service operators to further diversify their activities through the introduction of e-commerce processes (due to their easy vertical integration) with a view to expanding their business models.
This Policy therefore seeks to:
- Establishing the right climate for fair and effective competition that ensures the competitiveness of the sector's service providers in meeting the needs and expectations of postal service users. In this context, it is important that developments in the competitive structure of the parcel delivery market be taken into account and that competitive regulatory and safeguards be put in place; to ensure a compatible field for competitors. Regulated competition in the sector ensures that operators compete with each other in the efficient delivery of services at acceptable levels of quality and price.
- Provide opportunities for SMEs and remove administrative, regulatory, technical, procedural, informational and marketing constraints facing enterprises, and propose laws and regulations to create a sustainable, integrated and growth-friendly competitive environment.
- Providing an attractive environment for investment in the sector, developing local content and attracting leading international companies related to the postal sector.
Fifth: Utilization of Technology and Innovation:
The rapid development of technologies does not impose a threat to the postal service industry; alternatively, it provides significant opportunities to significantly improve those services and to innovate new value-added services. Technical advances together with innovation in technical means (such as smartphones and tablets) and the variety of communication options affect the beneficiary's behavior and business practices; leading to the emergence of more platforms, electronic alternatives, promotion of e-commerce and innovation in delivery methods; It thus contributes to the Kingdom's global economic competitiveness.
This Policy therefore seeks to adopt more technology and innovation to increase the scale of development in the postal sector and facilitate e-commerce; by achieving the following:
- Supporting postal operators' efforts to take advantage of the latest technologies in developing new products and providing value-added services that keep pace with developments in the sector; Through optimal use of modern and innovative technologies (e.g.: big data, cloud computing technologies) to stimulate and enhance the sector and its growth, and encourage the adoption of modern technologies either directly or in partnership with other companies.
- Adopt the best innovative technologies in the services of the sector that are a pillar for economic growth; This is in keeping with the fourth industrial revolution (employing artificial intelligence, the Internet of Things, drones, etc.).
- Invest in initiatives aimed at enhancing broadband access and Internet connectivity through the use of electronic alternatives; As a means of disseminating government e-transactions, payment solutions, e-commerce and support services.
- Encouraging creativity, innovation, entrepreneurship, research and development of postal services, in order to create innovative new services of high quality at a price suitable for beneficiaries.
- Introduction of innovative solutions in the market (such as "parcel lockers" parcel stations, electric vehicles), and introduction of alternative delivery methods in response to the challenges posed to "last mile delivery".
- Providing a technical environment supportive of innovation, enhancing its effectiveness and efficiency.
Sixth: Human Capital:
- The sector's contribution to the creation of jobs of high value and productivity.
- Develop local skills and competencies in-line with the requirements of employment in the sector and increase their participation in the sector.
- Provide appropriate employment opportunities in the sector by enhancing the role of SMEs and their development.
- Recruit qualified national capabilities in all needed fields; postal, technicality, technical, financial and administrative.
- finding leadership capabilities that are able of managing all areas and activities in the sector.
Seventh: Business Continuity and Sustainability:
- Ensuring business continuity in the cases of disruptions (disasters, cyberattacks, etc...).
- Focus on the beneficiaries' experience and be keen to raise their satisfaction index and confidence and provide services at appropriate prices.
Eighth: Environmental Protection:
- Implement all responsibilities and duties within the sector with the least possible impact on the environment.
- Provide environmentally friendly products, use recycled materials, and participate in various environmental awareness programs.
Ninth: Relevant Entities (Stakeholders) and Expected Roles:
For the purpose of achieving the objectives of this Policy, without prejudice to the mandates of other government entities, the following are the expected roles and responsibilities of each entity to implementing this Policy:
Ministry of Transport and Logistic Services (The Supervisory Body):
- Comply with this Policy and supervise its execution and adherence to it, and develop the appropriate framework to evaluate its impacts and revising it annually.
- Supervise the postal sector.
- Developing and monitoring the performance of the sector in national and international indicators.
- Increase the postal services contribution in the national GDP.
- Incentivize the market and providing an attractive investment environment.
- Encouraging national capital to direct an investment share towards investing in postal services in cooperation with the Ministry of Investment.
- Attract leading international companies in the sector, in cooperation with the Ministry of Investment.
- Transfer and localize the sector's services, in cooperation with the Local Content and Government Procurement Authority and keeping up with its development.
- Increasing the spread of the sector services in government transactions, public services and relations with individuals and commercial activities.
- Developing and enhancing the local talents and skills, and increasing their participation in the sector, encourage creativity and innovation, entrepreneurship, research and development.
- Regional and International representation on behalf of the Kingdom in sector relevant organization, unions and authorities, and it may delegate this role to the Transport General Authority or any other entities that it may sees fit. And monitor the compliance of the Kingdom to its obligation thereof.
Transport General Authority (The Regulatory Body):
- Implement the principles of this Policy and comply with the relevant laws and regulations.
- Increase the clarity of regulatory procedures; to raise the level of monitoring the postal services.
- Ensuring the fair competition in the sector; including the revision of its regulations and procedures and issuing guides and publications to ease the compliance with relevant regulatory requirements.
- Regulate and monitor the postal sector including rules and procedures of providing postal services, and regulating fair compensation mechanism for harmed beneficiaries, and guaranteeing the rights of the beneficiaries of these services.
- Improving the beneficiaries' experience and the quality of the sector services.
- Prepare the Universal Service Obligation Policy and approving it from the Ministry of Transport and Logistic Services.
- Licensing the National Operator and determining the scope and conditions of providing these services, and Minister of Transport and Logistics Services shall approve this license unless a delegated to the Authority to approve such.
Saudi Post “SPL" (The National Operator):
- Implement the principles of this Policy and comply with the relevant laws and regulations.
- Operate the National Address operations and all related sub services.
- Comply with the Postal Universal Service Obligation.
- Fulfilling the obligations resulting from the Universal Postal Convention.
- Attend and contribute in regional and international organizations and unions in relation postal affairs after coordinating with the Ministry of Transport and Logistic Services.
The Ministry of Commerce:
Taking measures to enhance the regulatory and legal framework for businesses and e-commerce; in accordance with its mandate as per relevant laws and regulations.
The Ministry Investment:
Regulating and developing investment in the Kingdom and setting executive plans and rules to create an investment environment for the postal sector; in accordance with its mandate as per relevant laws and regulations.
The Ministry of Communications and Information Technology:
Developing digital solutions and automated systems to drive and incentivize the digital economy and adopting initiatives aimed to enhance broadband access and internet connectivity through the use of electronic alternatives, including supporting and enabling the necessary infrastructure and digital services for the postal sector within the digital economy, and supporting and enabling digital solution and technologies that facilitates in the transformation of the postal sector and its effective contribution in the digital economy ; in accordance with its mandate as per relevant laws and regulations.
Zakat, Tax and Customs Authority:
Developing the customs procedures in relation to the postal sector; in accordance with its mandate as per relevant laws and regulations.
General Authority for Survey and Geospatial Information:
Making geospatial data, information and services available to support the national address layer, as one of the infrastructure layers in the geospatial information layers; in accordance with its mandate as per relevant laws and regulations.
The Small and Medium Enterprises General Authority “MONSHA'AT":
Establishing programs and initiatives to provide opportunities to small and medium enterprises and eliminating administrative, regulatory, technical, procedural, informational and marketing obstacles that SME's encounter, and propose supporting laws and regulations, in order to create a sustainable, integrated and growth-able competitive environment; in accordance with its mandate as per relevant laws and regulations.
Licensing the postal financial services in accordance with its mandate as per relevant laws and regulations.
Research, Development and Innovation Authority:
Enabling the transfer of knowledge and innovations resulting from expertise and research in relation to the postal sector; in accordance with its mandate as per relevant laws and regulations.
Local Content and Government Procurement Authority:
Proposing policies, regulations, and incentives that supports the development of local content in the postal sector, and support in the execution of such plans.
Companies and Entities Working in the Sector:
- Adhere to the principles of this Policy and comply with the relevant laws and regulations.
- Comply with Kingdom's obligations in accordance with relevant postal sector international agreements
- Making detailed information in relation postal activities, its quality, approved tariffs (remuneration) publicly available and (updated or provided) by the Transport General Authority. This information must be updated on regular basis and published on all available means.
- Adhere to instructions provided by relevant supervisory, regulatory and monitory on specific activities.
- Protect personal data of beneficiaries.
- Comply with regulations, frameworks and guidelines in relation to cybersecurity on a national level.