A regulatory step to enhance the efficiency of logistics services
In a move aimed at transforming the postal and logistics sector in Saudi Arabia, the Public Transport Authority has released a draft of significant amendments to the executive regulations of the Postal System. These amendments, presented via the “Istilaa” platform, aim to enhance the sector's efficiency, improve customer experience, and fully protect their rights, in line with the objectives of the Kingdom's Vision 2030.
General context: The growth of e-commerce and Vision 2030
This move comes at a time when the e-commerce sector in Saudi Arabia is experiencing rapid growth, particularly after the COVID-19 pandemic, which altered consumer patterns and increased reliance on online shopping. This massive growth has placed significant pressure on shipping and delivery companies, highlighting the urgent need to develop the regulatory and operational infrastructure. The National Transport and Logistics Strategy, a key component of Vision 2030, aims to solidify the Kingdom's position as a global logistics hub, which necessitates a highly efficient and reliable postal sector. Therefore, these amendments are not merely procedural improvements but rather an integral part of a broader national strategy.
Key proposed amendments for consumer protection
The new draft included a set of strict controls that put the consumer first, most notably:
- Determining the delivery period: The amendments obliged shipping companies to specify a precise time frame for delivering shipments that does not exceed three hours, while giving the customer the freedom to choose the period that suits him, whether it is morning or evening, to end the suffering of the long and indefinite waiting.
- Mandatory electronic verification: To ensure that shipments reach their rightful owners and to prevent any tampering, the new regulation requires the adoption of reliable electronic verification methods upon delivery, such as a visual verification code (OTP) sent to the recipient's phone, or an electronic signature.
- Accuracy of the national address: The amendments stressed the need to deliver postal items to the registered national address or the agreed-upon address with utmost accuracy, which enhances the efficiency of “last mile” operations and reduces the percentage of returned or lost shipments.
Strengthening the regulatory framework and the powers of the authority
The amendments not only improved the customer experience but also granted the Public Transport Authority broader powers to ensure market discipline. The Authority can now suspend or revoke licenses in specific cases, including the bankruptcy of a service provider, their cessation of operations for six consecutive months, or if they are found to be harming national and security interests. The regulations also governed subcontracting mechanisms, stipulating that licensed services cannot be fully delegated to a third party, while holding the primary operator fully legally responsible to the Authority and beneficiaries for any arising obligations. This ensures the quality of service provided at all stages.
Expected impact on the local and regional market
These new regulations are expected to have a significant positive impact locally, encouraging companies to invest in technology and improve their operational processes to meet new requirements, thus creating a fair and competitive environment focused on service quality. Regionally and internationally, a well-regulated and reliable logistics sector will enhance the attractiveness of the Saudi market to foreign investment and global e-commerce companies, supporting the Kingdom's ambition to become a major logistics hub connecting three continents.
