The Federal Government has suggested a major overhaul to Australia Post’s operations, which could include fewer letter delivery services and a stronger focus on parcel deliveries. The proposed new strategies are designed to keep up with modern consumer demand. Here’s what you need to know.
First, the context
Australia Post has experienced a difficult period over the last few years. This is largely due to the COVID-19 pandemic and the rise of digitisation. It posted a loss of nearly $190 million in the last six months of 2022 and will report a full loss in the 2022/23 financial year – its first annual loss since 2015. Australia Post’s community service obligations, including delivery frequency requirements, have now been described as “no longer financially sustainable”. The cost of delivering these services was estimated to have reached almost $350 million in the 2021/22 financial year.
Under current regulations, Australia Post must service 98% of all delivery points from Monday to Friday (except on a public holiday) and at least twice a week to 99.7% of all delivery points. Only the most remote mail addresses are exempt from this. Australia Post was estimated to be delivering 2.4 letters per week to the average Australian household in 2021/22, down from 8.5 in its 2007/08 peak. The Government has suggested lowering the frequency of its letter delivery, which it says has become “particularly cost burdensome” amid lowered consumer demand.
Australia Post is estimated to deliver over 70% of parcels in Australia, with this service a growing area of demand due to online shopping. The Government has suggested changes to further support parcel deliveries, including improved parcel tracking technology and providing more environmentally-friendly options. It also proposed introducing weekend and same-day parcel delivery for a broader set of customers.
None of the proposed changes in the discussion paper have been finalised. The Government’s proposals have now been issued for public feedback, which is expected to assist in refining or changing the proposals before anything is finalised. Public feedback is due by 27 April.