Wednesday, May 31, 2023 | 04:08 pm

Despite an Increase in E-Commerce, Australia Post Is Struggling

Despite an Increase in E-Commerce, Australia Post Is Struggling

Australia Post is warning that Australians’ penchant for digital commerce won’t be enough to save its collapsing letter delivery business.

Speaking to the American Chamber of Commerce in Melbourne on late last week, CEO Paul Graham said the 500 million parcels it delivered in 2022 (with an economic value of $500 million) still leave its traditional role at risk.

The collapsing letter volumes will mean that business will deliver a loss in the current financial year, on the back of a half-year loss of $189 million, and this is also having a catastrophic impact on foot traffic in post offices.

Graham warns to remain both viable and self-funded, Australia Post’s letter-carriage mandate will have to change.

“Performance standards issued under the [1989 Australian Postal Corporation Act] are no longer fit for purpose to Australia Post as an enterprise or to the customers and communities we serve every day,” he said.

“What we need is the commitment and goodwill from the parliament to make the changes necessary to deliver a sustainable future.

“There may be a time later this year when parliamentarians are asked to consider changes to Australia Post to support the viability of the business.

“My simple request is to put the national interest first.”

To try and recover foot traffic in regional post offices, the organisation is trialling a new model, he said.

“That’s why we’re piloting a community hub in Orange – a larger post office footprint and new format to better serve customers in regional Australia. We are investing in the regions when others are leaving.”

The community hub gives local businesses a retail space within the post office, along with features like parcel lockers.

Graham also pointed to the Post26 strategy announced last year, which includes continued high performance in its e-commerce business, and continuing creation of “market leading digital experiences”, along with product and service simplification, offering the chance to also simplify operations and systems.