PAST THE POST

By 2032, addressed letter volumes are expected to fall below 500 million annually. The average household, consequently, will receive less than one letter each week. A decline such as this is expected to see addressed letters per postal delivery officer round per day fall from 640 to around 150. It’s an ongoing problem for Australia Post and one that points to postal delivery officers in the future having to support other viable, revenue generating services to secure sustainable employment.

With 9.3 million Australian households having shopped online in the 202122 financial year, online purchases were 11.9 per cent higher than the previous year. The online shopping industry in Australia has grown on average 20 per cent each year between 2017 and 2022, as nearly one in five retail sales are now done online. While e-commerce penetration is projected to grow, Australia still lags behind many international territories for online shopping frequency. This points to seismic activity over the coming decades if trends in South Korea, China, the United States and United Kingdom are anything to go on. When it comes to consumer behaviour they usually are.

Australia Post provides the largest business to consumer parcel delivery service in Australia and underpins

Australia’s $67 billion online retail sector. Its infrastructure and service options are essential to this day in many parts of Australia.

Australia Post delivered more than half a billion domestic parcels in the 202122 financial year, with parcel volumes in 2022, 69 per cent higher than they were before the COVID-19 lockdowns. Under a proposal lodged to the Federal Government’s Postal Services Modernisation white paper, Australia Post would partner in a work-sharing model with other parcel carriers in exchange for access to its vast network of parcel lockers and post office boxes. The plan would include paid access to distribution centres, delivery vans and bikes, locally owned post offices and parcel lockers, as well as Australia Post’s digital infrastructure, including delivery tracking and notification tools.

Delivery company Sendle and Team Global Express were among the businesses making a case for the work-share model.

Sendle was started in Australia back in 2014. At the time it had an ambitious vision to level the playing field for small businesses through shipping.

“Using Australia Post’s taxpayerfunded infrastructure more efficiently has got to be good for everyone,” said James Chin Moody, Sendle CEO. According to Sendle’s submission the entrenched functional monopoly that

Australia Post holds over Australia’s post and parcel delivery market has not only stifled competition and innovation but led to less choice for small businesses and consumers.

“For more than 200 years, Australia Post has effectively functioned as a gatekeeper: cutting out competing delivery companies and imposing high and varied fees on small business sellers,” Sendle said in a statement.

To ensure that postal and parcel services in Australia met the needs of the Australian community, it’s been proposed that Australia Post be opened up as a utility through public-private partnerships. This could lead to significant benefits for consumers and small businesses, as well as help to modernise Australia Post and keep it competitive according to Sendle.

Team Global Express – owned by private equity firm Allegro Funds – commissioned research by Lateral Economics to make the case for open access, finding their plan would provide $1.5 billion in economic benefits over ten years, including a more than $500 million benefit in cheaper delivery costs for households and create 2000 new jobs and reduce delivery costs for regional residents. Under current licensing, third party services are unable to access Australia Post distribution centres, pick up or deliver parcels, or access the vehicles they are delivered in. The report also recommended changing current regulations to allow the last mile delivery component to be carried out by third party companies.

In metropolitan areas people can get parcels delivered in multiple places from multiple carriers. But in remote settings, like those in regional Australia, residents must depend on Australia Post as a single provider. An opportunity many logistics providers are likely to seize sits in waiting according to Team Global Express CEO, Christine Holgate.

“By opening that up what you start to get is people investing in more and more businesses,” she says. “All of the top five major postal operations in the world have this. So, it’s nothing new and what it does is create more work for posties and more work for community post offices.”