Business

Australia Post CEO: Two-speed mail service from 2015

FAST-PACED WORLD: Australia Post is changing its business model and wants to know what you think.
FAST-PACED WORLD: Australia Post is changing its business model and wants to know what you think. AUSTRALIA POST

AUSTRALIA Post has announced a two-speed mail system for regional Queensland.

The changes are outlined in a letter from managing director and chief executive Ahmed Fahour:

 

THE rise of the internet and digital economy is changing Australia Post.

Australia Post recently announced an overall loss for the second half of the 2014 financial year, marking the first time our business has made a half-year loss since being corporatised in 1989.

And while I am confident we will sustain Australia Post's role in the local community, we have now reached a turning point where we must address the growing financial losses in our heavily regulated letters services as the result of declining mail volumes.

Since the peak six years ago, the number of letters delivered per letterbox has fallen by a third, as Australians have embraced digital communications.

So if six years ago you received, on average, three letters a day, today you will receive two.

This decline in volume has resulted in about $1 billion of accumulated losses in our letters business.

So the challenge for us is to manage the decline of letters, while also capitalising on our opportunities to serve our customers in new ways.

At the forefront of our mind is maintaining our network of more than 4400 post offices that place us at the heart of Australian communities.

This includes more than 520 post offices in regional and rural areas of Queensland, where sometimes we are the only service provider in town.

Strengthening and modernising the post office network will help us continue to be a trusted and useful service provider.

And we've already started this process. We're expanding our footprint of superstores, a modern-day GPO, to have 50 in regional and rural centres by the end of the decade including Cairns and Toowoomba.

These stores will feature a range of new technologies and services designed to cater for our customers' changing needs.

From this November, we will also open our corporate post offices on Saturdays and extend the existing network of Express Post letter and parcel deliveries to six days a week.

And from next year we want to introduce a two-speed letters service, providing customers with a choice over how they send letters.

This includes a "priority" service delivered five days a week and a cheaper "regular" service delivered to a slower timetable at a lower price.

Doing this allows Australia Post to reduce the losses we make on our mail delivery, primarily used by government and business customers, who send more than 95% of all mail.

The alternative is the taxpayer subsidises senders - a notion we do not support.

Ensuring the sustainability of more than 470 independently owned small businesses operating as licensed post offices and community postal agencies in regional Queensland is a key focus.

These post offices are facing the same challenges of declining letter volumes and retail foot traffic as the rest of our network and we are reliant on them to ensure all Australians are able to access our services.

Over the past 12 months we have increased the payments we make to them, but more importantly we are ensuring they have the right technology to be able to offer the services their local communities need.

For 26 post offices in Queensland that are using manual processes, we're offering an electronic point of sale connection to Australia Post's systems, which will change both what they can offer to their customers and the efficiency of how they manage their businesses.

This modernisation process will take time but it's a change we must make. Simply continuing to do what we have done in the past will not ensure our future, so we are changing today.

Whatever changes are introduced, our posties will continue to deliver five days a week to your street, while there is still demand for this service from senders.

You will continue to see our post offices across the country serving the community on a range of important trusted services. This won't change.

I encourage you to jump online at www.auspost.com.au/conversation to tell us how Australia Post can remain relevant to you and your local community.

Topics:  australia post editors picks post



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