Published on the 11/06/2014 | Written by Beverley Head
After 205 years’ continuous operation Australia Post has confirmed its original business model has been savaged by technology, this week re-organising itself and confirming 900 job losses in the process…
Email, social networks and text messages have killed off Australia Post’s original business model. While the company has benefitted from increased demand for parcel delivery as a result of growing online shopping, that won’t be enough to prop up traditional mail services forever.
Australia Post managing director and CEO Ahmed Fahour said that over the last five years letter volumes had dropped by around 30 percent. He forecast that decline would accelerate, predicting that would lead to $1 billion a year losses “within a few years”, which he said was too large for the parcels business to subsidise despite continuing growth in that sector courtesy of online commerce order fulfilment.
According to the newly released annual survey of Australia Post operations by the Australian Consumer and Competition Commission, Australia Post’s letter delivery service has been a likely recipient of internal subsidies from non-reserved services (parcel delivery) offered by the company since 2009.
But that won’t be enough in the future. Fahour, who has been for the last four years working on his “Future Ready” plan for Australia Post now plans to reduce the headcount at the company by 900. At the end of the 2012-13 financial year Australia Post had 32,700 employees and a $311.9 million after-tax profit.
The company this week also announced that it will effectively split into two units; Australia Post focused on the consumer and small business markets and StarTrack, an e-commerce driven logistics business.
The company has already introduced a new tiered letter-delivery system for business customers – a premium is now charged for the five-days-a week letter service that used to be standard. The cheaper offering delivers mail less regularly.
Meanwhile it has stepped up the range of services offered to consumers to collect parcels – including rolling out self-service lockers around the country.
Australia Post is also attempting to encourage more businesses and consumers to adopt its MyPost digital mailbox service which is available to consumers for free, and allows them to receive and store digital communications in the Australia Post cloud.
It’s been a relatively slow start for the service although Telstra, AMP, Sydney Water and Brisbane City Council are among the early adopters.
Earlier this month the company announced Westpac had signed up as a user of the service, which will in the second half of the year allow its customers to receive statements through a personal digital mailbox if they opt into the service.
Virgin Australia’s Velocity Frequent Flyer, this month also signed up as the first loyalty programme to use the MyPost mailbox service – and consumers will be able to earn Velocity points when they pay bills through the digital mailbox service.
