eCommerce Uptick Not Enough to Fix Australia Post’s Shipwreck

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As Australia Post’s delivery services continue to sink deeper into troubled waters, an uptick in e-commerce is proving to be a life jacket that may not be enough to save the ship.

Australia Post has cautioned that more than Australians’ increasing use of digital commerce will be required to rescue its declining letter delivery business.

Last week, CEO Paul Graham spoke to the American Chamber of Commerce in Melbourne. He stated that the company delivered 500 million parcels in 2022, with an economic value of $500 million. However, he pointed out that this high volume of deliveries still leaves the company’s traditional role vulnerable.

“Due to the decreased number of letters sent, our business is expected to suffer a financial loss this year. We already experienced a loss of $189 million in the past half-year. This decline in business is also negatively affecting the number of customers coming into our post offices,” Graham said.

Graham suggests that Australia Post’s policy on delivering letters must be modified to stay financially sustainable without external funding.

“The performance standards established under the 1989 Australian Postal Corporation Act are no longer suitable for Australia Post as a company or for the everyday customers and communities we serve,” he said.

“To achieve a sustainable future, we require the parliament’s dedication and willingness to implement necessary changes.

“Later this year, parliamentarians may be asked to review potential changes to Australia Post to ensure the business remains financially stable.

“I am only asking that the national interest be prioritised.”

He said the organisation is experimenting with a new model to increase the number of people visiting post offices in regional areas.

“We are piloting a new community hub in Orange by expanding the post office’s infrastructure and developing a new format. Our goal is to provide better services to customers in regional Australia. Despite others leaving, we are investing in the regions,” Graham concluded.

The community hub provides local businesses with a retail space inside the post office with parcel lockers and other features.

Moreover, Graham also announced the Post26 strategy, which aims to maintain high performance in the e-commerce business and create top-notch digital experiences. The process also focuses on simplifying products and services, which can also help streamline operations and systems.

Australia Post is sailing through choppy waters, but it can remain afloat with the right attitude and a commitment to modernisation. We look forward to seeing how this national institution rises above its current difficulties.

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