Australia Post announces renewed focus on parcels, cutting back letter deliveries

Australia Post will cut back on letter deliveries to focus on parcels in a move that’s hoped will help the organisation’s flailing financial viability.

The Albanese Government has moved to change Australia Post’s performance standards to see regular letters and unaddressed mail delivered every second day.

Posties will instead focus on parcels, express and priority mail which will continue to be delivered every day.

Communications Minister Michelle Rowland said that changing consumer needs, including the rise of e-commerce and online shopping, means that Australia Post “needs to adapt”.

“These new processes will mean Australia Post continues to deliver the high-quality letter service many Australians rely on, while also growing its booming parcel business for the benefit of consumers, small businesses and its hardworking staff,” she said.

“Australia Post belongs to all Australians. Modernising Australia Post will put it on a surer footing so it can deliver the essential community services Australians need – including those in rural, regional and remote areas”.

Trials of the new delivery method have allowed postal workers to carry up to 20 per cent more parcels and increase delivery points by more than 10 per cent.

It’s hoped the changes can boost the financial stability of the publicly owned institution, with Australia Post recording a $200m loss in the last financial year.

“In an environment where customers are sending fewer letters and more parcels, it is important that the business structure of Australia Post reflects the needs of the modern Australian consumer,” Finance Minister Katy Gallagher said.

“The fiscal sustainability of Australia Post is vital to the government’s ongoing commitment to provide high quality postal services to Australians”.

Letter delivery volumes have fallen by two-thirds since they peaked in 2008, while more than half a billion parcels were delivered in the last 12 months.

The average Australian receives just two addressed letters per week, with only 8 per cent of letters being sent as priority mail.

Australia Post chief executive and managing director Paul Graham applauded the federal government’s support on Wednesday and said the reform road map was important in securing the postal service’s future viability.

“After decades of discussion and debate about modernising Australia Post, we applaud the federal government for taking this important initial step to set us on the path to securing our future,” Mr Graham said.

He said the proposed changes would help “turbocharge” the eCommerce delivery service, which was outlined as the strategic priority of Australia Post into the future.

By identifying that Aussies send fewer letters, he said the number of parcels and packages would be freed up for posties to deliver.

Shockingly, Mr Graham confirmed Australia Post had only been afforded census data from 1991 to map out the postal network in rural and remote areas, something the government has agreed to update.

“The decision to use the most recent census data means it accurately reflects the significant population and geographic changes over the last 30 years,” he said.

Despite the changes to letter delivery, he said urgent mail would be unaffected and delivered as it “always has”.

It’s not the only change being considered at the organisation, with the consumer watchdog currently analysing an AusPost proposal to increase postage rates.

Australia Post is seeking to increase the basic postage rate from $1.20 to $1.50 in early 2024 while keeping prices for Christmas stamps at $0.65.