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Letters put $125m hole in AusPost

Wednesday, 27 February 2019
By Wayne Robinson

Letters plumetting: Australia Post

The country’s mail monopoly Australia Post lost $125m on its letters service in the six months to December, causing profit at the service to slump by 45 per cent.

PIAA CEO Andrew Macaulay is calling on the government to prevent an Australia Post response that would be “gouging the private sector” by requesting price rises to address the loss. He said, “Someone needs to take action so Australia Post does not price mail out of the market.”

PIAA president Walter Kuhn has also just met shadow finance minister Jim Chalmers, and impressed the same message on him. He said Australia Post is ‘reacting blindly’.

Sending message on AusPost pricing: PIAA president Walter Kuhn (right) with shadow finance minister Jim Chalmers

AusPost made$118m profit in the half year, down by $102m on the previous period, with revenue virtually static at $3.6bn. Parcel revenue increased by nine per cent to $1.9bn. A record 40 million parcels were delivered in December.

Australia is posting 800 million less letters than three years ago, and the current rate of decrease is the fastest in the 210 year existence of AusPost.

Macaulay said, “PIAA contends that the continued failure of Australia Post to pursue operating efficiency and rely only on price rices can only hurt mail industry and by knock on effect damage the printing industry as a whole. The flow on effect is damage to the Australian retail economy.

“A 10 per cent increase on operating costs is risible, this is 7 per cent above inflation, and it is clear that Australia Post corporate has not placed any emphasis on securing operational efficiency.

“The print sector continues to innovate and find efficiencies. PIAA extends a cordial and sincere invitation to Christine Holgate to meet and collaborate on making mail sustainable. The mail industry is Australia Post’s largest customer segment, and it would undoubtedly assist Australia Post to meet with and have ongoing dialogue with the industry peak body.

Walter Kuhn,president of PIAA said “While the increase in parcels deliveries is commendable, it indicates a market shift rather than a directly attributable efficiency on the part of Australia Post. They continue to react blindly to market forces, with missteps and mis-calculations in their boardroom, rather than actively and proactively seeking the same efficiencies that the Industry as a whole is collaboratively working towards.

“The visual communication industry has a vested interest in increasing volume of direct mail throughout the Australia Post Chanel. If Australia post needs to increase volume of mail through its supply chain to keep the pricing down and as a viable option then it needs to work with the industry to promote the benefits of mail and Look for efficiency’s throughout the supply chain.

“We are the largest customer Australia post has, and we should be working together to find the benefits that will give us the increases that is required this ensuring that we are not priced our products out of the market and creating our own demise.”

“Industry is collaborating to promote and drive direct mail, by running the ‘Direct Mail- the Real Disrupter’ innovative marketing event in Brisbane on Monday 11 March,” said Rod Peirce, Director of Smartcomm. “Direct mail is key to our economy, and print and marketing businesses continue to deliver value through this channel for retail”.

No Responses to “Letters put $125m hole in AusPost”

  1. February 27, 2019 at 9:18 pm,

    christopher day
    said:

    Aust Post management and unions have been responsible for the loss of post revenue for last 30 years,,I represented PIA and DMIA at Royal Commission years ago and all the Presentations by Industry’s that dealt with Aust Post said the same thing that Posts answer was always to increase prices and make it harder to use their services. At the end of the day their a delivery service yet their charges in many cases are higher than all the processes required to produce the item the client wanted to mail, totally out of step with reality.
    In addition to be able to lodge mail on behalf of their clients Print company’s, mail houses etc had to throw out all their ink jet equipment and update to digital at huge cost or else lose their clients. And the reality was Aust Post never completed buying the equipment that would sort the mail to individual property which was reason in first place.
    The Ruling by Prof John Martin was damning of the attitude of Aust Post to all the organisations having to deal them every day, and at the time they only got a fraction of the increase they had tried to get. The line up of Lawyers they had at the enquiry was mind blowing.

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