Logistics News

Letters still weigh on Australia Post transition

Interim results show solid rise in parcels and services

 

Australia Post’s battle to lighten the financial burden of delivering letters is ongoing, even as it parcels business forges ahead in the first six months of the financial year.

The government-owned company reports good interim results from its parcels and services streams, lifting revenues 4 per cent to $3.8 billion but the dead weight of letters sees group profit before tax at $83 million, down $71 million or 46 per cent.

The firm notes that, last year, the first half result included a one-off $37 million benefit from the Aramex and AGS transactions. 

Consistent with previous years, Australia Post expects the second half to again be quieter.

The letters division’s $1.1 billion revenue, down nine per cent, and losses of$87 million rose 112 per cent.

Although Australia Post secured $129 million in efficiencies in the period and has benefited from strong growth in other areas, it says this still has not fully compensated for the increasing costs supporting this important community service.

The issue is one CEO and MD Christine Holgate is keen to emphasise – and flag changes.

“Our strategy to diversify our business and focus on our customers is working well, evidenced by our record underlying performance.

“However, the costs to operate the letter business continue to rise, as our people are still required to deliver to every home or business every day, process and collect the mail, whilst letter volumes and revenues fall.

“The 10 cent letter increase in January will support our letters business going forward, but after four years of no increases, it alone will not fully compensate for the losses. 

“Australia Post and the services we provide are highly regarded in the community, particularly in rural and regional Australia, where often we are the last remaining service provider with a physical presence.

“In order to ensure we are able to continue to provide these community services and remain sustainable, the time has come we must transform our delivery network.”

In noting milestones during the period, she praises the firm’s performance during the bushfire crisis.


Read about Australia Post’s huge new Brisbane parcel facility, here


“This Christmas was our busiest ever and we delivered over 50 million parcels in December, with over 3.1 million on our biggest day,” Holgate says.

“Over 190 million letters were delivered, 4,600 staff hired across the national network and pleasingly during this time complaints to our customer service teams decreased by 14 per cent.

“Ahead of Christmas we also opened the largest parcel processing facility in the southern hemisphere in Brisbane and invested in new automation capabilities across a number of our large processing facilities to continue to service our customers.

“During this period of exceptional growth, our entire workforce worked through unprecedented weather conditions across the country with drought and an early start to our bushfire season in November, and we still met all of our service obligations for letters and parcels.

“The mail continued to make it through to our customers. I am incredibly proud of the critical role our people played in these local communities assisting those in their time of need.

“Although we were lucky to not lose any facilities or post offices during the bushfire crisis, many of our employees lost homes and property and faced extreme stress as they were evacuated for their safety.

“Our post offices and posties were able to play an essential role supporting impacted communities including with access to critical funds through our Bank@Post services, providing free mail redirection, mail hold services and accepting over the counter donations for Red Cross Disaster Relief Fund, which has raised over $1.4 million to date.”

 

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