Australia Post has announced it’s letter business is failing, badly. A half year loss of $151 Million dollars down by a further 56-57%. As Australians increasingly move to sending information electronically (yep email is a thing), the company needs to transition to focus on the exploding growth of package delivery. The problem is that while Australia Post has continued to focus on supporting the dying letter business, something they had a monopoly on, they’re now faced with the challenge of competing in a space that is highly competitive.
If you want to ship a product from one side of the country to the other, or even buy something overseas, there’s dozens of courier companies competing on price that will provide that service. Now Australia Post has to provide a clear reason why consumers and businesses should continue to use Australia post to ship, fly and drive their goods.
Minister for Communications, Malcolm Turnbull says the Government will soon announce reforms to ensure local post offices are viable, the business is sustainable and vulnerable members of the community – particularly pensioners and other concession card holders – will be protected. While I’m sure the prospect of closing down post offices scares some of the older demographic, the reality is now that there are better ways to transport information. If the Government is to ensure Post Offices stay open, despite the business demand no longer being there, it’s an artificial prop up for an out of date business.
Often if people don’t want to engage in the digital world, have no interest in getting online or even buying a computer, it’s only themselves they’re hurting. Well now that disconnection means the rest of Australia’s tax payers are now footing the bill to maintain their offline lifestyle. An email account is free for life, it takes five minutes to sign up for one and with an email you can completely remove the need to mail. You can receive your bills electronically, stay in contact with friends and family and sign up for other important government services.
While Australia Post overall did make a profit thanks to other areas of the business doing well, the trajectory is clear, the mail service is killing the company and without intervention, it won’t survive. Nobody wants an Australia without Australia Post, but the letters system has to be killed off and users need to make the move to email. There’s more than 100,000 new premises added each and every year and this problem is growing.
Turnbull spoke to Nick Glenning a senior partner from the Boston Consulting Group who created a report on Australia Post’s challenge of legacy post services.
