COVID-19 could spell the end of daily delivered mail

COVID-19 hands Australia Post a golden opportunity to end daily letter delivery.

australia post mailbox

Paul Alexander, Curtin University

Australia Post delivered more than 3.3 billion items last financial year. That’s almost 14 million deliveries a day (not counting weekends and public holidays).

Its 2019 annual report itemises the massive logistical network required: 15,037 street post boxes, 4343 post offices, 461 sorting and distribution facilities, 4845 delivery vans, 2600 trucks, six airline freighters, rail assets, and 8992 motorbikes and electric delivery vehicles.

Letters and parcels move in ‘waves’ to 12.1 million addresses daily. Federally legislated service standards oblige Australia Post to deliver a letter within the country in no more than four days at a fixed rate (currently $1.10). And to do so every week day to 98 per cent of all delivery points.

Or at least Australia Post did so until late April. That’s when the federal government granted a temporary suspension of the services standards, allowing it to deliver letters every second business day in metropolitan areas.

The rationale was to enable Australia Post to divert resources from letter delivery – the part of its business in decline for at least a decade – to the booming demand for parcel delivery driven by COVID-19.

In May, with support from the Senate crossbench, the government passed amendments extending the suspension to June 2021.

That move is not universally supported. Unions fear postal workers will lose jobs. Federal opposition leader Anthony Albanese has signalled Labor Party support for a Senate motion to overturn the changes.

These cuts are to jobs, these cuts are to services that are absolutely essential […] In particular, older Australians really rely upon their postal services.

It’s true Australia Post provides an indispensable service. But its revenues tell a story of people relying on postal services less and less.

Lost letters
The decline of the letter business over the past decade has been relentless. In 2009, Australia Post made a profit before interest and income tax of $384.5 million. Of this, its letter business generated $52 million. Parcels and logistics made $187 million. Other business (such as agency services and merchandise) made about $146 million.

In 2019, its net profit was down to a razor-thin $41 million. Profit before interest and tax for its non-letters businesses was almost $259 million. Its letters business lost almost $192 million.

Australia Post can still make profits delivering letters in major cities and regional centres, where population density is high and distances short. But not in in rural areas, where per-delivery costs skyrocket. Its commercial competitors, meanwhile, can cherry pick the most lucrative market segments and avoid the loss-making ones.

Parsing parcels
Australia Post has long yearned to be freed from its obligation to deliver letters daily. In 2015, then chief executive Ahmed Fahour declared letter posting “in terminal and structural decline” and that Australia Post “is a parcels company more than a letters company”.

In March, current chief executive Christine Holgate told a Senate estimates committee:

Our most significant challenge is managing the tipping point of that transformation from letters for our delivery network, which is about 70 per cent of our costs, which is actually now in need really of a significant transformation.

The cost of delivering a $1.10 letter is not much less than a $10 parcel. It makes no commercial sense to utilise resources on loss-making activities at the expense of profitable ones.

But Australia Post is not just another corporation. Profits are not its only measure of success. It is owned by the nation. Its services are essential, particularly to rural communities.

Fingal Post Office, in north-east Tasmania. Shuttterstock

At this time, a strong case can be made that it is a better social service to ensure timely parcel delivery.

In the longer term, the issue for policy makers is whether the social good is best served by keeping Australia Post to its historical obligations, or allowing it to meet burgeoning parcel demand and return a bigger dividend to the federal government to help fund other public services.

While opinions will vary, the numbers make a compelling case. They show a mail delivery system designed before the advent of the internet doesn’t need to be daily any more – just as the telephone last century helped end the importance of mail being delivered twice a day.The Conversation

Paul Alexander, Associate Professor, Network analysis, Procurement,Supply Chains, Curtin University

This article is republished from The Conversation under a Creative Commons licence. Read the original article.

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    COMMENTS

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    Life experience
    3rd Jul 2020
    4:07pm
    I wouldn’t mind second daily delivery as long as I know which days they are so I don’t waste my time checking daily. But if it’s second daily and one day is Tuesday and they don’t work weekend ? I would only get 2 delivery’s week ?
    AutumnOz
    4th Jul 2020
    1:23pm
    We have only had two deliveries of letters for about six weeks, we don't have a parcel delivery service just a card in the letterbox to say there is a parcel at the post office in town.
    That used to work well with daily delivery of letters but now if the parcel card is delivered late on Friday there isn't enough time to get into town to pick it up before the PO closes for the weekend.
    Australia Post is supposed to be a service for the community and so it is for paying bills etc. but there is not much service when it comes to deliveries of either letters or parcels unless people live within a km of the post office. For anyone living well out of town the "service" is no longer there.
    45er
    3rd Jul 2020
    4:10pm
    Australia Post is a Service, therefore it is not necessary to be a profit centre.

    Postal Services, and all other Services, Telephone, Health, Power,etc. were provided by Governments, however now the Service element to all Government Services seems now to mean profitable.

    Those making these decisions must learn the meaning of the word "SERVICE".
    Horace Cope
    3rd Jul 2020
    4:22pm
    I agree 45er, there must be some areas of government that run at a loss because to charge what they are actually worth would make them prohibitive for the average user. Transport springs to mind as the actual cost of running trains, buses and ferries is very costly, not only the day to day wages and running costs but also the cost of renewal of vehicles/rolling stock/ watercraft. In the past, some bureaucrats have convinced governments that everything must be run at a profit so prices rose or the utility/service was sold to private enterprise and we know how that panned out; job losses and higher costs.
    KSS
    3rd Jul 2020
    4:23pm
    Australia Post has been looking for an excuse to stop deliveries for years. This is just another one. They have already said they are sacking hundreds of workers over the coming months. They will then be able to say they can't deliver mail even every second day so cut it to once a week. They can then move to eliminate it altogether on the grounds few use the service. It already takes more than a week for them to deign to deliver a letter from one suburb to the next and it is expensive to use. Parcel delivery is hit an miss with 9/10 never actual;y being delivered at all. Far easier for the driver to stick a card in the letterbox than actually try knocking on the door. So AP try to force you into having a mail box with them so you have to get it yourself. The tipping point comes when enough people act as their own pastie so that give AP another excuse to stop deliveries altogether. No wonder then that people are reluctant to use it. It is all so predictable.
    Fedup
    3rd Jul 2020
    5:01pm
    That really annoys me when I’m waiting home for a parcel delivery (which I know is coming because of tracking) and the next thing I know there’s a card in the letterbox claiming delivery was attempted, and I have to go to the PO to pick it up. But not until after 4 and not always the PO closest to me.

    If they want to specialise in delivering parcels they need to lift their game and actually deliver them!
    FrankC
    3rd Jul 2020
    7:25pm
    I have ben waiting for an item, not very bigh, coming from CA. in USA. I have tracjked it to Australia, but each time i go on site to tyarck its progress, I keep getting the same message,,"It's on its way" Signature not required.It was sent on the 30th March. !! How much longer am I supposed to wait. ?
    Greg
    3rd Jul 2020
    11:08pm
    If it's arrived in Australia in over say a week ago you ring AP and they can check it out.

    Where did it say it was, at the airport (customs?), at a mail centre (nearby, across the country?)
    Priscilla
    3rd Jul 2020
    4:44pm
    Service is non-existent, it is only the mighty dollar that matters. I thought Centrelink was bad for customer service but superannuation companies, insurance companies and banks make Centrelink look good!
    geordie
    4th Jul 2020
    2:33pm
    I suppose this is why I've seen them called Post shops instead of Post offices. Their service is becomming a joke.
    patti
    3rd Jul 2020
    4:48pm
    This has been coming for a while, Aust Post has been trying to cut back their services, like everyone else. It's not a reliable service any more - I posted a birthday present from the Sunshine Coast in Queensland to my grandson in Adelaide and it took almost two weeks to arrive. It seems we either have to pay exorbitant.Express Post fees or post at least 2 or 3 weeks before the event. But I bet the cost will not go down!
    Golden Oldie
    3rd Jul 2020
    4:50pm
    I received by post a letter from the Australian Tax Office, dated 19th June, 2020, on 29th June, 2020. Note at the bottom " Check your details are correct" before 30th June, 2020. The next day, 1st July, the MyGov website crashed. Wonderful systems.
    john
    4th Jul 2020
    10:51am
    i DON'T KNOW ONE INDIVIDUAL THAT HAS BEEN ABLE TO GET ONTO myGov at home on their computer, first tome up trying!
    I even had a officer at a centrelink office actually come to help me , and she also could not get onto my site. Now I had gone in there,because of just that reason.
    I don't know but I think it is like Aus Post all about saving or not spending enough money on the public services we are entitled to, not a hand out, service should be there and competent as well.
    Fedup
    3rd Jul 2020
    4:56pm
    One of the reasons people are posting less letters and cards is because it takes so long these days for them to be delivered. AP are deliberately running down the service to encourage people not to use it. If they are doing such a booming trade in delivering parcels, then they don’t need to make a profit on letters. Different people deliver the letters to the parcels. What happens to them if deliveries are cut to three days a week?

    Who is Ahmed Fahour to state that Australia Post is a parcels company more than a letters company? It is what people want and need it to be. I remember when we got two deliveries a day, plus one on Saturdays.
    Eddy
    4th Jul 2020
    3:26pm
    Yes Fedup, and we had telegrams and my mother had to go to the post office to pick up her Child Endowment, people worked a 44 hour week, pay was in cash delivered in a small envelope, football was always played on Saturday afternoon and shops were all closed on Sundays. Times change and we cannot live in the past. The real reason people are not posting letters these days is that internet communications is cheaper and faster. I even get most of my bills delivered electronically, greeting cards are now on-line. Sometimes I can go a week or more without getting a letter in my letterbox, only flyers from pizza companies and cards from real estate agents. Times change and we have to accept that things cannot always stay the same.
    80 plus
    3rd Jul 2020
    5:16pm
    It would help if government entities used Australia post.
    johninmelb
    3rd Jul 2020
    5:19pm
    This is stale news. Was first reported months ago.

    The sad facts of life are that the majority of Australians no longer live in the 1950's. It is now 2020, the world has moved on.

    I also remember two deliveries a day, and one on Saturday morning. I also remember posties on bikes with whistles and stamps were fourpence. I also remember the milkman with the horse and cart, and the breadman delivering fresh bread, not to mention the dunny trucks emptying the cans in our outside toilets.

    Why do people want to go back to stoneage living? I sure don't.

    Like the rest of you, I am sad that people no long write letters. I used to love getting letters from my friends. BUT, it always took so long from my friends overseas. Now I have the joy of almost instant communication with emails, whatsapp, etc., and I am writing more now to my friends all over the world than I ever did years ago.

    It there is one consistent thing about YLC, it is the dinosaurs that can't move forward and embrace change. I am 70 now, and seen a lot of change over those years, some of it good, some of it not so good, but I didn't fight it, I embraced the challenge and moved forward with it. It wasn't always easy, but then you see, I am one of the lucky ones. I was born with a brain in my head, and the ability to keep that head out of the sand.
    diamond
    3rd Jul 2020
    10:43pm
    Would enjoy reading the comments on here if it wasn't for the people who consistently feel the need to insult everyone else whist boasting about their superior intelligence.
    john
    4th Jul 2020
    10:23am
    I am 70 too Johninmelb. And I spent 30 years with that mob something to be proud of once by the time I got out , the service was a dead one, there will be less letters , but there will always be a need for letters there are some things that need hard copy and believe it or not some people write to each other,and don't call the likes of me a dinosaur brother.
    When I talk I talk about facts and what happened to the service,it what this whole Post thing is about the AL[P put Fahour in charge and from his day onwards it became profit making as the only avenue, management from low middle to top hunting after bonus and keeping position to put into place a Parcel Transport company , they may as well just have bought TNT the gov, and profiteered with that.
    If you are incapable of not seeing the real thing behind a set up that has been underhanded changed and twisted for profiteering, don't comment, because you don't know, and COVID19 has absolutely nothing to do with it, and have a little look at the damned parcel service, somethings taking weeks to arrive at a destination.
    john
    4th Jul 2020
    10:32am
    OK Johninmelb lost my comment to you maybe too hard, but Ahmed Fahour set up the rot that is still happening now and he is so... relevant... to the situation of destroying an institution that is and was a disaster.ended up with the most huge salary a public servant ever had , and destroyed the POST OFFICE

    I personally don't give a you know what, about his ancestry, never have I ever spoken about what or who he is.
    But I do know about his culling and killing of Australia Post and his massive salary , all Australians should be aware of the way their service was mangled!

    Proof is in the pudding right now today.I'm 70 and I've got a brain too mate.
    Greg
    4th Jul 2020
    10:11pm
    johninmelb - exactly, there's a lot of old fuddy duddies on here.
    They don't like to change their ways.
    Good on you find speaking out.
    BillF2
    3rd Jul 2020
    5:25pm
    If Australia Post doesn't want to do what it was intended to do, and fails to give the service Australians expect, then maybe we should start another postal service and ditch the existing one. In the UK my brother uses the German postal service for his business because it is cheaper and more efficient than the UK Post Office. Maybe we should ask the Germans to do the same here. It could hardly be worse.
    Life experience
    3rd Jul 2020
    5:35pm
    The cost of posting overseas is so expensive now. . Much cheaper to order online now and post from their country. They have increased the cost far too much. Why are china’s postage services so cheap and we are so expensive. I don’t send parcels. I recieve.
    johninmelb
    3rd Jul 2020
    8:55pm
    Cost me over $20 to send a $2 calendar to a friend in the UK at Christmas time. Won't be doing that again.

    The reason Chinese merchants on Ebay can sell stuff so cheap with "free" postage is because the Chinese government subsidises the postage for them apparently.
    Life experience
    3rd Jul 2020
    10:55pm
    I’ve been hit hard too sending to Uk . Never again.
    3 pairs of earrings and card $25
    3 paper face masks $20
    KSS
    4th Jul 2020
    12:57pm
    Most of the online international shopping I do is for occasions such as birthdays and Christmas. And I do it because not only may the gift be cheaper than buying here by itself, I don't have to pay the ridiculous charges form AP. Delivery is generally free (ok the cost is amortised across the price of the goods I get that) to an adress in that country and usually only takes a day or two, not the weeks to go from one suburb to another here in Australia.
    Greg
    3rd Jul 2020
    5:35pm
    No I wouldn't miss them at all, once a week would be fine. Rarely get any REAL letters now anyway, council rates are the only regular thing and that's quarterly, anything else is usually junk mail.
    skinner
    3rd Jul 2020
    8:24pm
    NO! Keep delivering every day, M-F!
    skinner
    3rd Jul 2020
    8:24pm
    NO! Keep delivering every day, M-F!
    SuziJ
    4th Jul 2020
    7:56am
    I check my mail once a week as I receive my bills by email. I don't see any use in bending down just to look into an empty letter box.

    But I think of those elderly who don't have internet, let alone computers, or even mobile phones. They don't have any other way for their bills to arrive, but by post.

    Not everyone has the capability to purchase or learn how to use computers, but we'll fade away and die someday.
    john
    4th Jul 2020
    10:46am
    Suzi I get something in the mail nearly every day at least 4 weekdays, the postie brings special delivery too, if he can carry it.
    The mail is meant to be a service, I know it is I did it, it is barely that now.
    Letter wise? We know that is less now, but it is still a legislated service operation, some things need to be hard copy, its all very well like the Melb man bagging it as useless, the point is that people I am in contact with, tell me letter clearances are not what they were, but , they are still substantial, and the article reports 4 day delivery service guarantee, that is not what it used to be, and also when the "standard of service" was operating at it full capacity, we always delivered nation wide that service, 96% to 98% on time, that means between 96 and 98 letters were delivered out of 100 ON TIME, the last 2 or 4 were a day late! I sent a parcel via POST TO MY SON IN ANOTHER STATE, SENT IT ON A THURSDAY TOOK UNTIL THE TUESDAY WEEK AFTER ,12 DAYS , WA TO VIC (MELB) TO GET THERE, AND WENT VIA BRISBANE!!!!
    john
    4th Jul 2020
    10:09am
    Post 's standard of service obligation used to be next day delivery in the metropolitan area, 2 days country, 2 days capital city to city, 3 to 4 days interstate country.
    That was when there was many millions more letters, we're talking letters here, the takeover by Ahmed Fahour early 2000's led to the Postal infrastructure for a postal industry , all of a sudden turned into a gigantic parcel industry, on the back of Fahours obsession with internet buying and parcel delivery, when postal workers became parcel workers, everywhere, over killing loads of parcels at agency post offices and Post shops (as he called them) and spent years with a huge parcel content unable to be handled because it got too big, vans doing truck loads of heavy parcels, a complete shambles of trying to turn a mail oriented operation into a Transport company picking up everything , they even bought Out StarTrack transport company to help.
    And yet it can still take weeks to get a parcel interstate , letters are not like they were, but they are still substantial enough to have to clear street post boxes, but even that has been culled to a degree, 6pm post by standard is gone and some boxes are left uncleared because of these changes to save money, mail was always considered too important to be left overnight in street boxes, there were always vandalising situation boxes burnt out ripped out of the ground on occasion.
    No COVID 19 has nothing at all to do with less home deliveries, there will not be as many letters but there WILL ALWAYS BE AN AMOUNT OF LETTERS, needed to be securely picked up and delivered daily. This is a cost cutting exercise by Australia Post.
    Once an iconic service now a profiteering operation, collection and mail movement work always used to be happening on weekends, too.
    So I can guarantee you that once this was a great service. Stamp cost has doubled and more since about 10 years ago, $1.10 when it was 55cents, and walk into a Post Office plenty of services to pay your bills , but the cost of any goods you buy is a rip off, the Post has been ruined .
    I bet there is not one person that hasn't got a horror parcel delivery/arrival story to tell.

    This happens when smart (so they think) people try to cost cut and change a system , unfortunately Post is done, and will never be a service gain, just a money grabber, that screams poor every day!
    KSS
    4th Jul 2020
    1:00pm
    And don't forget john, the PO charge a fee for paying over the counter too!
    Greg
    4th Jul 2020
    10:08pm
    A couple of weeks ago I purchased printer ink online at 12.24 pm Thursday, the ink was in my hands at 2.15pm Friday and that's 700 kms away and interstate.
    The mail isn't always slow. Standard postage too.
    bobm
    4th Jul 2020
    3:03pm
    For those who had a twice weekly delivery, lucky you.
    Discussion at the local retired gym come down to "Gas bill today, the costs have gone up" What was your's".
    I haven't got my account yet was my reply. I have waited up to two weeks later just after the last date of payment. The postie calculates the payment date and delivers my mail after that date. Service provider and Bank credit cards are the worst.

    The postie holds the mail to cause you problems. Now all is on line so the Postie has little need to deliver


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