Australia Post to End Daily Delivery of Letters

Australia Post Office mailboxes in Bondi in Sydney, Australia on Oct. 28, 2020. (Ryan Pierse/Getty Images)

Australia Post’s daily delivery service will be cut from daily to every second day under proposed reforms by the Albanese government.

This follows the national mail carrier announcing a A$200 million (US$132 million) dollar loss in the 2023 financial year, noting the “declining letters business” was weighing heavily on the parcel business.

The federal government explained it would be undertaking reforms so Australia Post could “boost productivity” and “increase its focus on parcels.”

Australia Post is wholly owned by the government and under the responsibility of the Minister for Finance and Minister for Communications.

Growing “digitisation” and consumer needs means Australia Post needs to “modernise” to keep pace with what Australians need, the government explained.

Government Amends Delivery Standards

The federal government plans to amend delivery standards to reduce letter delivery frequency to every second business day for 98 percent of areas. Parcels will still be delivered every day.

Australia Post will also be able to change how it manages priority mail, offering services at a commercial rate and “work with customers to set appropriate terms and conditions.”

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Explaining the changes, Communications Minister Michelle Rowland said Australia Post “can’t stand still” and needs to adapt as consumer and small business demands change.

“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,” Ms. Rowland 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.”

Letter Volumes Have Fallen

The reforms come after consultation with businesses, unions, post office licensees and agents, and the Australian public.

Letter volumes have fallen by two thirds since their peak in 2008, but parcel volumes have boomed.

“Australia Post delivered around half a billion parcels in 2022-23 and the average Australian household now receives just over two addressed letters per week,” the government said.

“In light of these challenges, Australia Post has worked cooperatively with its workforce and the Communication Workers Union to trial a new model for mail delivery at selected sites nationally.”

The Department of  Infrastructure, Transport, Regional Development, Communications and the Arts plans to consult on these new delivery standards in early 2024 before a planned implementation next year.

Paul Graham, the chief executive officer and managing director of Australia Post, described the modernisation plans as a “significant day in Australia Post’s history.”

“The reform roadmap announced today by the Minister for Communications, the Hon. Michelle Rowland MP and the Minister for Finance Senator the Hon. Katy Gallagher is a crucial first step in the modernisation of Australia Post,” he said.

“These reforms establish a platform for Australia Post to build a more sustainable business, while still providing secure employment for tens of thousands of posties and other team members, as we continue to deliver for our customers and the community every day.”

Furthermore, Finance Minister Katy Gallagher said fiscal sustainability of Australia Post is “vital” to the government’s ongoing commitment to provide high quality postal services to Australians.

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

How Did Australia Post React?

Mr. Graham, Australia Post’s CEO, applauded the federal government for the “historic reforms” after decades of discussion and debate about modernising Australia Post.

The boss of the national postal carrier said the announcement recognises the true cost of mail delivery and the need for greater flexibility.

“Today’s reforms provide us with additional scope to adjust our pricing when needed, while maintaining the checks and balances on stamp prices that Australians want,” Mr. Graham said in a statement from Australia Post.

Australia Post mailboxes in Coogee in Sydney, Australia on October 28, 2020.  (Ryan Pierse/Getty Images)

“While this reform package will provide some meaningful financial benefits over the next four years, we look forward to working with the federal Government on further reforms to ensure we remain financially sustainable beyond 2026.”

Further, Mr. Graham welcomed the changes to letter delivery frequency, explaining this would help Australia Post focus on parcel delivery.

“The changes to the frequency of letter delivery will enable us to focus on what matters most to Australians—fast and reliable parcel delivery with better tracking technology and quicker turnaround times for eCommerce,” he said.

“As eCommerce continues to boom and fewer and fewer Australians send letters, the changes to letters frequency announced today will free up our posties to also focus on parcels and packages. This will further turbocharge eCommerce in Australia.”