Australia Post CEO to retire as financial challenges continue

“We have worked hard to ensure Australia Post remains one of the very few national postal operators to not require government funding and remain in public hands, while continuing to invest and grow our operations and supporting our team members, licensees and the Australian community. I remain fully focused on delivering our priorities and supporting a smooth handover,” Graham said. 

In fiscal year 2026, ended June 30, Australia Post recorded an adjusted pre-tax loss of US$75.5 million, reflecting the ongoing decline of letter mail volume, rising delivery costs and competitive pressures in the parcel market. Revenue grew 4% to $6.9 billion, led by parcel delivery with 4.8% revenue growth.

Cost management and productivity reforms, including a new delivery model, generated year-on-year cost savings of $132 million. Operating costs were up 3.9% due to wage growth, increased licensee commissions and contractor rates and higher-parcel volume-related costs. Meanwhile, the company invested $290 million across fleet, technology, facilities, parcel locker and regional network expansion, partly funded by proceeds from property sales.

Parcel performance

Australia Post’s parcel volume last year grew 5.3% behind sustained demand in e-commerce transactions. The national post is feeling intense competition from global marketplaces, private equity and international delivery providers continuing to expand their Australian operations. While volume growth remains stable, pricing pressures and the need to keep investing in network capacity, technology and customer experiences have contributed to higher operating costs, driving lower margins to remain competitive, Australia Post said. 

Last year, Australia Post expanded the parcel locker network by 64.3% to 1,510 locker banks, especially in parcel-focused parts of the country.

Australia Post acquired delivery technology platform Rendr, helping to expand delivery options for customers, and also secured a partnership with Vinted when it entered the Australia market, to support the growing re-commerce market. 

Mail service recorded a loss of $44.3 million, partially offset by an increase in postage rates as letter volumes fell a further 14.7% as more communications and transactions are conducted via digital channels.

Mail continues to weigh on Australia Post’s financial performance. The cost of maintaining a nationwide delivery network increases every year even as usage declines. Without postage price increases each of the last four years, the mail business would have lost $350.8 million more than it did. 

Given the downward trend in letter volume and increasing delivery costs, further price increases and efficiencies will be required to ensure essential services, the company said in its financial report.

Why It Matters: Secular declines in letter volumes, private sector parcel competition and financial losses are common themes for global postal operators, including the U.S. Postal Service and Canada Post. Making things even more difficult for these organizations are government rules that restrict management’s ability to make workforce, operational and financial changes needed to achieve financial stability. 

Australia Post continues to roll out new post offices, with the primary aim of making it more convenient for customers to send, collect and return parcels. 

New parcel distribution center and freighter jets

Last week, Australia Post broke ground on a multimillion dollar parcel facility in the southeastern part of Victoria, Australia, to support the growth of e-commerce in the region. The new parcel facility will consolidate Australia Post and StarTrack courier operations from three locations into one modern, purpose-built center, improving efficiency and service for all stakeholders, the postal operator said.

Expected to open in late 2027, the 107,640 square foot facility will feature advanced automation capable of processing up to 5,000 parcels per hour, with greater speed and tracking ability, while creating a safer work space by reducing manual handling. 

Australia Post said it is committed to ensuring rural communities have access to reliable parcel service as online shopping becomes more prevalent.

The investment is part of a broader effort to modernize Australia Post’s network and deliver faster service, with new facilities opening in seven locations in the past year. 

Australia Post is also adding more air mail capacity in partnership with Qantas Freight, which will add three additional Airbus A321 freighter aircraft to its dedicated postal fleet. 

Australians spent a record $17.6 billion shopping online in the third quarter, according to Australia Post’s latest e-commerce report. Online spending grew 17.% year over year.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Write to Eric Kulisch at ekulisch@freightwaves.com.

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