Profits plunge at AusPost

AusPost is grappling with the legacy of a declining letters business as revenues shrink but fixed costs (those costs, such as rent, that do not fall or rise with the volume of business done) continue to rise.

Revenues from letters fell by 9% in the last financial year to A$2,216 million, while losses increased to A$192 million.

“Fixed costs to operate the letter business continue to rise with increasing delivery points, although there has been no increase to the basic postage rate in over three years, when Australia Post delivered 822 million more letters. It is important letter pricing is addressed responsibly to ensure essential community post services are protected,” the company said in a statement. 

“Without an increase to the basic postage rate, Australia Post will no longer be able to afford to fully subsidise the losses from the important post business, which would risk the closure of community post offices and a reduction in services. Australia Post is absolutely committed to honouring our community obligations and appreciates the essential role we play in communities, but urgent help is required,” the company said.

Revenues from the carriage of domestic parcels rose by 9.2% to A$3.18 billion and revenues from the international parcel business also rose, by 15.7%, to A$586 million.  

Bob Chizzoniti is a director of the Post Office Agents Association Limited (of POAAL), the national representative association for small business owners in the postal sector.

“The growth in delivery points and continuing fall in letter volumes present a challenge to Australia Post. Parcels are increasingly important to Australia Post and to our members. We have the biggest – and in my opinion best – delivery and retail network in Australia. It’s up to Australia Post to leverage that network and the Australia Post brand to continue to grow parcel volumes and profitability,” Chizzoniti said.

AusPost last year delivered more than three billion items. That’s more than 1.3 million parcels a day. Auspost delivers to about 11.9 million delivery points across Australia. The company has 4,356 post offices and its network included 15,085 street-sited post boxes; 7,000 motorbikes; 6,500 delivery vans; 2,600 trucks and six airline freighters.