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The biggest winners as Australia Post unveils plan to modernise

Australia Post to cut letter deliveries

AAP

Those who prioritise and need more frequent and convenient parcel deliveries will be the big winners from Australia Post’s pledge to modernise, according to experts.

Under a new strategy announced by Communications Minister Michelle Rowland on Wednesday, Australia Post will soon only deliver standard letters to most households every two days.

Edith Cowan University associate professor Flavio Macau said the plan clears the way for the national postal network to double down on more frequent online shopping parcel deliveries.

That means Australians should get their shopping delivered faster and increasingly with the added convenience of additional collection options such as parcel lockers, Macau explained.

“Australia Post is investing to further increase convenience for users [and] planning to make more lockers available,” he said.

“It recognises that not every doorstep is safe for delivery, and that most users are not happy to drive to a store, during working hours, and wait in a queue to finally pick up their parcels.”

New delivery model

Posties will still visit every door on their round each business day under the rules, with parcels and priority mail to be delivered every day in largely the same way as now.

What will change is that standard letters will only be delivered to half of the route each day, alternating so that households receive letter deliveries less often between Monday and Friday.

Paul Alexander, an associate professor at Curtin University, said the changes have been a long time coming, agreeing that faster parcel deliveries will be a key benefit for most households.

“Instead of filling up their capacity with letters, posties will fill up their [delivery] capacity with parcels,” he said.

“Those three-wheel vehicles they use can hold 70 kilograms and they will still go around every day, but mostly they will have parcels in them.”

The changes will also help put Australia Post on more sustainable financial footing following its $200 million loss in 2022-23, which was driven primarily by its ailing letter delivery business.

Alexander said that will enable further investments in the parcel network, including replacing ageing letter infrastructure with parcel facilities and also a larger nationwide locker network.

“Their post offices will become more automated, and those digital lockers will start [expanding] too,” he said.

“That costs a lot of money to roll those out.”

Postage pricing uncertain

The immediate effect on parcel and letter pricing under the plan is not entirely clear, with the government on Wednesday saying it is working on separate regulations that will oversee this.

It comes as the Australian Competition and Consumer Commission (ACCC) assesses a draft plan to increase basic postage rates from $1.20 to $1.50 in early 2024, though prices for concession card holders will remain at 60 cents and Christmas stamps will still be 65 cents.

Australia Post chief executive Paul Graham said vulnerable Australians will be protected under that pricing plan, with the reforms allowing the postie to “turbocharge” its parcels business.

“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,” he said.

Many letters will be delivered slower under the modernisation scheme, however, with the Post Office Agents Association explaining that there will be a move towards second-day service.

“In this new delivery model, PDOs deliver parcels, Express Post and Priority letters to all properties in their round each day, but only deliver standard letters to half of their round each day,” the POAAL said.

Alexander said the new rules do open the door for Australia Post to charge commercial rates for some mail services, which will mostly affect businesses that use letters to send advertising and required written communications for customers.

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