Australian national courier pivots on strategy

Australian national courier, Australia Post, has reported a dip in profitability due to an ongoing decline in letter volumes.

The news follows the release of the company’s latest financial results with a group revenue of $4.69 billion, down 2.4 per cent on the same period last year (1H 2022).

Group profit before tax was $23.6 million, down 88.2 per cent from $199.8 million in the first half of 2022.

Letters revenue for the reported period was $881.9 million, down 5.7 per cent.

Meanwhile, letters losses reportedly increased 171.5 per cent to $189.7 million compared to 1H 2022.

Parcels and Services revenue was $3.8 billion, down 1.6 per cent.

The Australian national courier has invested $208.2 million into its business including new parcel facilities, fleet and technology.

A new operating model for the company’s corporate support office is being introduced to streamline operations.

This move is expected to help the Australian national courier respond to financial pressures.

Australia Post Group CEO and Managing Director Paul Graham said that growing headwinds were impacting the performance of the business.

“For more than a decade, Australia Post has been flagging concerns about the long-term viability of the business as it currently operates,” he said.

“During the COVID-19 lockdowns we benefitted from a considerable boost to our parcels business, which has now abated and revealed the unsustainable nature of the status quo. Our Post26 strategy is our plan to help address these issues.

“Every year it’s costing Australia Post more to deliver fewer letters. We know letters are in an unstoppable decline, thanks largely to digital communications, yet letter costs are rising due to the increasing number of delivery points we service every day. This all contributes to increased losses and is a global issue facing all postal services. We expect annual volumes will decline further, with Australian households receiving less than one letter per week by the end of the decade.

“Our team members across Australia are committed to providing essential services nationally, particularly during our busy peak period, which was also affected by severe weather events and disruptions to infrastructure that had significant cost impacts for the business.

“Despite the challenging conditions, we were able to deliver a record number of parcels over the cyber sales and Christmas period. This aligns with the current retail trend of consumers holding off and choosing to buy during sales periods. While Australians continue to buy online, following the end of the COVID-19 lockdowns, we are seeing parcels growth moderate.

“I’m proud of the way the team remains focused on our customers and their communities. The customer satisfaction results measured by NPS shows an uplift across the year in both consumer and business satisfaction and reinforces Australia Post as one of Australia’s most trusted brands. I want to thank all our team members for their commitment and their focus on team safety, and their resilience in the face of disruptions.”

In other news, Federal Member for Wright, Scott Buchholz, has slammed the Grattan Institute’s recent proposal to the Federal Government to remove the Fuel Tax Credits for the heavy vehicle sector.

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