INDUSTRY FRUSTRATED WITH AUSPOST

Following Australia Post’s decision to reduce its daily letter service to every second day in order to recuperate financial losses, the print industry has expressed its disappointment.

The Visual Media Association (VMA) responded by clarifying that it had not opposed reduced frequency provided a commercially viable priority service was available, and that Business Mail pricing was stabilised.

It called on Australia Post to provide Business Mail pricing with longer forecasts, rather than annual ‘consultation’ windows and fore-concluded price increases that, it says, do not align with customer budgets, nor align with planning to essential or marketing communication schedules.

Kellie Northwood, CEO of the VMA said, “I am disappointed in the commentary across the mainstream media that is talking down the valuable Letters channel. ‘Snail Mail’, ‘unstoppable declines’ as well as other comments are challenging for our industry to read and we need to understand these comments do not speak to Business Mail, which has a strong future.”

AusPost says that demand for letters continues to fall, and so daily deliveries are not viable. Letter volumes have reportedly reduced by two thirds since their peak in 2008, while parcel volumes have boomed. Australia Post said it delivered around half a billion parcels in 2022-23 and the average Australian household now receives just over two addressed letters per week.

Northwood responded to this by pointing out that figures reporting 62 per cent decline since 2018 do not call out the specificity of Business Mail, which has endured, and recovered, with mail declines moving from 11.18 per cent YOY decline in FY16-FY17 to a stabilising 6.1 per cent decline in FY22-FY23, despite significant price increases well above CPI.

“We have seen Presort volumes across insurance, telco and finance increase in volume in the past YOY reports, and Promo Post is a strong performer with only one quarter in the negative and customers are reporting that there is significant digital saturation in play across essential communication,” she said.

Print marketing expert Malcolm Auld told Print21 he believes the changes are very disappointing for the print industry. “Australia Post’s decision to reduce mail delivery days is a sad reflection of seriously flawed strategic direction by its management,” he said. 

“When the digital media era started, instead of promoting the benefits of mail for marketing, the management and unions allowed the demise of essential mail, despite the clear evidence showing that mailed invoices and statements perform better in terms of percentage of on-time payments, than emailed or digital ones,” he added, highlighting that the changes will cause “major job losses in the print and mailhouse industries, and these jobs won’t return”.

Auld said that AusPost claims it is supporting the internet as a delivery service. “Well, if it supported marketers with mail, they would get more online sales and would benefit further,” he commented.

Auld is of the firm conviction that "mail is still the best lead generation media for B2B marketing".

The proposed new rules would include allowing AusPost to charge a commercial rate for priority mail, which accounts for about 8 per cent of addressed letters.

The ACCC is currently assessing Australia Post’s draft notification to increase the basic postage rate from $1.20 to $1.50 in early 2024. Prices for concession card holders will remain at 60 cents, and the price of Christmas stamps will remain unchanged at 65 cents.

The changes are expected to be rolled out over the next 12-18 months.

Paul Graham, CEO and managing director, Australia Post said, “Given the significant decline in our letters business, we’ve worked closely with our team members and the Communication Workers Union (CWU) to trial new ways to deliver that are better for our Posties. 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.

“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.”