Could this be the death of the letter? Australia Post warns of ‘unstoppable decline’ as customers issued urgent warning
- Average Australian household gets just three letters a fortnight
- It’s costing Australia Post more every year to deliver fewer letters
Australian households get just three letters a fortnight meaning drastic changes such as a doubling of prices and fewer deliveries are likely if Australia Post is to avoid huge losses.
The company said the ‘unstoppable decline’ in sending letters meant it was costing it more every year to deliver fewer and fewer letters.
Australia Post said it had experienced ‘significant structural headwinds’ for years and lost a record $189.7million from its letters business from July to December.
A surge in its parcels business during the Covid pandemic masked the underlying challenges of such losses as bills and bank statements increasingly moved online.
Though the cost of a basic stamp increased from $1.10 to $1.20 on January 3, it will only partially offset the substantial losses caused by a 5.7 per cent fall in letters sent.
Australian households get just three letters a fortnight and most of those are business letters such as bills. Pictured are a bunch of letters
Australia Post CEO Paul Graham said the company’s Post26 strategy is its plan to help address these issues.
‘Every year it’s costing Australia Post more to deliver fewer letters,’ he said.
‘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.’
Mr Graham said Australian households would be sending less than one letter per week by the end of the decade.
It also emerged that Australia Post paid $28million in bonuses to executives last financial year – $4.4million more than the profit is made in the second half of 2022.
That second half profit of $23.6million was down from an $199.8million surplus a year earlier, a massive 88.2 per cent fall.
As that period includes Christmas – traditionally a busy time for postal services – it is expected to report an overall loss by the end of the financial year on June 30.
Australia Post said the ‘unstoppable decline’ in sending letters means it’s costing it more every year to deliver fewer letters. Pictured is a postman on a motorbike in Brisbane
Letter writing (pictured) has become a lost art as digital communications take precedence
Mr Graham said changes needed to be made to help Australia Post.
‘Frequency (of letter delivery) is one thing we need to address, the average household receives just one and a half letters a week now,’ he told the Australian Financial Review.
During the pandemic, emergency measures saw the mail only delivered every second day and 2,000 posties became parcel delivery drivers, but that has ended as Covid restrictions eased.
Mr Graham said the feedback from customers is they don’t see the value of delivering mail five days a week.
‘Ninety-eight per cent of all mail is corporate mail, your bank statement, your interest rate letter, your electricity bill, those are moving rapidly to digital solutions,’ he said.
He said Australia Post is discussing the frequency of letter delivery and the price of stamps with the government, the postal union and other stakeholders.
Stamp prices in Australia are well below the average in comparable countries, meaning the price could more than double from the current $1.20 basic price.
Such a change would need backing from the federal parliament and approval by the competition regulator.
