Australia Post cannot be left to run down its postal services through price hikes as it ignores the need for greater efficiencies and pursues a digital mail strategy.
Printing Industries Association of Australia CEO Bill Healey, commenting on a report by Boston Consulting Group that predicts that Australia Post will lose $6 billion over the next decade, said that Post should not be left to its own devices to resolve its issues.
“These predictions will come true unless Post can bring together its stakeholders to be involved in a restructuring process,” he said.
“Mail is a primary form of communication affecting every person in Australia, several key industries and tens of thousands of employees.
“Post has a statutory monopoly and has the right to issue postage stamps. This right also provides it with significant responsibilities to the public and commercial sectors including implementing cost efficiencies to ensure this vital service is maintained.”
Mr Healey said Post’s operations had caused ‘significant concern’ since 2011 when Australian Competition and Consumer Commission (ACCC) prices surveillance was removed from Post. This allowed it to raise the price of its lucrative bulk mail sector without taking into account the value of efficiencies provided by bulk mail operators who do all the pre-sort work.
“Post can’t be allowed to price increase its way out of difficulty just because it has a monopoly. All this does is discourage use of mail by businesses and individuals which in turn drives down mail usage rates – the very issue Post has done and is now complaining about,” he said.
Mr Healy said that while digital technology has had an impact on letter service usage, direct mail was on the rebound because of its success as a primary communication medium – something Post’s own research had confirmed.
A consumer survey released by Australia Post in 2013 found that:
•85% of people are reading their mail on the day received;
•98% of people actually open their mail versus 20-25% for email;
•Bills and statements preferences - 42% mail, 31% email, 25% both mail and email, 2% neither. (Australia Post Consumer Survey Mail Findings, January 2013).
Mr Healey said that other research released in 2013 indicated that catalogues and flyers and personalised direct mail outranked email and social media as more effective channels for advertising. (Creating connections that matter: How Australians want to hear from brands, 2013).
“The success of the mail channel in a multi-channel communication world is heavily dependent on maintaining cost competitiveness with other delivery channels.
“Our view is that the full potential of this channel is being stifled because of the Post’s high cost structure.
“We have met with the Minister for Communications, Malcolm Turnbull, and have an undertaking from Post to consult with its stakeholders, but so far this has been very limited – and the clock is ticking.
“It is essential that any reforms are not implemented in isolation. There are much broader ramifications on the economy and on the sectors that work with Post to produce, prepare and ultimately help deliver mail in all its forms. Post needs to talk to engage these stakeholders if it is to be successful in running an efficient and viable mail service,” Mr Healey said.
Printing Industries Association of Australia
www.printnet.com.au
