COVID-19 highlights the future of Australia Post

While the impacts of COVID-19 have resulted in countless Australian businesses reassessing their futures, Australia Post has been facing the same dilemma long before late March.

In April, the Morrison government approved temporary amendments to Australia Post’s performance standards to assist them in the midst of the ongoing global pandemic.

Australia Post said that this regulatory relief will allow it to strengthen its focus on the services that are experiencing an accelerated increase in demand.

This surge in demand is attributable to non-letter services and this has been supported by an increase in e-commerce delivery since the arrival of COVID-19 in Australia.

However, the increased demand for non-letter services in 2020 forms part of a developing trend rather than an anomaly.

In 2018, Australia Post’s non-letter services combined for $156 million in profit but just one year later this number increased dramatically to $258.8 million.

However, despite this positive trend, the numbers over the same period impacted by the declining use of letters are even more stark.

In terms of letters, Australia Post announced a loss of $16.9 million in the 2018 financial year but in 2019 this number ballooned to a loss of $191.7 million and led to a substantial reduction in net profit on the year.

The Australian Postal Corporation (Performance Standards) Amendment Regulations 2020 were approved by the Federal Government to essentially allow the prioritisation of parcel delivery in a period where e-commerce has become more popular than ever before.

Since September 2015, online retail turnover in Australia has increased steadily with the Christmas period typically representing an annual peak in turnover.

Turnover from domestic online retail sales in September 2015 was estimated to be $794.6 million but in December of 2019, this number was an estimated $2.3 billion.

2020 began with a typical fall in online retail turnover but by March, with the introduction of COVID-19 restrictions in Australia, a significant increase in online retail turnover occurred.

In February 2020, online retail turnover was estimated to be approximately $1.67 billion but in June this figure had increased to a figure just shy of $2.77 billion.

The approved amendments to Australia Post’s performance standards will remain until they are reviewed in June 2021 but the prioritisation of non-letter services in recent times represents the way forward.

The increasing demand for e-commerce delivery illustrates the changing postal service landscape and by pivoting away from letters and instead targeting growth in parcel delivery, Australia Post will persevere through one of the most economically challenging periods in its 211-year existence.

(Featured Image: Australia Post’s post boxes have been a permanent fixture of suburban Australian streets since 1831. Is that about to change? Shot by BRIAN COSTELLOE)

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