Australia Post has introduced a ‘two-speed’ letters service with Priority and Regular deliveries and raised prices after the government approved plans to reform the loss-making mail business to maintain a sustainable mail service for all Australian citizens.
With the Regular service, delivery of letters will take two days longer than with the Priority service which offers delivery within 1-4 business days depending on destination. Australia Post stressed that the two-speed letters service “is in line with what has been available to business customers since June 2014.”
As part of the price increases approved by the Australian Competition and Consumer Commission (ACCC), the postal operator has raised the basic postage rate (BPR) from $0.70 to $1.00 to better reflect the total cost of sending a letter. The basic stamp price applies to the Regular service while the Priority service is a commercial product.
To send a letter at the faster Priority speed, customers will need to purchase a Priority label from their local post office or the Australia Post online shop and place it next to the stamp. A Priority label costs $0.50.
Concession card holders will continue to be offered a concession rate stamp, which will be frozen at $0.60 and available to 5.7 million eligible Australians. In addition, all Australians will continue to have access to a $0.65 Christmas or Seasonal Greeting stamp, the price of which will also be frozen. Concession and Christmas stamp mail account for almost half of all the letters sent by consumers while 97% of all mail is sent by business and government.
Australia Post said in a statement: “The increase to the BPR is only the fifth in 23 years. At $1, the BPR will remain one of the lowest in the developed world.”
Ahmed Fahour, Australia Post's Managing Director and Group CEO, said in March 2015 when the country’s government approved the postal reform: “Even if the regular stamp price reflected the current total cost of $1 it would remain among the cheapest in the OECD and significantly below comparable countries like Canada, UK and Germany. The reformed letters service will remain among the cheapest in the developed world while maintaining one of the highest service standards.”
The postal operator explained last year that the measures will help to continue delivering five days a week to 98% of addresses and protect its national network of 4,400 post offices, particularly Licensed Post Offices (LPOs) in regional and remote communities.
In September 2015, Australia Post posted a full-year loss after tax of $222 million ($352 million before tax), driven by the continued decline in letter volumes which more than outweighed parcel growth. Addressed letter volumes fell by 7.3%, with ordinary stamped letters falling by 10.3%, as Australians continue to switch to digital alternatives, with losses in the mail business growing to $381 million. Group revenue remained stable at $6.37 billion, with parcels revenue up 3.6% to $3.21 billion, for the first time delivering more than half of total revenue.
