Ahmed Fahour, CEO of Australia Post, describes the relaunch of StarTrack Express as Blue Post StarTrack, while also outlining further change to come.
Last Friday, the American Chamber of Commerce in Australia hosted an industry lunch at which Australia Post CEO, Ahmed Fahour presented another glimpse into the ongoing evolution of Australia’s delivery landscape.
At the same time as rebranding a number of its services, Australia Post plans to extend its capabilities when it comes to fast parcel delivery services, while at the same time seeking to contain the ongoing losses of its letters business. At no point did Fahour address current speculation that Australia Post is to become fully privatised.
“Letter volumes peaked in Australia in 2008. And they have been falling, quite dramatically, ever since,” said Fahour. “In fact, over the past five years our letter volumes have fallen by about 5 percent annually and over the last two years have accelerated to eight percent, In total, we have seen a 30 percent reduction in delivered mail volume. That’s a billion fewer letters today than in 2008 – even with more delivery points!”
If this trend continues, Australia Post’s letters business may easily shed a further $1 billion annually over the next few years. Fahour makes it clear that the business must continue to develop new revenue lines in order to be sustainable.
“The only legitimate commercial response is to anticipate this shift in community behaviour to digital channels and adapt accordingly,” he said.
Fahour went on to describe Australia Post’s plans as falling into three key areas: to provide e-commerce delivery, supply chain and solutions to businesses; to enable consumers to effectively manage deliveries and other important tasks; and to assist government and large corporations to delivery trusted services to their customers online and offline.
“We are in the midst of spending $600m upgrading our parcel-sorting technology and doubling the capacity our parcel network to handle growth for the next 10 years.”
Further, Fahour later went on to announce that Australia Post plans to extend its trading hours to include weekends from this Christmas onwards, which will include Saturday deliveries for Express Post and Express Letters.
Of further interest are the mooted changes to the StarTrack business, which Australia Post acquired from its former joint-venture partner, Qantas, last year. Not only has StarTrack Express been renamed to Blue Post StarTrack, Australia Post’s Messenger Post Couriers will henceforth be StarTrack Couriers, as the operations of these businesses become merged.
“The integration of StarTrack means that we now have the leading logistics and e-commerce proposition in the market for both Australian businesses and consumers,” Fahour said. “There is no other logistics business that can match our network reach capabilities and products, our service standards or our e-commerce solutions for the integration of delivery and payments capabilities on business websites.”
For those businesses hoping to see some positive news regarding prices – or fearing the worst from another pricing update – unfortunately nothing has been announced on that front. However, given Australia Post’s clear indications that the fallout from its flagging letters business represents a clear and present threat to the company’s ongoing viability, we’re likely to see an ongoing period of adjustment to both services and prices for some time to come.
At the very least, Australia Post seems dedicated to taking part in the modern, digital economy.
“We believe we need to change today, while we are strong, so that this transition is done in an orderly way – and so we can protect the community‟s equity in our business. If we wait another 12 months it might be too late as the large losses from letters will overwhelm the organisation.”