Australia Post has announced its plans to invest AU$51.4m (US$40.5m) in payments over the next four years to support licensed post offices (LPO) and community postal agencies (CPA) across Australia.
The announcement follows an independent review by Partners in Performance (PiP) into the payment structure for LPOs, which was commissioned by Australia Post and the LPO Forum.
PiP examined two key areas the work effort to complete transactions to determine if the current payments were fair, including the total cost incurred by licensees to run their businesses; and how revenue compares to expenses at a store level.
As a result, several changes will be made including the implementation of a new small post office support plan to increase the minimum annual payment to nearly 1,000 smaller post offices, and an increase in the street carded parcel rate, which will benefit more than 1,800 LPOs.
Ahmed Fahour, managing director and group CEO, Australia Post, said, “We’ve been working closely with our licensees to identify how to best support them in the face of digitization, a significant challenge facing our traditional letters business.
“The new small post office support plan will immediately strengthen the future sustainability of 478 LPOs and 495 CPAs across rural and remote Australia. We have also more than doubled parcel handling payments with the street carded parcel rate increasing from AU$0.60 (US$0.47) to AU$1.60 (US$1.26).
“The survey concluded that for most transactions, licensees are being remunerated appropriately, however we recognize there are some areas where we can support our operators better. This includes increased payments for street carded parcels, where the work required to administer this service exceeds current payments.
“The findings of the PiP study show the complex nature of the challenges facing our LPOs. The study also showed the need for LPOs to have diverse revenue streams in light of declining mail volumes.
“Unless the planned changes to reform our letters service proceed, Australia Post will have no capacity to provide this form of sustainability payments to our important partners into the future.”
May 20, 2015