this post was submitted on 31 Aug 2023
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37
Australia Post reports $200m annual loss, its first since 2015, amid push to close city branches (www.theguardian.com)
submitted 1 year ago by [email protected] to c/[email protected]
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[–] [email protected] 56 points 1 year ago (5 children)

There's a perspective problem here.

Australia Post doesn't make profits and losses, it provides services - and services have costs, not losses.
Expecting Australia Post to:
A) Deliver packages of international origin for free
B) To unprofitable remote/rural areas C) AND turn a profit like a business whilst D) For profit courier companies undercut them on profitable metro areas...

Well it's not going to work long term.
And post offices are more than just places to drop off a package you want delivered, lots of people use them as their local bank branch for necessary in person tasks - especially in the a fore mentioned rural areas.

Long story short, Australia Post should not have been privatised - it's an essential service and essential services are natural monopolies.

[–] [email protected] 8 points 1 year ago

I agree. The same for the health service. It's not a for profit business (or should not be). It is a service, that we spend our taxes on, it costs money and doesn't expect a return, except for better health outcomes.

[–] [email protected] 7 points 1 year ago* (last edited 1 year ago) (1 children)

As someone who has lived in rural Australia - they barely service anywhere outside of metro areas.

My brother lives just an hour from a major regional city (population 150k), on the outskirts of a relatively large town, only a five min drive to a large post office that serves tens of thousands of people. He still doesn't get mail delivery and has to pay for a PO Box.

In fact - the private couriers offer far better service for his address.

[–] [email protected] 14 points 1 year ago

I'm not denying your story, I lived in rural SA for a long time and saw the services get peeled away.
But I stand by my broader point of what should be the case, because it's certainly not what is.

[–] [email protected] 7 points 1 year ago (1 children)

Long story short, Australia Post should not have been privatised

I don't believe it has been privatised, though?

[–] [email protected] 4 points 1 year ago (1 children)

Deliver packages of international origin for free

Minor nitpick but I don't believe that's correct, they're part of the universal postal union where they set prices for other post companies to send into Australia.

I'm no post enthusiast though, so it might not be correct, that's just my understanding.

[–] [email protected] 2 points 1 year ago* (last edited 1 year ago) (1 children)

You've taught me something: https://en.wikipedia.org/wiki/Universal_Postal_Union

I can't find anywhere listing what we get in UPU fees for things coming into Australia from China, but I have recently ordered items for a few dollars which have not charged me for postage.

This is head torch, for 77c, that will be posted to me for free from China.
https://www.aliexpress.com/item/1005004823147597.html

This page lists the cheapest domestic package I can send from the Adelaide CBD to another Adelaide CBD address:
https://auspost.com.au/parcels-mail/calculate-postage-delivery-times/#/option/domestic/5000/5000
$10.60

Something doesn't add up here.
The minimum cost of anything coming out of China should be the UPU, completely ignoring handling, packaging and the item itself.

So either Aliexpress/China is subsidizing sending crap over here, or Australia Post is not getting the fees.

edit: Page 111 of the annual report: https://auspost.com.au/content/dam/auspost_corp/media/documents/2021-australia-post-annual-report.pdf
shows in 2020, Australia Post had a $4.3M Foreign exchange loss (net).
Which is honestly WAY better than I was expecting.

[–] [email protected] 3 points 1 year ago* (last edited 1 year ago) (1 children)

I can't find anywhere listing what we get in UPU fees for things coming into Australia from China

IIRC there's an excel spreadsheet somewhere with the pricing, but it's in the UPUs own currency or something like that.

The minimum cost of anything coming out of China should be the UPU.

I'm pretty sure 'free shipping' is just someone else eats the cost of shipping.

Edit:

Keeping in mind that I have no idea how to properly read this, as for the pricing it looks like in 2016 letter post from Hong Kong to Sydney was 0.538 SDR per KG, which was about AU$1.03 per KG.

Also the 77c for the head torch is a one time welcome deal, it shows up as $8.97 for me when logged in. So Aliexpress is probably just making a loss in hopes to make a profit from you later.

[–] [email protected] 2 points 1 year ago (1 children)

Keeping in mind that I have no idea how to properly read this, as for the pricing it looks like in 2016 letter post from Hong Kong to Sydney was 0.538 SDR per KG, which was about AU$1.03 per KG.

Interesting, so on face value, that works out to about $5 for a max 5kg package to arrive from China, whereas the same 5kg package within Australia would be $10.60.
Either Australia Post is taking a loss on every international package, or making a big profit on every national package.
Possibly both, where one offsets the other.
Whilst that would keep Australia Post solvent, it has externalities, simplistically it's a tarif on local manufactured product.
That cannot be a desirable outcome, especially as China already has a $/man hour advantage.

Also the 77c for the head torch is a one time welcome deal, it shows up as $8.97 for me when logged in. So Aliexpress is probably just making a loss in hopes to make a profit from you later.

Yeah, entirely possible. I haven't ordered one of these and don't intend to, but I just bought some screw drivers etc for ~ $8, which means they would have to make them for like $4 to turn a profit.

[–] [email protected] 2 points 1 year ago

Whilst that would keep Australia Post solvent, it has externalities, simplistically it’s a tarif on local manufactured product.

I've also heard that Amazon and similar 'mass senders' have special deals with postage companies, so most locally manufactured stuff would probably be fairly cheap to post, and they increase the price for normal people to send.

[–] [email protected] 3 points 1 year ago

It's a "self funded government business enterprise" which IMO means it's not private and it's still appropriate to say that it's turned a loss, given that the expectation is for it to be self-funded.

Post is an essential service but it's becoming less essential as time goes by. Perhaps it's essential that I have the capacity to receive letters, but I don't remember the last time I received a letter of any import.

Presently it's only a $200m loss or cost but the article discusses the forecast increases. I think it's natural and healthy to have a conversation about what service delivery can be altered to preserve benefits for the most people while reducing costs.

[–] [email protected] 16 points 1 year ago

Given such an essential service, I personally don't think it's important they are turning a profit. But is it run efficiently? I have no idea and this article doesn't really go into it. Had a quick search and found Australia Post's Efficiency of Delivering Reserved Letter Services. Haven't read it in full yet but first glance looks interesting.

And from some quick digging, I found that every year their revenue increases:

2022 $8864M
2021 $8208M
2020 $7499M
2019 $6990M
2018 $6877M

From their annual reports page: https://auspost.com.au/about-us/news-media/publications#annual

[–] [email protected] 13 points 1 year ago (1 children)

Didn't the Rolex watch lady have the place running super efficiently and that is why they fired her? Or is that all conspiracy nonsense?

[–] [email protected] 2 points 1 year ago* (last edited 1 year ago)

At the time, there was the Leppington Triangle land deal scandal in the media and the AusPost Cartier watch issue was blown out of proportion to become the new story.

[–] [email protected] 3 points 1 year ago

Public services aren’t suppose to make money, that’s what tax is for

Anyone argue otherwise meaning we should fire the whole parliament and I don’t believe they are ever profitable

[–] [email protected] 3 points 1 year ago

This is the best summary I could come up with:

After recording a profit before tax of just $23.6m for the six months to 31 December, the chief executive, Paul Graham, had warned in February that Australia Post will report a loss this year for the first time since 2015.

These include reducing letter frequency and closing some full-service post offices in metro areas while allowing more self-service options such as parcel lockers.

The communications minister, Michelle Rowland, said “Australia Post is a cherished national and publicly-owned institution” facing “significant structural headwinds”.

“The Albanese government is committed to supporting Australia Post modernise so that it can continue delivering the essential services consumers and small businesses rely on to stay connected,” she said.

The Liberal MP Keith Wolahan, who is campaigning against closures in the eastern suburbs of Melbourne, warned that “Australia Post is about more than letters and parcels”.

The independent senator David Pocock agreed that post offices serve a “very important purpose”, including providing banking services and getting photos for ID.

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