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Australia to end daily letter delivery as postal service pivots to parcels

Australia to end daily letter delivery as postal service pivots to parcels
epa09585248 Signage on the exterior of Australia Post's Sunshine West Parcel Delivery Centre, in Melbourne, Victoria, Australia, 16 November 2021. EPA-EFE/JAMES ROSS AUSTRALIA AND NEW ZEALAND OUT

SYDNEY, Dec 6 (Reuters) - Australia Post will soon end daily letter deliveries as part of a series of postal reforms announced on Wednesday designed to modernise the government-owned postal service and help it turn a profit.

By Lewis Jackson

Letters will only be delivered every second business day for 98% of locations, although parcel delivery would continue daily. Australia Post will also have an extra day to deliver regular mail.

The changes announced jointly by the communications and finance ministers, have been trialled and will roll out over the next 12 months along with other reforms like increasing the number of parcel collection points.

Australia Post CEO Paul Graham said the reforms recognised the “true cost” of mail delivery and would help the service build a more sustainable business focused on parcels.

“As eCommerce continues to boom and fewer and fewer Australians send letters, the changes to letters frequency announced today will free up our posties to also focus on parcels and packages,” Graham said in a statement.

Letter deliveries have fallen by two-thirds since 2008 alongside a massive e-commerce fuelled boom in package delivery. Australia Post delivered half a billion parcels last financial year, or roughly 20 per person.

But it lost A$200 million ($131.70 million) before tax for the 2023 financial year ended in June, only its second time in the red since 1989, and warned of future losses without reforms.

Losses in the letter business rose 50% to A$384 million.

Australia Post is government-owned but self-funded and required to deliver a financial return.

A trial found the proposed reforms let workers carry up to 20% more parcels and deliver to 10% more locations.

The changes will also allow Australia Post to manage priority mail, roughly 8% of all letter traffic, differently to “deliver services at a more commercial rate,” the joint ministerial statement said.

Australia Post has applied to the competition regulator to increase the basic letter postage rate to A$1.50 from A$1.20 from early near year.

(Reporting by Lewis Jackson; Editing by Jamie Freed)

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