Australia Post rival Sendle is allowed to access “last mile infrastructure” in the US and Britain but it has been barred from doing so in Australia,as Australia Post has exclusive relationships with the nation’s post offices.
Sendle co-founder James Chin Moody:“In America,we can partner with the USPS,and that’s amazing.”Paul Harris
Licensee post offices account for about 2800 of Australia’s 4200 post offices nationally. They are operated by small business owners rather than Australia Post itself. Many face the prospect of declining income and in some cases potential closure,a fate that Sendle chief executive James Chin Moody says could be avoided with more competition and open access to last mile infrastructure.
“Last mile” is the industry term referring to the last stretch of a parcel delivery,including the sorting and delivery infrastructure such as post office boxes and parcel lockers used to pick up and deliver parcels.
Sendle is calling for the opening up of Australia Post’s PO box network to all courier companies,and for consideration of a “work share” model in which private companies such as Sendle would take on some of Australia Post’s workload in exchange for reduced rates.
“We are a fierce competitor to Australia Post in Australia,and they have more than 85 per cent market share in the small business world,so they are a frankly a functional monopoly,” Chin Moody said.
“In America,we can partner with the USPS,and that’s amazing. It helps the local post offices,it helps us,and it helps small businesses. And we think this is in the best interests of the nation,to follow the US or UK model.
“What we want is to be able to have a commercial relationship with an independent community post office. And right now we can’t,because they are bound in a monopolistic contract with Australia Post. It’s that simple.”
Former Australia Post CEO Christine Holgate is now CEO of Team Global Express.Peter Rae
Chin Moody’s calls echo those of former Australia Post boss Christine Holgate,who now leads private delivery firm Team Global Express,formerly known as Toll. Holgate last year called for the government-owned business to open up last mile infrastructure to third-party operators. FedEx has made similar submissions.
“The post offices want it;the posties want to keep their jobs so they’re not opposed to carrying more;the consumers definitely want it;businesses want it. It will encourage rural and regional economic development,so they want it. There really aren’t any losers,” Holgate said last year.
Chin Moody said that while customers in cities could have their parcels dropped at nearby locations operated by third-party companies,many regional and rural customers did not have that ability as many towns had just one post office.
Australia is falling further behind other countries that already embrace open access models,according to the executive,who wants Australia Post to shift to being a platform like the NBN and allow companies to operate on top of its infrastructure.
“That’s how advanced economies are thinking about their postal services,” he said.
”There are over 2000 of these independent community post offices,owned by mums and dads. They’re small business owners themselves. A lot of them are doing it tough and they’re the heart of the community. Opening it up would be good for them,would be good for regional areas because it would reduce the cost of e-commerce and it’s good for national small businesses who sometimes can’t afford to send regionally.
“And frankly,it would be good for Australia Post. If you think about the public purpose of Australia Post,it’s not to try to slam all the competitors to the ground,it should be a platform for the heart of the nation’s delivery structure. And the independent community post offices are also calling for this.“
Sendle,founded in 2014,offers door-to-door parcel delivery and its primary customer base is the nation’s 2.5 million small businesses. The company is no stranger to public stoushes with Australia Post:it won a legal battle in 2017 over its slogan “Post without the office”.
The community post offices are represented by industry lobby group Licensed Post Office Group,which is also calling on the government to consider partial deregulation to allow community post offices to enter commercial partnerships with companies like Sendle.
The group’s chairman,Scott Etherington,has been the licensee of Gulgong Community Post Office,in the NSW Central West since 2016. He said post offices were often important one-stop shops for regional communities but that they had not fully enjoyed the benefits of the e-commerce boom of the past few years.
“Everyone has been crying out for some proper competition in this retail space and Australia Post can do that,” he said. “We want to be able to provide these services to our communities. We don’t want to be forgotten and left withering on the vine.”
In a letter to the Department of Infrastructure,Transport,Regional Development,Communications and the Arts,Sendle says opening up access to last mile infrastructure can deliver a $1.5 billion net benefit over 10 years to rural and regional Australia.
Under Australia’s regulatory framework,Australia Post is required to maintain 4000 post offices nationwide and 2500 in regional and rural areas.Nine
In March,Australia Post announced a half-year profit of $33.6 million,amid new regulations that mean posties now deliver priority mail,express letters and parcels every day,and standard letters and unaddressed mail every second day. The company is executing its modernisation strategy,dubbed Post26.
An Australia Post spokesperson said the government-owned company had rejected access requests to its last mile delivery infrastructure because they were “uncommercial for the Australia Post network.”
It is unclear what courier companies like Sendle might pay for access to the last mile infrastructure.
“Australia Post is focused on the financial security and stability of its LPO network and Australia Post’s network as a whole,” the spokeswoman said.
“Australia Post’s network is already open to competitors on an ‘end-to-end’ basis for those prepared to pay an appropriate commercial rate. A number of Australia Post’s competitors already utilise our network in this way,as we do with other delivery providers. Australia Post processes approximately 72 million parcels annually for its competitors.
“For competitors who do not wish to use Australia Post’s network,there are a range of private-sector last mile delivery service providers they can access,including over 3000 third-party pick-up and drop-off points that utilise businesses such as newsagents,petrol stations and convenience stores nationally.“
When previously asked about opportunities for opening access to licensee post offices,Communications Minister Michelle Rowland said she “would expect that Australia Post would consider negotiating any appropriate commercial arrangements that are put before it.”
Rowland told this masthead the government supported the current approach.
“The government appreciates engagement with stakeholders and welcomes their views. However,our focus remains on implementing our modernisation reforms to ensure Australians are serviced by a modern,sustainable postal service,” she said.
“Changes to the company’s post office network are an operational matter for Australia Post. The government expects that any closures that are operationally necessary will be done in consultation with affected communities and stakeholders”.
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