Australia Post has started 2015 with a punch to printers as it raises its bulk mail prices by another seven per cent, effective next month, in a bid to offset a $328m loss in its letters division last year. Printers and mailhouses have widely condemned Australia Post’s planned price hikes, saying it will affect business as it may drive advertisers further away from direct mail. Australia post will raise prices on average of 5.5 per cent across all bulk mail products however, small sized presort mail, which makes up about 80 per cent of bulk mail volumes, will rise by 7.3 per cent. The monopoly mail carrier says the price changes will affect products including selected domestic parcel services, selected business bulk mail services, mail redirection, mail hold, after hours transport of collection, and selected packaging products. It says the price hikes, which follow rises of more than 13 per cent just 11 months ago, are in response to the company’s losses of $328m on letters last financial year and delivering less mail to more locations every year. Australia Post says it is not all bad news as it proposes to introduce a three per cent discount for promotional mail batches of more than 4000 items. Yet small barcode direct tray mail delivery under 125g, which comprises up to 90 per cent of presort volumes and is the key product for printers and mailhouses will rise by 7.3 per cent for same state and 7.1 per cent for interstate on regular delivery, and 6.8 and 6.5 for priority.
The two-speed system of priority and regular delivery introduced last year sees higher prices for better service – one business day for same state and four for interstate, verses 2-3 and 5-6 on regular. Small priority mail will now cost 65.2c to send interstate, while regular will cost 57.6c. Same state is just over 2c less. Australia Post says the product details are being finalised through an industry consultation process with the intention to launch before the end of the financial year. However, its argues that price hikes are necessary because of declining addressed mail volumes, which fell by 4.5 per cent last financial year and 8.5 per cent in the past four months. The company says while the items of mail per delivery fell to 1.13 a day, delivery points grew from 120,000 last year to 11.3 million, and are rising to an average of 130,000 a year. It says the mail volumes have fallen by 1 billion since FY2008 but there are some 1.4 billion more delivery points, which is the catalyst for the number of letters delivered to each point per day to fall by more than 31 per cent. Cost cuttings of 2014 saved Australia Post some $46m, which it hopes to achieve again, however at the current rates, losses are set soar to $1bn in the near future. Australia Post spokeswoman says the company knows that price increases are never easy for their customers and ‘we take decision to implement these cost recovery measures very seriously’. “These price increases will allow us to partially offset the growing losses that we are seeing in our letters business and the increasing operating costs to deliver our other products and services.”
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