Industry panic as AusPost bulk mail prices up

Australia Post will raise bulk mail prices by 2.8 to 5 per cent from October 5, as printers and mailhouses fear Post’s financial woes mean bigger rises are still to come.

The monopoly mail carrier confirmed the latest hikes to ProPrint, saying they are a CPI increase as part of its biannual price review, and says that more are slated for early 2016.

Small pre-sort mail, the category most used for bulk mail, will rise by 2.8-2.9 per cent for priority and 3.5-3.5 per cent for regular service, with the new promo post, used for direct mail campaigns, up 1.1-1.4 per cent.

Print post, used to send publications, is harder hit – priority is up nine per cent for under 125g and eight per cent for the rest, with regular small up eight per cent and the rest five per cent.

Post would not comment on rumoured big rises early next year, saying it has not yet notified the ACCC or customers, but there will be one.

[Related: More Australia Post news]

There is widespread industry concern that Australia Post will use its $500m mail losses and the upcoming 42 per cent stamp price increase from 70c to $1 as an excuse for huge bulk mail rises next year.

D&D Mailing Services director David Docherty fears Australia Post will seek to increase business mail by a comparable amount, which he says would devastate the industry.

Docherty cites a response to a letter he sent to Communications Minister Malcolm Turnbull, which says stamp price increases ‘will act as a ceiling for regular business mail services’.

“The ramifications of these increases will be catastrophic for all of the associated industries that support the production and development of the medium of mail – including mailing houses, printers, paper and machine manufacturers and numerous supporting agencies,” he says.

“To say we were disappointed in the response is an understatement and clearly it should have been marked, ‘Written and Authorised by Australia Post.’”

Docherty says the effects will put just as many people out of work as when Ford and Holden ceased manufacturing in Australia, with thousands of jobs likely to go in NSW and Victoria.

“Most of these workers are long term, baseline factory floor employees who will find it difficult to find work elsewhere,” he says.

He says his business, which employs 120 in Sydney and Melbourne with a turnover of $40m, would have to cut staff due to reduced work.

Other printers are also worried about the future of their businesses, with Anthony Maxwell, owner of Pre Press Pro, a small to medium sized regional mailhouse and print business, fearing his clients will get out of print if costs rise.

“I know for a fact that a 45 per cent increase postage cost would more than likely drive my major client to look elsewhere for his operations,” he says.

“This would in turn likely make my business unviable. This would affect the Local PO the regional distribution centre, my employees, Local and other major printers, envelope makers to name a few.”

[Related: More direct mail news]

Docherty says another knock-on effect will be a reduction of services to regional areas as falling volumes make delivery unviable.

“All of the Australian community will be affected. Regional areas will be the first to suffer because bulk mailers will cull their mailing lists due to the high price,” he says.

“Regional routes will become too costly and Australia Post will no longer distribute mail to the regional areas.

“We believe that Australia Post has used the drop in reserved letter volume to soften the Abbott government to deregulate letter prices, reduce community expectations about service levels while planning to aggressively expand into the businesses they really want to be in such as small parcels. 

“As a monopoly, it is unbelievable that an organisation can simply turn its back on the industries that have supported and developed the infrastructure and software capabilities that it enjoys without the threat of competition.”

Australia Post says there will be no change to its operations in rural and regional areas and it will maintain its obligation to deliver to 98 per cent of locations five days a week.

Fellow D&D director David Sykes has started a petition to Turnbull to put a stop to the proposed increases.

“Australia Post needs to be stopped in their tracks before they destroy the mailing and associated industries and cause massive job losses,” he says.

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