Australia Post will take ‘some time’ to adapt to delivering more parcels from online shopping

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Australia Post will take 'some time' to adapt to delivering more parcels from online shopping

At the beginning of the pandemic, the federal government granted Australia Post temporary regulatory relief, which allowed it to lower its performance standards. With the temporary regulatory relief set to expire at the end of June, acting CEO Rodney Boys told Senate Estimates it would take “some time” to design a new operational model as previous arrangements no longer work due to the decline in letters being delivered.

Boys explained the country’s postal service now sends 32% more parcels when compared to pre-COVID times, which he attributed to an additional 1 million Australian households shopping online each month.

At the same time, letter volumes fell by 13.6% which amounted to, on average, around 1 million less letters being sent daily when compared to pre-COVID times.

With the temporary regulatory relief, Australia Post has temporarily stopped its priority letters service, transitioned to an alternate-day delivery model, and been given more time to deliver intrastate letters. At the same time, to address the changing package volume, the postal service has reassigned 2,000 posties from sending letters to sending parcels instead.

But as Australia Post prepares to revert back to the original performance standards, Boys told Senate Estimates he was unable to give a timeline on when a new operating model would be created nor the extent to which Australia Post would be ready to revert back to the original standards.

“I don’t understand why you haven’t prepared to revert back in time with the regulation, and, with respect, the regulation did have a disallowance motion so Parliament has effectively given you this time period. They didn’t give you any longer than that,” Labor Senator Nita Green said in response. 

“We were told as parliamentarians that you had this period of time for temporary relief that would be only a temporary time, but it looks like it’s going to be longer than that.”

When Australia Post was preparing for the temporary regulatory relief, the Department of Finance paid around AU$600,000 to Boston Consulting Group to give advice to Australia Post with respect to the relief.

“My recollection is what they were doing was giving us advice, with respect to the temporary regulatory relief that then was incorporated or assisted with the review of the midterm review the temporary regulatory relief,” an Australia Post representative told Senate Estimates.

When asked about this advice, the representative was unable to explain to senators what was being evaluated by Boston Consulting Group and took questions about the advice on notice.

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