Australia Post rejects criticism from licensees

Australia Post has rejected criticism from licensees that head office has underpaid and undercut its licensed stores, which account for two-thirds of its 4,400-strong network.

A national survey of more than 50 stores by ABC News Online showed more than 80% of licensees were willing to go on the record complaining they were underpaid to process parcels.

The respondents said the payments were not commensurate with the time and effort required to process parcels, which are an increasingly important part of the business.

Three-quarters of the respondents also reported to being undercut by Australia Post corporate, while half said their customers have been poached by head office.

According to the report, one licensee said she had experienced “bullying” from head office, while a former licensee said when he was trying to sell his store, corporate tried to force him to alter his contract so only official products could be stoked.

An Australia Post spokesperson this morning told SmartCompany that the company had “zero tolerance for bullying of any kind” and has a “clear process in place where issues can be resolved anonymously.”

“Over 60% of our network is Licensed Post Offices (LPOs) and Australia Post is committed to supporting them to run successful and sustainable businesses,” the spokesperson said.

“We have worked hard to improve our relationship with the industry association for licensees and mail contractors, POAAL, and work with them to overcome issues that face licensees.”

“We are proud of the progress we have made and will continue to work with POAAL and other industry bodies to continue to support our LPO network.”

Australia Post has the country’s largest retail network, with more than 4,400 postal outlets across the country, according to its website.

Licensed post offices, which might be run in conjunction with another business such as a newsagency, are mandated to sell and provide stamps, money orders, bill payment and banking, mail acceptance and processing. They earn income from fees and commissions for work performed, and receive a discount for Australia Post products.

Licensees are responsible for the premises, including location, fit-out, maintenance and operating costs. Australia Post says they may also be required to pay a point-of-sale technology fee.

Australia Post says benefits for licensees include the use of its well-established brand, access to management and business systems, ongoing professional training and support, and the option of point-of-sale and marketing programs.

The Government-owned company, once speculated to be mulling a banking network following the appointment of National Australia Bank executive Ahmed Fahour as its managing director and chief executive officer, reported a profit after income tax of $89.5 million for 2009-10, from $260.5 million the previous year.

In its report, Australia Post said declining letter volumes was “fundamentally changing” the economics of its business, with domestic letter volumes falling more than 4%.

On the bright side, revenue from domestic parcels increased by 4.2%, boosted by online shopping, and the company has flagged further focus on its parcels business.

“In 2009-10, for the fourth consecutive year, the parcels and logistics portfolio was the corporation’s primary profit generator,” it said.