Small business LPOs confident in parcel services as Australia Post cuts letter deliveries

Small businesses running Licensed Post Offices are bracing for the end of Australia Post’s daily letter deliveries but have taken comfort in the extraordinary strength of their parcel-handling services.

On Wednesday, Communications Minister Michelle Rowland and Finance Minister Katy Gallagher announced Australia Post will move from letter deliveries every weekday to deliveries every second day.

The decision reflects the decline in letter volumes in the face of digital communication technology, and the explosion in Australia Post parcel delivery volumes over the past decade.

Freeing up that capacity will allow Australia Post to become more efficient in the years ahead, the parliamentarians said.

The change will roll out over the next 12 to 18 months, with consultations expected to open in the new year.

The 2,900 businesses operating as Licensed Post Offices (LPOs), particularly in regional Australia, will be on the front line of that change.

However, the persistent rise in parcel postage suggests they may stay resilient to the death of daily letter deliveries.

David Bruggeman is the owner of Wingello Village Store, located 90 minutes from Nowra in New South Wales.

The business operates as a general store, restaurant, and LPO, servicing around 400 households in the Wingello region.

As in other regional centres across Australia, the business serves as a delivery point for letters and parcels directed to locals.

“We’ve had the post office almost 15 years now, and when we first started, we might have had a full tray of letters” delivered each day, he said.

“Now we get between half a tray and one tray.”

By contrast, parcel delivery volumes have increased massively since the dawn of the COVID-19 pandemic.

“For parcels, we saw that last month was our fourth-largest month ever,” he said.

“We’re only a small village… we’ve already this month received about one parcel per household.”

Parcel deliveries to Wingello now require a truck instead of a van.

“Online shopping is so much easier now, and it’s cooler,” Bruggeman continued.

“And we’re out in the country, so it’s a long way to go to the shops.”

Letters going the way of horse and buggy carts

While younger Australians largely receive and pay their bills online, some older Australians are still more comfortable receiving bills via the post.

Bruggeman acknowledged that some may find it hard to adjust, but said the every-other-day delivery schedule would be unlikely to result in the late payment in and of itself.

“They might get their bill a day or two late, but most people don’t pay the bill the day they get it anyway,” he said.

He likened the transition from letters to the end of horse and buggy carts.

“Letters are going a very similar way,” he said.

Despite optimism, industry groups pay close attention

Although Wingello Village Store is comfortable in the face of the change, the industry group representing LPOs across Australia is paying close attention to the process.

Bob Chizzoniti, director of the Post Office Agents Association Limited (POAAL), welcomed the change to assure Australia Post’s financial sustainability.

However, he said POAAL will “scrutinise the proposed changes and make sure our members’ interests and concerns are heard”.

Of particular concern are businesses in regional Australia, which may serve as the one delivery point for parcels and letters alike.

“POAAL is seeking to better understand the potential impact of Australia Post’s new delivery model on LPOs in rural and remote areas,” particularly those that recruit contractors to deliver the mail to households, Chizzoniti said.

“There are also many LPOs that serve non-delivery areas, or areas that already have a two-day or three-day weekly mail delivery service.

“POAAL looks forward to discussing these aspects of letter delivery with Australia Post very soon.”