Australia Post’s new next-day delivery service, explained

Australia Post this week announced Australia Post Metro, its take on the next-day delivery model connecting businesses with their online shopping customers.

Here’s what businesses ought to know about the fresh development, how to access it, and the costs involved.

What is Australia Post Metro?

Australia Post Metro is a new next-day delivery service, offered by Australia Post itself, catering to retailers operating in the nation’s biggest metropolitan centres.

Why?

Online shopping makes up a massive portion of Australian consumer spending.

Paul Graham, Australia Post CEO and managing director, said the organisation expects one in every three dollars spent on Australian retail to be spent online within the next ten years.

At the same time, shoppers are becoming more accustomed to rapid parcel deliveries.

The arrival of Amazon to Australian shores, and the proliferation of one-day and same-day delivery options, appear to have recalibrated customer expectations.

About 68% of consumers say they would abandon an e-commerce shopping cart if they found delivery options to be too slow, according to Power Retail research.

Who does it cover?

Australia Post says “select retailers” across Sydney, Melbourne, and Brisbane have been offered access to the service.

That includes Myer, whose executive general manager of supply chain, Tony Carr, said the service is already proving beneficial ahead of the holiday shopping season.

“The Australia Post Metro service will be welcomed by Myer customers and will be particularly important to shoppers as we head into our busiest trading months of the year in the lead-up to Christmas,” Carr said.

More businesses and customers will be offered access “over the coming weeks and months,” Australia Post says.

Beyond those three metro centres, Australia Post says new metropolitan regions will be added as the system develops.

How much does it cost?

“The Australia Post Metro service pricing for consumers is set by the retailer dependent on their shopping cart strategy,” an Australia Post spokesperson told SmartCompany.

“Our aim is to enable retailers to provide as many customers with the ability to access the Australia Post Metro service.”

SmartCompany has contacted Australia Post regarding any minimum costs faced by retailers taking part in the system.

How does it work?

The system allows participating businesses to send off parcels well into the evening.

“The Australia Post Metro service offers the ability for retailers to lodge orders for delivery later (up to 8pm) to ensure optimised next-day delivery,” the Australia Post spokesperson said.

Australia Post has also reworked its back-end systems to identify and prioritise parcels sent through the Australia Post Metro service, Graham said.

At the same time, Graham said Australia Post is working with retailers themselves to ensure their distribution channels are prepared to prioritise Australia Post Metro orders.

What else should I know?

The announcement comes at a pivotal moment for Australia Post’s entire operating model, which has seen parcel deliveries spike and its traditional letter services slump over the past decade.

At the same time, surging fuel and labour costs have stretched delivery services of all kinds.

Australia Post raised the prices of some parcel delivery services in July, leading some small businesses to claim they’d be liable for an extra $5 per delivery.

Speaking to SmartCompany in June, Gary Starr, Australia Post’s Executive general manager of parcel, post and e-commerce services, said lifting prices was necessary given those looming cost pressures.

“Customers never like price increases from any supplier… but we’ve explained the inflationary pressures we’re seeing for our operational costs — particularly labor, energy and fuel,” he said.