Australia Post to increase postage rates

Business groups have questioned a move by Australia Post to apply 1% fuel surcharge to all domestic and international parcels as well as international letters.

Peter Strong, chief executive of the Council of Small Business of Australia, says it’s worth asking whether domestic shipping is being made more expensive in order to account for international parcels, which are processed at different rates.

“Petrol has been going up, but it’s always been going up and down, so why all of a sudden is this an issue? That’s one question, but another is whether something else is going on,” Strong says.

“We’re buying a lot more from overseas, and many people now order products from overseas stores. Is it getting hard for Australia Post to maintain their profits due to the shipments being covered by international shipping rates?”

Strong questions whether domestic businesses are being charged higher rates because of this imbalance. He has previously agreed with the notion that online sales need to be charged GST.

But an Australia Post spokesperson says the surcharge was introduced “due to the rising cost of fuel in recent years.”

“Domestic online retail sales are predicted to grow from around $27 billion last year to almost $37 billion by 2013, with every item purchased online representing an opportunity to us.”

In a statement, executive general manager of postal services Jim Marshall said: “We think it’s a modest price increase that is fair and reasonable given the current pressures facing us.”

“Every year we are increasing our delivery points by 200,000 new addresses… At the same time, costs keep increasing and letter volumes continue to decline, with our letters business losing over $170 million last financial year.”

The Australian Competition and Consumer Commission also said last week it would not oppose a move from Australia Post to increase postage stamp prices for companies mailing in bulk.

The proposal will see Australia Post increase business mail services, including PreSort services, which provide discounts to wholesale customers who sort and barcode their mail before sending.

“At the same time, to encourage more efficient and flexible use of the postal network, Australia Post proposes to change its Off Peak PreSort letter services to make them more attractive to its bulk mail customers,” the company says.

But overall, Australia Post says postage services will rise for domestic businesses, although normal postage rates will remain the same.

“Beyond this price notification, the current approach to assessing prices, including the allocation of costs, needs to be re-examined given the environment of declining demand for traditional letter services,” ACCC chairman Graeme Samuel said in a statement last week.