This sequencing is undertaken once the letters arrive at the delivery centres. Postal delivery officers manually sequence the letters within their rounds, and include large letters and small parcels, prior to the commencement of their delivery rounds. Due to the need to start delivery rounds before around 10am, the manual sequencing starts during a period that attracts penalty rates. As an example of the time constraints, for the approximately 48% of letters that are delivered in the same city or town, letters collected at 6pm on a given day must be processed and transported to the relevant delivery centre by around 6am the following morning, as shown below: Culler facer canceller machine (CFC) Multi-Line Optical Character Reader machine (MLOCR) Barcode Sorter machine (BCS) The costs of operating Australia Post’s letters network are increasing as the number of delivery points in Australia grows. There are currently 11.3 million delivery points in Australia with the number increasing by around 150,000 per annum. Australia Post has noted that “while addressed letter volumes in 2012-13 were at around the same level as 1994-95, by comparison, the delivery footprint has increased by circa 46%”. Table 2 below shows the increasing number of delivery points since 2005. Table 2: Delivery points – increase since 2005 Prices surveillance on the Basic Postage Rate The ACCC’s prices surveillance function is intended to promote efficient pricing and consumer protection where there is reduced competition. Given the complexity of the issues considered by the ACCC and the need to consult with stakeholders, prices surveillance processes can be (up to six months) and reduce Australia Post’s flexibility to price its products and services appropriately. However, in a market where there is increased competition from digital alternatives, and Australia Post’s letters business is running at a loss, the prices surveillance framework is having the unintended consequence of restricting Australia Post’s ability to quickly respond to competitive pressures and the loss of market share by varying the prices it charges for its services. Measures undertaken to address the challenges In order to maintain its financial position in the face of declining letter volumes, Australia Post has focussed on reducing labour costs, which are the primary driver of its fixed costs. Australia Post has negotiated an enterprise agreement which has generated productivity improvements and reduced staff levels. Australia Post has also focused on reducing costs through a combination of automation, process redesign and improvements to network systems.
This sequencing is undertaken once the letters arrive at the delivery centres. Postal delivery officers manually sequence the letters within their rounds, and include large letters and small parcels, prior to the commencement of their delivery rounds. Due to the need to start delivery rounds before around 10am, the manual sequencing starts during a period that attracts penalty rates. As an example of the time constraints, for the approximately 48% of letters that are delivered in the same city or town, letters collected at 6pm on a given day must be processed and transported to the relevant delivery centre by around 6am the following morning, as shown below: Culler facer canceller machine (CFC) Multi-Line Optical Character Reader machine (MLOCR) Barcode Sorter machine (BCS) The costs of operating Australia Post’s letters network are increasing as the number of delivery points in Australia grows. There are currently 11.3 million delivery points in Australia with the number increasing by around 150,000 per annum. Australia Post has noted that “while addressed letter volumes in 2012-13 were at around the same level as 1994-95, by comparison, the delivery footprint has increased by circa 46%”. Table 2 below shows the increasing number of delivery points since 2005. Table 2: Delivery points – increase since 2005 Prices surveillance on the Basic Postage Rate The ACCC’s prices surveillance function is intended to promote efficient pricing and consumer protection where there is reduced competition. Given the complexity of the issues considered by the ACCC and the need to consult with stakeholders, prices surveillance processes can be (up to six months) and reduce Australia Post’s flexibility to price its products and services appropriately. However, in a market where there is increased competition from digital alternatives, and Australia Post’s letters business is running at a loss, the prices surveillance framework is having the unintended consequence of restricting Australia Post’s ability to quickly respond to competitive pressures and the loss of market share by varying the prices it charges for its services. Measures undertaken to address the challenges In order to maintain its financial position in the face of declining letter volumes, Australia Post has focussed on reducing labour costs, which are the primary driver of its fixed costs. Australia Post has negotiated an enterprise agreement which has generated productivity improvements and reduced staff levels. Australia Post has also focused on reducing costs through a combination of automation, process redesign and improvements to network systems.