Xvi) Australian Post

It was a government-owned (Commonwealth of Australia) but self-funded corporation whose traditional role was delivery of letters and parcels.

It celebrated its 200th anniversary in 2009.

In 1901 the different colonial mail postal systems were merged into the Postmaster-General's Department (PMG). They were also responsible for telegram and domestic telephone operations.

In 1967 the first large-scale mechanical mail sorting system was introduced and coincided with the introduction of the current system of 4 digit postcodes

In 1975 the Australian Postal Commission (trading as Australia Post) was established and its core business was around providing postal services including telegrams; it also developed limited non-core activities such as selling stationery, handling payment of bills like utilities, council rates, telephone, etc, handling some banking facilities like money transfers, savings bank deposits and withdrawals, etc

Since the late 1990s, Australia Post has broadened its product and service range and invested in major technology-based infrastructure programs plus changed its business model to a more franchise-orientated organisation. It operates in 3 core areas, ie

i) letters and associated services

ii) retail merchandise and agency services

iii) parcels and logistics

It offers delivery services (normal mail delivery as well as express courier), retail products, financial services (including insurance, passports, etc), direct marketing and database management services.

It also has a number of subsidiaries and joint ventures including a joint-venture in China established in 2005.

It has community service obligations, ie to provide an accessible, affordable and reliable letter service to all Australians wherever they reside. The corporation reaches more than 10 m Australian addresses; operates 4,419 postal outlets; serves more than 1 m customers in postal outlets every day.

It has a monopoly on letters up to 250g as its competitors have to charge 4 times the basic postage rate. Otherwise all other goods and services sold by Australia Post are sold in a fully competitive market place.

In recent times, with the increase in buying on the Internet, its parcel delivery area, ie delivering items purchased on the Internet, is more profitable than its mail delivery activities. Its mail delivery services are losing hundreds of millions of dollars per year and it is delivering fewer letters, eg in 2012 it was delivering 1 billion fewer letters (30% less) than in 2007. On the other hand, over the same period its parcel and pick up delivery has grown by 24% but it faces fierce competition from the private sector.

It is proposed to separate the mail delivery into 2 categories: a premier 5-days-a-week service & a regular service that will be 1 to 2 days slower and cheaper. Also, the organisation aims to diversify its retail business by taking over the process of health payments for the government.

One of the challenges facing Australia Post is the competitive pressure from the private sector as most of its services are being, or can be, provided by the private sector, eg courier, office supplies, payment facilities, passport applications, gifts, etc

With its core business, ie letters, under threat, Australia Post has used digital commerce to re-invent itself.  Also, the Australian government, which owns Australia Post, has agreed to increase the price of stamps and to cut back delivery services.

Owing to e-commerce, its parcel business has significantly increased in size and profitability. On the other hand, Australia Post cannot relax

"...the pace of change and competition is so brutal, the moment you get to the top you look over your shoulder.  You've got to change and got to think rapidly...."
Ahmed Fahour as quoted by Joanna Gray 2016c

Thus Australia Post is developing a digital identity business, ie aiming to make its identity service an integral part of online transactions so that it can charge a fee every time identity verification is used

"...the new beta version of its service is gaining traction with banks and government agencies.  By speeding up identity verification, it can cut the cost of doing business and encourage more transactions. About half of all online transactions are started and not completed because of complication and delays in filling in identity information..."
Joanna Grey 2016c

It is also including block chain technology to store the identity data.

People are becoming more concerned about the data they give to online organisations.

Some of the lessons learnt by Australia Post include

i) Post People First (investing, supporting, motivating the workforce to do the best and to reach their potential to help customers interact with the company)

"...happy staff leads to happy customers which leads to happy community and shareholders..."
Joanna Gray 2016d

You don't need to start with the customer

"...don't start with the customer.  The customer clearly is really important, but what you do as a leadership team, you start to build a culture and a trust and a level of relationship with the workforce who are delivering the service and the product..."
Ahmed Fahour as quoted by Joanna Grey 2016d

NB the workforce were very unionised and 45% of the staff are over 50, ie in the twilight years of their careers

"...people are paramount in any organisation. How they treat customers and each other creates a culture that is crucial to the successful implementation of strategy...... dedication to service is deep in our workforce base. Who is the person innovating here?  It's your employee in a way that they interact with their customer, in the way they interact with the eco-system, the way they interact with their suppliers.  The way they interact with each other..."
Ahmed Fahour as quoted by Joanna Gray 2016d

Currently the is dominated by white Anglo-Saxon middle-aged men; there is a need for greater diversity.  Until several years ago there were no women in senior management, and only 19% of management positions were held by women. In mid 2016

"...33% of managers are women and 37% of senior management are women......20% of managers are from non-Anglo backgrounds..."
Ahmed Fahour as quoted by Joanna Gray 2016d

  ii) identify early the threats and opportunities like the Internet

As the parcel business is growing at around 8% annually, Australia Post is looking at using drones as delivery mechanisms. Other new businesses include digital identity and block chain (see above for more detail).  The aim is to

"...empower customers and citizens to own and control what they do with their data and their identity, and build another new steady income stream..."
Joanna Gray 2016d


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