Australia Post is looking at a new way to boost the profitability of its already booming parcels service by charging customers for parcels that remain uncollected after five days.
While the government-owned business has been losing money on its mail service, a boom in online shopping means that more than half the company’s revenue – around $3.2 billion – comes from the parcels side, yet Australia Post had its first loss in more than 30 years last year.
After increasing the price of a letter to $1 at the start of 2016, yesterday, Australia Post announced plans to introduce new charges of up to $9 to hold uncollected parcels for up to 30 days before returning them.
While the changes, due to begin on August 1 will give customers an extra 20 days to collect a parcel beyond the current 10 days before it’s returned, non-MyPost customers will be charged $3 per parcel if it’s collected after 6-10 business days, $6 between 11-15 and $9 for 16-30 days. MyPost customers will get a 10 day grace period, but then pay $3 per parcel from 11-15 business days, $6 for 16-30. They can also elect to have a parcel safe-dropped at home, or sent directly to an alternate location such as a parcel locker, or their closest Post Office.
The company says that after flagging the changes with more than 1500 customers on the proposed changes, they found people want to avoid parcels being returned to sender and would go out of their way to pick it up sooner to avoid the fee.
Australia Post says around 92% of parcels are collected within five days.
“We believe this service will help the small amount of customers who can’t collect their parcel straight away,” an Australia Post spokesperson said.
Greg Rayner, national secretary of the union representing postal workers claimed the company was relying on “underpaid and overworked external contractors” to deliver parcels and reliability was a problem.
“Post needs to get their own house in order and make sure that their contractors are paid fairly and the delivery system is adequately resourced before they start punishing customers for holding parcels when they have little control over being able to get to a post office during restrictive opening hours,” he said.
News of the changes comes as Qantas and Australia Post announced a new exclusive domestic air-freighter network under its Startrack brand.
Australia Post will have six freighter aircraft with StarTrack livery under a five-year deal with Qantas, with five coming from Qantas Freight’s existing fleet, plus a Boeing 737-400 coming online shortly.
The service launches in July and Australia Post CEO Ahmed Fahour, said the dedicated domestic network was a “milestone in delivering a world-class parcels, freight and logistics network that meets the ecommerce needs of Australian businesses and consumers and connects them to global opportunities”.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.