Competition intensifies for the Australian Post

The Australian Post is getting set for even more competition for parcel delivery. Officeworks, an office and stationery business, similar to US-based Staples and Office Depot, introduced its own parcel delivery service, Mailman. The service is available across Australia and, according to CNET publication, is driven out of Officework’ stores which allows for late night and weekend services. In addition, in metro delivery areas, close to Officeworks warehouses, Mailman will offer same-day and next-day delivery options.

Officeworks has partnered with Fastway Couriers which according to its website has 700 franchise partners across Australia providing domestic delivery services complete with track and trace capabilities. Undelivered parcels are expected to be sent to the nearest Officeworks store or Fastway depot for customer collection.

This could have an interesting impact on Australia Post. According to its latest earnings for the fiscal year ending June 30, 2014, parcel services were up 20.8% to AU$3.38bn. In order to maintain their momentum, they’ve introduced several services and expanded their operations across the country focusing on this division. Meanwhile, Australia Post’s bread and butter, letters, is on a steep downward trend with volumes down 8.2% for the first half of its fiscal year ending December 31, 2014. This downward trek of mail is a similar trend for post offices worldwide.

However, one advantage for Australia Post is that it has a much larger network across the country versus Officeworks’s new service. According to the Post Office Agents Association Limited (POAAL) there are over 150 Officeworks stores, a smaller network than that of Australia Post’s. But, The Australian newspaper noted that if the service expands into Coles and other Wesfarmers stores then it could have a network of over 1000 sites.

POAAL’s Ian Kerr recently spoke to Ti about Officeworks’ new service and said, “Australia Post has the broadest geographic reach of any delivery network in Australia. It also has the most extensive retail network for parcel drop-off and delivery. Growing competition in the domestic parcel delivery market means that there’s no room for complacency. Australia Post needs to maintain its strong position in the parcel delivery sector, especially in light of the losses it is suffering in its letters business.”

And while the Australian domestic parcels market continues to heat up, cross-border opportunities will rise and perhaps create additional headaches for Australia Post. It’s partnership with Alibaba was a good step as well as its ShopMate service but now with Japan Post gobbling up Toll and FedEx’s planned takeover of TNT Express, cross-border competition will intensify.