Australia Post cleared to raise bulk business prices

Australia Post has been given the green light to raise the prices of some of its bulk business mail services. The Australian Competition and Consumer Commission (ACCC) concluded that it had “no objection” to the price hike, which can now be implemented from 4 July.

Australia Post said there will be no change to the basic postage rates and that changes will only apply to bulk business mail customers.

The “preliminary view” of the ACCC reflects the operator’s revised agreement to reduce the price rise for Off Peak mail to 90 cents following a consultation with its customers, Australia Post confirmed.

The price hike will be the third to PreSort services since 1992, with the key PreSort price having risen by less than one cent since 1992. The company said this represents “only a 1.5% price increase; by comparison, the Consumer Price Index (CPI) for the same period has increased by more than 64%”.

Jim Marshall, executive general manger postal services, Australia Post, 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 and predict that in 10 years it will be the equivalent of another Queensland being added to our delivery network. At the same time, costs keep increasing, and letter volumes continue to decline, with our letters business losing over AUS$170m last financial year.

“For a business that sends out 2,000 small letters each year, the extra cost will be around $30 per annum, which will have minimal impact on most bulk customers’ businesses.

“While the increase will vary, we predict the average increase for business customers will be around 3.8%,” Marshall said.

ACCC chairman Graeme Samuel said: “The ACCC has taken the preliminary view that it should not object to Australia Post’s revised proposal.

“In forming this view the ACCC notes Australia Post is expecting to incur losses on its monopoly services. The ACCC has also taken into account the benefits of the revised proposal, including the changes to Off Peak services.

“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.

“The ACCC and Australia Post have agreed to re-examine the current approach before any future major price notifications.”

In light of other transport companies introducing fuel surcharges, Australia Post confirmed it will also be introducing a fuel surcharge in July.

“This surcharge is equal to a 1% increase in price; however it will not apply to domestic letters or affect the 60 cent stamp,” the company said.