Australia Post Just Hemorrhaged $222 Million: Its First Loss In 30 Years. Is Mail Done For?

This morning, slightly intensifying the despair which presumably already pervades company headquarters on a daily basis, Australia Post released a truly bleak press release. Different from their usual news blasts about upcoming novelty stamps and local community sports commitments, this one casually announced the fact the organisation has lost $222 million in the past year.

“As we had forecast, this has been a challenging but crucial year of transition for our business, reflected in the numbers” said Australia Post Managing Director Ahmed Fahour. “We continue to make headway with reforming our letters business and we are investing in the infrastructure and digital capabilities — vital to servicing the changing needs of our customers. We are confident we have the resources, infrastructure and support in place to manage the ongoing transition of our letters business as we become a more eCommerce-centric organisation.”

For those that not well-versed in corporate lingo, that all roughly translates to this:

Predictably, this monumental profit loss has a lot to do with a general decline in the industry. Though the parcel business is still booming, people aren’t writing letters like they used to and the number of those sent have fallen by roughly 10 percent in the last year alone. In fact, this was the most devastating period in Australia Post’s 206-year history and it hasn’t been a gentle fall.

In 2012, Australia Post made $281.2 million in profit; in 2013, this jumped to $311.9; and in 2014, it fell to $116.2 — all somewhat comparable figures that are a hell of long way from today’s $222 million gut-punch. A $300 million downward swing in a single year is a horrifying situation for any corporation, let alone one that is owned by the government.

However sudden this loss seems — its the first year without profit in more than 30 years — it’s also been relatively inevitable. After hitting a peak in 2008, the letter business has been falling at rate of 5-10 percent each year and the only people still sending anything are from corporations and governments. With the standard assumption that letters have been redundant since you snuck them in your crush’s Year 5 tote tray, only 3 percent of those currently sent are in service of personal communication.

Fully aware of this, Australia Post have announced huge changes to try and stay afloat. In March, they convinced the government to approve a two-speed delivery service allowing for slower delivery times. In June, they revealed they’d be offering 1,900 voluntary redundancies over the next three years, and just one month later they lobbied to increase the price of postage stamps from 70c to $1 a pop.

This is the same all over. Though the postal industry will always be around to deliver your drunken online purchases, digital media may be poised to edge out smaller items. In a few years you might have to miss out on that $20 your grandma sends you for your birthday. Things are getting desperate.

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Feature image via Australia Post/Facebook.