Australian post office box prices rise again
History of a sad decline of a great service.
Published: 22 January 2014.
Last update: 18 February 2016
At a glance
PO box prices for the past 13 years:
|Year||Standard small PO box price||If paid before 31 March|
Australia Post puts the prices of its post office boxes up again. In 2014, the cost of a small PO box becomes $112.
In 2009, the price of a small PO Box was $80, so in five years Australia Post increased the cost by 40%. Average yearly inflation rate in Australia in the same 5-year period was about 2.75%, which results in 13.75% inflation for those 5 years. Over the past 10 years, considering that the cost of a small PO box was $55 in 2004, Australia Post increased PO box prices by nearly 104%. Inflation in Australia over the last ten years was around 27%. Which means that Australia Post increased its post office box prices 77% above the inflation rate!
Usually, higher prices are justified by higher running costs, implementation of new expensive technologies and increased cost of maintenance. However, Australian PO boxes haven’t changed for decades: they are the same black boxes with little doors and same awkwardly big keys — so, besides the inflation, the running cost and maintenance should not be that different to what it was before. All new services like e-mail alerts or sms notifications about the presence/absence of new mail in the box are available at a substantial extra cost ($55 and $89 respectively) on top of the box price, and thus cannot be used as an excuse for the price rise.
Nevertheless, Australia Post is blaming the price-hike on mounting costs related to raw materials, delivery, transport and energy despite the fact that people who rent PO boxes are actually saving Australia Post money by reducing street mail deliveries; futile transportation of parcels back to post offices for later collection by the addressee when street address delivery fails; cost of subcontractors for door-to-door parcel deliveries; fuel costs; and eliminating complaints about misdelivered letters or “safe-drop” parcels that were left on the premises being stolen or damaged by rain, insects or sun, or the “sorry we missed you” cards being placed in the mail boxes at the time when people were actually at home. It also helps the Post to maintain a reliable service, because any letter misplaced in a wrong PO box can be returned immediately by simply pushing it to the back of the box so it pokes out a bit and attracts the attention of the sorting person, rather than being left on the top of the street mail box to be destroyed by rain or be blown away by wind (because not every person has enough time or civic consciousness to take the misdelivered letter to the right address or to a post box).
Given all that, by ripping off and deterring PO boxes customers, Australia Post actually increases its costs rather than achieves higher revenue.
When questioned about the yearly increase of post office box rental renewals far in excess of the annual Australian inflation rate, Australia’s Post reply was:
We understand your concern around our PO Box prices, price rises are never popular. We to ensure that our business is self-sustaining like any other commercial enterprise and this price rise was required. We remain committed to continuously improving our products and services and providing them to our customers at competitive prices.
“Committed to continuously improving our products and services”? — Did PO Box service improve by 77% during past 10 years? No! It looks, feels and works exactly same as in 2004, 1994 or 1984. So why did the price rise so much?
“At completive prices”? — By competing with whom?
Price rises might be necessary for a business, but if they far outstrip the annual inflation without any valid reason or explanation, the consumers will vote with their feet. No wonder that every year, when PO box rents are due, the red-coloured “Rent Me” signs are plastered all over the vacant boxes. And every year there are more and more of those signs, which is a proof that Australia Post is pricing itself out of the market.
Where do the profits go?
According to some information sources, LPOs (Licensed Post Offices) — the local post offices and the employees we deal with on everyday basis — do not receive all the profits. Even worse: the payments to Licensees have been failing to keep pace with the imbedded cost of the provision of services. Which may mean that not only the prices are way higher than they should have been, but the extra profits are not actually going to the people who do the hard work. Post offices are actually discouraged by Australia Post management from servicing PO boxes by being paid a flat rate fees for delivering parcels.
The delivery process includes scanning each parcel in, placing a card into the PO box if the parcel doesn’t fit the box, storing the parcel, servicing the customer when they come to collect the parcel, scanning the parcel out, and, if required, obtaining the signature. The sorting has to be completed by 9 am every day, and, given the increasing volume of parcels due to popularity of online shopping, may require additional employees, yet the payment is the same flat amount, regardless of the prices the customers pay for parcel postage and for PO boxes which Australia Post continues to increase without proportional benefit to the Licensees. So-called fee for delivery to a business point does not account for the number of parcels to be delivered; that is, LPO receive the same payment for delivering one parcel to a hundred PO boxes and for delivering five parcels to each of those boxes.
As the result of the increased cost, the number of PO boxes leased at LPO steadily decline. The Licensees are losing their customers and income as a consequence of Australia Post increasing and pocketing the fees. In addition, the costs and amount of work LPOs have to do to deliver mail to street address is greater than if the customer would have kept renting a PO box.
One would wonder if this shortsighted mismanagement within Australia Post is deliberate, and the aim is to increase the Post’s short-term profits to make it easier to sell the whole system in the future? The very system that belongs to all Australians, is vital the existence of the country, and should be a fair-functioning entity providing impeccable service. “Everything is fore sale” — is this the new approach in governing Australia? It may work well for filling someone’s pockets quickly, but it is not sustainable for the country.
And, to the topic of increases, according to “Crikey”, in 2013, Australia Post workers received a pay rise of 1.5%, while its CEO Ahmed Fahour, already one of Australia’s highest-paid executives, received a pay increase of 66%, which brought his salary to an unprecedented $4.8 million a year!
22 January 2014
A letter from a reader
Like you, I am a PO Box renter, and similarly appalled by the unreasonable cost and significant annual price increases. As you point out, the technology has remained unchanged for many decades, so there is clearly no “R&D” to be amortised. Box layouts challenge both those of short stature, and most particularly those unfortunate enough to have one on the bottom rows, who are forced to kneel. As there are “establishment” fees (and additional fees for keys), it is reasonable to presume that the bulk of the “leasing” fees are related to the costs of mail distribution.
I have surveyed my Local PO, which has approximately 700 boxes (a mix of Small, Medium & A4), with all but 2 in use.
In 2014, even with pay-on-time rates the revenue aggregates to just shy of $86 000. I am advised that the time spent distributing the mail items in to these boxes is between 2–2½ person hours per day. At $20 per hour (plus 30% on costs) and for 250 working days per year, the actual cost of servicing the boxes is around $14 650. (This is a generous estimate of labour costs, and which are probably significantly less, especially in high volume facilities where staff performing this function will likely be on lower rates, and with lower on costs.)
This represents at least a 600% differential between cost and revenue!
It is well documented that the volume of physical mail continues to decline significantly, so the labour costs to service PO boxes (even after annual CPI rises) are almost certainly actually reducing. And, as the use of PO Boxes reduces Australia Post’s costs for street delivery, there ought to be a rebate factored in to PO Box rental to reflect this.
As a general principle, the cost to the client for a service should not appreciably exceed the actual cost of its provision. In the absence of a plausible explanation of the cost of provision of this service, the sustained annual price increases and their magnitude, this simply amounts to gouging.
14 March 2014
This year, Australian Post attempted to create an allusion that something will actually change, that the PObox-renting customers will get a bit more for their money. The PO box renewal notice boasted a colourful promise:
PO Box notifications coming soon
We'll soon provide you with electronic notifications to let you know when you have mail awaiting collection.
Simply update or confirm your details and we'll be in touch to let you know how to receive notifications.
Sounded good, but after a phone call to AusPost, it turned out that the notifications will be provided through the Australian Post’s MyPOST Digital Mailbox account, AusPost’s online service for receiving and storing the person’s bills and important documents, as well as the current AusPost CEO’s attempt to look young, hip and IT-ish. The notifications will not be delivered to the customer’s mobile phone or e-mail address, as many were lead to think by the renewal notice asking the customers to update their phone number and e-mail address overleaf. If for whatever reason the customer doesn’t want to sign up for yet another online myAccount (on top of the forced down people’s throats myGov and disastrous MyHealth Record – MyHR), doesn’t want to trust the important personal documents to Australia Post, or doesn’t use computer very often — tough! No notifications for them. There was nothing about the need to signup for the Digital Mailbox in the ad on the renewal, nor overleaf, nor on the details confirmation page, not even on austpost.com.au website, which was a very nasty and misleading move.
This is akin another caring suggestion of the Australia Post: AusPost was so worried that the proposed postage stamp price rise from 70c to $1 will heavily affect older people who are unable to use online communications and relying on paper letters, that it kindly offered freezing the cost of stamps for this category of people. To receive the concession stamps, the person must signup for the online MyPost Concession Account, which requires an e-mail address. How good is that?!
20 March 2015
This year AusPost has been busy losing parcels, delivering letters by dumping them on the ground in front of the letterbox, leaving the mail sticking to the street out of a very spacious letterbox, and inventing a way to give Australians a slower service for a higher price. The stamp price rose to $1, and, at the same time, the standard letter delivery now takes about 2 days longer than before.
The PO box renewal letter came with the exactly same announcement as last year: “Collection Notifications coming soon”. Also, the PO Box application form contains the misleading:
we can send you an email and / or SMS notification when you have an item waiting to be collected
Though, this year AusPost finally mentioned in its Post Office Box Service Terms and Conditions that, in order to eventually get the notifications, the customers must open a MyPost Digital Mailbox, the online ‘service’ Australia Post keeps actively pushing after losing its ability to deliver real mail properly and promptly. The so-called email notification will be, in fact, a message sent to the MyPost Digital Mailbox, and the so-called SMS is nothing more than a push notification through the MyPost app, which has to be tied to a MyPost Digital Mailbox and has huge limitations on what phones and mobile systems it works. All in all: useless, unnecessarily complicated, privacy-invading, and not even there yet.
It may be wise not to register for their Digital Mailbox or give AusPost your email address, not only to safeguard your privacy, but also to avoid getting electronic spam in addition to the paper spam they keep showing into PO boxes despite the customer opting-out of spam on the application form. The clause on the renewal notice “your personal information may be used to provide you with information about our products and services, as well as information from other businesses (including unaddressed mail) directly to your PO Box” clearly states: there will be junk mail. To open Australia Post Digital Mailbox, the customer needs an email address; so it would be much easier to receive electronic bills directly to the personal email address, without dragging a dubious third party into it and entrusting that third party with your security, online safety, and personal and banking details.
As to PO box prices, they, of course, increased again. Another news is that AusPost now demands to have the customer’s date of birth in their system, otherwise they “would be unable to provide this service”. How they have been able to provide exactly same PO boxes with a more reliable, fast and affordable delivery without excessive privacy intrusion up until now, is a mystery.
18 February 2016