Australians are abandoning snail mail in a trend that has cost Australia Post $230 million and left posting letters on life support.
Australia Post chief executive Paul Graham delivered the warning on Friday as he announced the company’s first profit in three years, with a record number of parcels boosting its pre-tax return to $18.8 million.
Letters had collapsed into “permanent decline”, plunging by a further five per cent in volume during the financial year, with federal, state and local election material preventing an even worse result.
Australians were posting letters at rates not seen since the 1930s when the nation’s population was six million, Mr Graham said, and Australia Post would eventually stop delivering them.
“We definitely will and I can guarantee that we will deliver that last letter, but if you look at the way digitisation is going, if you look at the way that people are now engaging in information, it’ll all be in the palm of our hand,” he told AAP.
“I think it may be faster than some other countries because we’re pretty good adaptors at digital alternatives here.”
A decrease in letter volumes to 1.66 billion drove a $230.4 million loss for that aspect of the business, despite a 30-cent stamp increase and letter deliveries every second business day.
Australia Post’s pre-tax profit is its first since 2022 and a significant improvement from last year’s $88.5 million loss.
Record Christmas parcel deliveries of 102.8 million contributed to the result, with revenue from parcels and services rising by 2.9 per cent to $7.64 billion.
Domestically, parcel volumes grew by 2.6 per cent despite growing competition from global retail firms and small logistics start-ups.
The results also came just days after the government-owned network surprised customers by suspending parcel deliveries to the United States following an expansion of US tariffs.
The company also flagged further postage fee rises would be needed to address the growing cost of the service.
The company invested $371.9 million in fleet, technology and facilities during the year, including a parcel-processing facility at Melbourne Airport, delivery centre at Blacktown in NSW, and parcel and letters facility at Narrandera in regional NSW.
Australia Post could not afford to be complacent about its operations, Mr Graham said, amid growing competition for parcel deliveries.
“Competition in the parcels market remains fierce, with global online marketplace retailers ramping up their presence in Australia,” he said.
“We are facing sector-wide headwinds like many other global postal operators.”
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