'Tough business': Final hope for life as country post offices face closure

Australia Post chief executive and managing director Paul Graham said partnering with an existing business, such as an independent supermarket, pharmacy or general store, was preferable to having branches close after licensees retire.

"We find that local ownership of these businesses works far better, particularly where they're offering a broader range of services. It allows them to spread the cost and to be much more financially viable," Mr Graham said.

According to the Australian Citizens Party, 73 post offices closed in 2024

The AusPost CEO said it was "difficult" to find businesses in regional, rural and remote Australia that want to take on the added challenges of running a national mail service branch.

"We have ongoing challenges, particularly with aging licensees who are facing retirement in the coming years," he said.

"People know that running a post office is a tough business. It's six or seven days a week, it's long hours, so we are challenged to get people who want to step up and do that," he said.

"So what we are doing is working closely with the local communities to get ahead of that situation, to look at what other partnerships we could have, whether it be with the local pharmacy or the local land council, for example."

Mr Graham said AusPost was "absolutely committed" to maintaining its presence in regional and rural Australia in line with a regulatory requirement to have 2500 branches in country areas.

"That presence will continue to be looked at as the needs of consumers and communities change," he said.

This comes as the Commonwealth-owned postage service recorded revenue of $5.01 billion in the six months to 31 December 2024, up 6.3 per cent on the same period last year.

More than $4 billion in revenue came from parcels and services, helping AusPost to a $249.1 million profit before tax over the half, up from $33.6 million in 1H24.

Australia Post finalised new in-principle agreements earlier in February with all big four banks to provide Bank@Post services at around 3400 post offices across the nation.

About 370 of those are in towns where Australia Post provides the only banking service.

Australia Post cut its letter-postage losses in half as its parcel business helped send the carrier to a nearly $250 million first-half pre-tax profit.

Australians have continued to send fewer letters and, on average, receive two each week.

But a $0.30 increase in the basic postal rate to $1.50 and modernisation reforms have helped cut letter business losses more than 54 per cent to $83.7 million for the half.

"As we are seeing globally, letters volumes are falling, and this is expected to continue at pace," Mr Graham said.

The Australian Competition and Consumer Commission is considering an AusPost proposal for a further $0.20 hike, but the service isn't ever expected to return to profitability.

Parcels, on the other hand, have boomed in the years after the COVID-19 pandemic, with ongoing living cost pressures pushing shoppers towards online discounts.

Australia Post's parcels revenue was up $3.53 billion, more than 6 per cent on the equivalent half the year before.

Packages hit a record peak, with 102.8 million parcels delivered to customers in 2024, up 3 per cent on 2023.

An Australia Post survey found almost three in four Australians bought Christmas presents during the Black Friday sales weekend in November, which contributed to the record volumes.

However, the service's position in the booming and highly competitive parcel market is not assured as new entrants and start-ups jostle for position.

"In this environment of increasing competitive headwinds and ongoing structural challenges, further reform is required to ensure the long-term relevance and financial sustainability of Australia Post," Mr Graham said.

"Competition is intensifying, and our traditional revenue streams are shrinking."

The six months to June, with its absence of November sales, Christmas gifts and tax returns awaiting deployment, will likely be tougher for the postal service.

"The outlook for the second half remains challenging and we cannot afford to be complacent because we have seen an improvement in our first half bottom line, which is traditionally profit-making," Mr Graham said.

The company's Post26 strategy remains on track, with $87.2 million in savings made through cost-cutting, non-core business closures and efficiency measures.

Declining foot traffic has continued to weigh on the returns at physical post offices, which the services is responding to by expanding its parcel locker network and trying new parcel focused outlets.

with Australian Associated Press