Parcel Services

With a steadfast focus on offering the modern service that Australians want, we're creating a world-class multi-channel parcels and freight business to harness the growth in online shopping and ecommerce.

As the delivery partner of ecommerce businesses around the country, Australia Post has long supported online pioneers like eBay, Catch of the Day and OzSales. Our traditional retail customers such as Myer, David Jones, Woolworths, Target and many wine sellers are also transforming their business models to suit today's digital world. We are supporting them with fast, reliable and competitively priced options for sending product to their customers.

Over the past five years, we have been upgrading our parcel services and capabilities to support the boom in online shopping. In today's digital world, customers expect high levels of service and convenience at every touch point – from a phone call to our customer service centre, to the driver delivering the parcel. We're focused on ensuring we provide our customers with a seamless, reliable and value-for-money delivery service.

We are now embarking on the next part of this transformation, which means aligning our business to our customers' needs. To achieve this, we have organised our business under two core brands, a blue brand – StarTrack, and a red brand – Australia Post.

Introducing the new StarTrack

Over the past 12 months we've been integrating Australia Post and StarTrack to create a logistics provider that services both business and consumer markets with an unrivalled suite of delivery services.

By combining the trust, reach and convenience that Australia Post is famous for, and the premium service standards, express freight capability and business-to-business strength of StarTrack, we've created the largest logistics force in the country.

The integration of these businesses means we can now service both business and consumer markets with an unrivalled range of parcel, freight, express, courier and international logistics solutions developed with customers' needs in mind.

Through Parcel Post, Express Post and StarTrack, we offer a range of choices in small consignment freight and logistics with same-day, next-flight, next-morning, next-day or our regular three-to-five-day delivery service, all under the StarTrack banner.

Bringing our brand to life

This year we made strong progress in bringing our new StarTrack brand to life. The refreshed brand features the familiar Australia Post “P” in dark blue and the StarTrack wordmark. It is now visible on our vehicle fleet and at our office in Sydney, which is called StarTrack House. We also rebranded Australia Post's Messenger Post Courier business to StarTrack Courier in May 2014 to coincide with the official opening of StarTrack House (see breakout box).

Powering online shopping

The digital economy continues to create opportunities for our parcels business. The recent boom in Australian ecommerce has been – and continues to be – our most significant growth opportunity. Australians now spend more than $15.5 billion a year online (NAB Online Retail Sales Index June 2014).

Studies of the Australian ecommerce market consistently predict strong year-on-year growth in Australian online spending through to 2020. Currently, online retail spend in Australia represents around 6.6 per cent of traditional retail spend (as reported in the NAB Online Retail Sales Index June 2014). This lags behind other developed countries, such as the USA and UK, whose online spend is estimated to be more than 10 per cent (Morgan Stanley Research, January 2014).

While online retail continues to evolve and mature, the pace of growth has slowed from the very high rates experienced in 2011 and 2012 to single-digit growth today. This slowdown in the ecommerce market is the result of prevailing sluggish economic conditions, cost of living pressures, low levels of consumer confidence, and the emergence of new retail distribution models, such as Click and Collect.

Despite this challenging market, we have had a year of solid performance with our domestic parcel volumes growing by around 12.8 per cent and overall parcel revenue growth of 16.4 per cent. While volumes are increasing, we are still achieving high service performance levels with 97.8 per cent of parcels delivered on time (above our target of 96 per cent).

Strengthening our network

Our Future Parcels Network program is a $595 million capital investment in our systems, processes and infrastructure to boost network capability, support future parcel volume growth and improve customer service and satisfaction. The program will deliver major safety, productivity and cost improvements, and double our capacity so that we are equipped to handle more than 320 million parcels per year nationwide by 2019. Throughout 2013–14 we upgraded our major parcel facilities in Sydney and Melbourne (see breakout box) and completed extensive design, development and testing of the equipment and systems that support them.

We also relocated our Sydney transport operations from our Sydney Gateway site in Granville to Chullora – adjacent to our Sydney Parcel Facility. The new transport site, which was chosen based on its proximity to major arterial roads, will create operational efficiencies by reducing travel between the two facilities.

Creating an efficient interoperable network

In addition to new network developments, we are using the collective assets of existing Australia Post and StarTrack services to create efficiencies and deliver better customer experiences.

In April 2014 StarTrack and Australia Post Business Hubs ran a pilot in the Australian Capital Territory (ACT) to simplify customer parcel and freight collections.

During the pilot, if a customer wasn't available to receive their item, StarTrack Express Deliveries were sent to local Business Hubs, which offer extended parcel collection hours. Before the pilot, the ACT experienced around 210 residential redeliveries each week due to unsuccessful first-time deliveries to customers.

Redeliveries in the ACT have since decreased to less than 20 a week and the process was implemented nationally with positive results: more than 27 per cent reduction in redelivery calls to the contact centre, more than 80 per cent reduction in residential redeliveries and estimated yearly savings of $1.3 million.

Positive customer feedback praised the convenience of collecting from Business Hubs, team members' professionalism and the extended opening hours for parcel pick-ups.

Improving our tracking capability

We improved our tracking capability in 2013–14 by completing the deployment of 26,000 new scanners across our network. This allows us to increase the number of item scans as packages travel through our network, providing greater visibility for both senders and recipients, and increasing their confidence in our service.

To ensure that our network can continue to support growing demand, in March we upgraded our eParcel labels and introduced the “smart barcode”. The two-dimensional data matrix barcode, which was developed to a global standard and provisioned for increased data storage, enables a faster scanner response and is more likely to provide a scan if the barcode is damaged or obscured. The introduction of the new barcode was strengthened by address-validation processes, providing data to automate parcel sorting down to the driver delivering the item to a customer's door. An accurate, validated address means more first-time deliveries and fewer returns for customers.

Expanding our Business Hub network

We are continuing to invest in our unique network of Business Hubs to get closer to local, small and medium business customers. These provide an integrated, customer-focused, one-stop shop that makes it easier for Australian businesses to connect with their customers. We offer products, services and support that are tailored to business customers so they can get things done faster. This includes extended hours, convenient delivery solutions and extended access for parcel collection. At 30 June 2014 we had 56 Business Hubs operating across Australia.

Helping small businesses grow

We're also supporting local businesses to sell online by improving our product and service offering to provide greater convenience, flexibility and value for money.

This year we strengthened our partnership with eBay, Australia's biggest online marketplace, to provide a quick and simple sale and postage process for Australian online sellers. The new service enables eBay sellers to generate and print postage labels, and purchase postage products through the eBay website.

We made improvements to Click and Send in May 2014 by introducing a number of new services including flat-rate satchels and boxes that offer customers 24-hour access to domestic and international delivery solutions, pay-as-you-go convenience and price certainty. Eligible businesses that send 250 parcels or more a year through Click and Send or our Parcel Send app are encouraged to apply for the new Business 250 Membership, which offers savings on selected parcel products. More than 1,500 businesses applied for membership within the first three months.

Creating customer benefits through new partnerships

To help small and medium Australian businesses access new markets in Asia, we signed an agreement with Alibaba, a China-based ecommerce business and operator of Tmall Global, the world's largest online business-to-business trading platform. The joint agreement opens the door for Australian businesses to 500 million registered Chinese customers.

In June the Online Retail Industry Awards (ORIAs) announced its new major partnership with StarTrack. In its fifth year, the StarTrack ORIAs provides small and large businesses with an opportunity to position themselves as a leader in several ecommerce categories, including Best New Online Retailer and Most Innovative Online Retailer. This sponsorship is part of our commitment to connecting online buyers and celebrating excellence across all online retail channels in Australia.

Supporting ecommerce growth

Australia Post is stimulating ecommerce growth by offering our customers the choice, convenience and control of being able to direct their deliveries to locations other than their homes. We now have 24/7 Parcel Lockers at 181 locations as well as more than 725 post offices, Business Hubs and delivery centres that offer our Parcel Collect service.

Following a successful trial in April 2014 we introduced the Collections Widget, an innovative web application that enables merchants to show a list of Parcel Locker or Parcel Collect locations as part of their online checkout process. This enables the buyer to select their preferred delivery option at the time of purchase.