Australia Post is changing the way it negotiates with its small business licensees, after quietly liquidating the advisory forum it has used for more than 20 years.
The government-owned postal giant now says it will ‘reinvigorate’ its relationship to thousands of licensed post office (LPO) operators.
But some industry representatives fear it won’t do enough to protect its small business licensees as Australians change their relationship to physical mail.
Since 2003, the Australia Post Licensee Advisory Council (APLAC) has provided two-way communication between Australia Post and the small businesses making up the bulk of its brick-and-mortar branches.
However, the public company underpinning that APLAC — jointly owned by Australia Post and licensee members — quietly entered member’s voluntary liquidation on October 21.
In a statement provided to SmartCompany, an Australia Post spokesperson said it has replaced APLAC with a new licensee advisory council.
“This refreshed and reinvigorated advisory forum, established in collaboration with APLAC representatives, will strengthen licensee representation, including more licensee seats on the national council,” they said.
Licensees remain a “vital and valued part of Australia Post”, they added.
LPOs and community post agents make up nearly 84% of Australia’s 4,198 post offices, serving suburban, regional, and rural areas where physical postal services might not otherwise exist.
They earn a commission from Australia Post each time they scan a parcel or facilitate a bill payment, and earn an income from selling stamps, envelopes, and boxes.
The LPO network also helps Australia Post meet its community service obligations to provide postal services nationwide.
Even so, Australia Post CEO Paul Graham argues there is oversupply of LPOs in some metropolitan areas, serving as a financial drag on an organisation adjusting to the collapse of snail mail.
It revealed an $88.5 million loss over the last financial year, after reporting a $200.3 million deficit the year prior.
Some LPO advocates are sceptical the new-look forum will help small businesses facing the collapse of letter postage, declining foot traffic, and clear directives from Australia Post’s top brass.
Angela Cramp is executive director of LPO Group, an industry group representing Australia Post franchisees, and is a former national licensee director within APLAC.
“I think the biggest problem is the desire for Australia Post to actually engage constructively with licensees,” she told SmartCompany.
“And I don’t think that’s actually there.
“So the company structure does not make that any different.”
Australia Post’s 2023-2024 financial report shows it made $581.8 million in payments to licensees over the year, up from $565.5 million in the year prior.
Despite the uptick, Cramp is concerned management will pursue an even smaller physical presence in the future.
“The great majority of manned outlets in their vision will be replaced by a bank of parcel lockers or a vending machine, and licensees can wither on the vine, because in their view, we are a failing business.”
LPO Group will continue to advocate for members outside of the new council, Cramp added.
Ian Kerr, CEO of the Post Office Agents Association Limited, told SmartCompany his organisation maintains constant communication with Australia Post beyond the new in-house advisory council.
He was somewhat more optimistic about the fate of LPOs.
“Post offices are good businesses to have,” he said.
The new-look forum could allow Australia Post to be receptive to reports “from the coal face”, he added.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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