POB Payment changes -Does it suit you?

UPDATE: The proposed changes have been put on the back burner for this year, and discussion will take place at a later date to determine the best way forward with this process, including a survivable transition period. Well done Australia Post for listening to Licensees feedback. 

A fair bit of consternation building about the news to the proposed changes to the POB Payments from Licensees who have attended their local LEEP meeting so far.

It is fair to say this concept has been rumoured for the past 2 decades but has never been progressed past that point. Now we are apparently being advised that it is a done deal!

Who did the deal? Certainly not LPOG!

During the past few years with a more constructive dialogue channel with Australia Post, this concept of monthly POB payments has been raised a few times, as an option or potential for future changes. LPOG has not rejected the concept outright, because monthly payments may well ease out the cash flow for Licensees, which would be a good thing potentially. The thorn in the side has always been the transition period, and it is pretty obvious that this has been holding back this concept for decades.

LPOG's response has never changed, happy to agree to monthly payments to begin 12 months in advance, right after the renewal cycle has been completed and we have this year's money, we will happily convert to monthly payments. The first year would be funded by Australia Post, and would require a fair bit of managing when/if POB leases decline, and or LPOs change hands. That would only last 12 month, so it could be managed.

Apart from raising the 2014 Senate Inquiry, LPOG's next best achievement from that time was enormous pressure from a very worried Senate Committee getting Ahmed Fahour to pay the POB advance in Jan of 2014. And every year since because it is the glue that holds many LPOs together. Thank you again Senator Barry O'Sullivan and former Senator Nick Xenophon!

This wasn't done out of any good will, Licensees, at the time, owed millions of dollars in outstanding stock bills for the previous 12 months, or longer. With so many Licensees on COD terms, or stop credit, Ahmed Fahour saw this as a way of showing the Senate he was listening, but more importantly he figured he could clear up his outstanding stock accounts by paying the POB advance 3 months early, and then clawing it back for the debt. It was the only thing that kept many of us trading back then.

So the current proposal presented at the LEEPs that have been held so far, seems to suggest that Licensees will fund this transition by forgoing any cash flow from payment for POBs from 5th working day of June 2019 POMs payment, until receiving 1/12th of the Feb 2020, March 2020 and April 2020 renewals on the 5th working day of May 2020 (assuming that we will never see the best case scenario of 3rd working day POMs payment). From then we will see the rest dribble down over the next 11 months. So, our POB holders may renew their POB in Feb of one year, and we will not see all of that money for another 14 months, however Australia Post has had access to all these funds from the day the customer paid. One can only imagine how good that will make the average Licensees feel! 

Many Licensees rely on the POB payments to commit to their rent and overheads. Many might look forward to buying a new car, or taking a holiday one day, but it hasn't happened yet for most of us, so it could be a fair way off still. The proposed changes mean that idea is now dead in the water! The biggest issue is the rent for the location of these POBs, that we will have to commit to for upwards of 5 years, to provide for a monthly fee in arrears. Quite often the accommodation is required to be paid in advance monthly, and usually committed to in advance by our lease agreements, which are usually 3 or 5 year terms, and insisted upon by Australia Post as part of our agreement obligations. So we sign up for a 5 year lease term with CPI increases if lucky, to be paid monthly in arrears with no surety of any tenure. At any time, Australia Post can disrupt this product, drive it into the ground as has happened over the past 10 years, with no skin off their nose, leaving us with the cost to accommodate the vacant POBs. Who thought that was a winning idea? 

Then there is the worry of Christmas. The busiest period of our year, with the least profitable period of our year, with the biggest risk factor of our year. When Christmas does not fire, as happened for many this year, we have shops full of excess stock, wholly discounted to well below our cost price by corporate stores if it was purchased from AP, but we need to at least recover some of our costs, so its still on our walls and shop floors. The POB payment helps us to keep trading while we try to clear the leftovers to recover some trading capital. Without that fallback position, many Licensees will not have the ability to take a punt on Christmas.

Everyone in business knows cash flow is KING! How is 14 months of reduced cash flow going to help Licensees, and where would the incentive be for Australia Post to manage this product with any mutual benefit with 14 months, before we see the entire pot of cash our customers paid to renew their POB in the previous year. They might even renew for the next 12 months before we have received the full payment for their previous renewal.

Comments

At he LEEP meeting on Sat. 9/3/19 there was much anger at the news about the proposed post box payment which appears to be a done deal and Aust.Post personnel did not want to discuss the issue due to the poor reception given by all persons present - Bob from Poaal gave advice on how his organisation was assisting Aust Post with the set up.

tarean's picture

Glad to hear that LPOG had nothing to do with this BS Idea,
We went to the Rooty Hill Leep yesterday and there was uproar when the new payment for PO Boxes was put to the meeting and when Bob Pooal told us the we go on holidays and by new cars with the PO Box money. The reasons for it to happen from AP people was BS at best.
So many for us rely on this lump sum payment for all kind of reasons and it is not aceptable for AP to hold our money and deal it out to us over the next 14 months. another concern of ours is if we are paid 90% of what the customer pays for a PO box will these b......ds leave the PO box payment locked into the price this year for the next 10 to 20 years being a large part of the payments we get it would have a similar effect to leaving the price of a stamp at 45c for 10 years it costs them nothing to service our boxes so why would'they think of this option to break us. no one thought the stamp price would be locked for years as they had gone up regularly until then, there is no guarantee that po box prices will rise like they have over the last years

The Mongoose's picture

If Bob PooAll (ShittyNizzi) and that other mob had the slightest say in this they need to be told to shove it.
This idea has been dusted off by AP so many times they don't seem to take NO for an answer. Seems to be yet another ploy by AP to lead us astray and confuse us again.
What about the early days when we typed out our own Invoices and we got to keep most of the Moolah ??
I demand there be no change at all with those that wish taking the earlier percentage that need it can.
I don't trust AP to stick with a Plan I still remember the constant turmoil for five years when the Smiling Assassin ran the show. We've got enough credibility these days to say NO. Has AP got the guts to fight back ???

I thought after the last five years we was supposed to be consulted ?????
Didn't last long did it ???
AP and their MouthPieces at every LEEP meeting from now on need to be told in no uncertain terms that the answer is
GET St......ed.

Frankie's picture

All Poo. The P.O. Box smozzal has Poaals grubby fingers all over it. And of cause the dill would say its all ok. It isn’t his money....

Margee's picture

Don’t hold back Goosey.... Btw I totally agree with you! :)

It's an absolute no from me. My cash flow revolves around that lump sum. My bank repayments, everything. If it dribbles to us over the suggested 14 months the situation could become serious. I view it as a very major step backwards.

It is our money,

gully's picture

How about I collect the money from my box holders and then I pay AP their share in 12 monthly instalments? Tell them it makes it easier for me if I sell my business. I'm sure they'll understand.

maggiesimpson's picture

I can't believe LPOG executive knew nothing of it! And if this is the case, I have lost all faith that AP will ever come to the party.
I have relied on the bulk payment for 15 years and have bank commitments scheduled around these payments. They can get rid of the early January payment but when the customer pays, we should be paid.
Like I said on the FB page, it's my money, it's my cashflow and I don't need AP to babysit my money and dish it out over 12 months.
So is this IN or OUT, over this bullshit in the middle, please make it black and white. If it is in are they going to pay interest on our money they are holding?

No idea why but I somehow reported this comment t. Please disregard it as I have fat fingers. I agree with everything that has been said

gully's picture

Tying our POB payment to the customer's POB fee could ultimately bite us hard. Our POB payment should be tied to the cost of us providing the POB, not some unrelated number that AP decides to charge our customers. What happens when AP decides to reduce POB fees to compete with some new competition? Since they're moving all the other payments to other transactions (eg parcel delivery scan) AP could easily make a case that an actual POB delivery point doesn't cost them much (or anything). Or they could see POB's as a competitive "loss leader" that ties people to AusPost and cut the price significantly. Then we get 90% of a much smaller number.

Nup, this idea stinks. We have no control over what AP wants to charge for POB's and it's completely unconnected to the cost of providing a POB. It makes no sense to tie our payment to the POB fee.

gully's picture

This seems eerily prescient given recent events.

Agree with LPOG position - The Proposal as it stands is unacceptable
As has many LPOs I have outlayed considerable capital for the expansion of Parcels at a loss for a number of years (F Troop), with the other requirements for extended lease terms and costs all payable monthly in advance. I agree with Post strategy that parcels is the way to go. The PO Boxes are the reason that Post has a competitive advantage with Parcels as we are the destination point for the customers, as Retail declines. Not only this for every box they save significant costs of delivery. I can see the benefits of the new payment regime overall, but as mentioned the devil is in the detail for the transition of PO Box payments. If Post want to get this off the ground they must make some compromise and pay the remainder of the Po Box payment in advance and kick off on July 1 with the new payment regime and INCLUDE the 90% payment for PO Boxes from that date.
We need to make it very clear - that for the new payment regime to work they must compromise.

Its a NO from us...its our money and WE NEED it. What ever needs to happen to stop this lunacy must happen. Decisions like this could be the final nail in the coffin for some!!. Once again Post shows that they don't give a toss about us or survivability.

Where is the Consultation!!
The PO Box payments in general and the proposed payment ie 90% of customer fee is such a significant issue perhaps LPOG should insist that POST Management desist from any further communication on POBs at LEEP meetings around the country until the issue is satisfactorily resolved to the satisfaction of LPOG Board and its members

cecilcitypostie's picture

Absolutely a Big No From Me Too
I can't believe they want us the poor LPOs to cop this slap in the face !! after all these are our property not AP , Maybe if they then pay for the maintenance and the rent for the space then they might have a cause to pay us in areas FFS AP playing not fair

Sandgroper's picture

Is this something that could go to the ACCC??? No consultation, POB's are owned by us etc.

Godfather's picture

AP shouldn’t financially benefit while at the same disadvantaging licensees. Consider a high interest rate environment at some point in the future, the ‘real’ result to a licensee may be 85% of the customer PO Box fee after considering inflation/interest costs rather than the proposed 90%. The benefit to AP increases as the cost to licensees increases which is also a fairness issue.

LPOGroup's picture

Robust consultation ongoing on the issue. Let’s see where that settles first. Nothing is set in stone and nothing is changing in the short term. Plenty of time to make this different.
Frankie's picture

I’m glad of that.
AP can stuff things up big time P.O. Box payment wise. Past
Performance for example.

ASHA300's picture

short answer, NO, reason I really dont have to give one, but I dont like it one little bit, it stinks , it would appear no consultation with LPOG, and most importantly us bloody LPO, who have suffered at the underhanded tactics ,bullying crap and the you will do it, accept what we say, from AP.
Many of us rely on POB payments the early 40% certainly assists, so if Post wish to change the system to suit their agenda consult with LPos/LPOG.
A monthly POB payment is certainly not a suitable alternative to me or the way I endeavour to operate this LPO.
We all suffered enough with the LIPOM to POMS payments, we were the people who were told, sorry you will haver discuss it with your Bank and change the payment dates, this sort of crap.
Post have this fantastic ability to stuff up any payment changes, so why would any change to POB payments be any different.
POST need very quickly to learn that the day of ruffriding over LPos with a decision, has long gone.
LPos have a voice and may I say a bloody strong and vocal voice.
POST need to accept LPos are no longer idiots to be runover.

It frankly stinks, NO, NO, to any changes to POB payments
If Post wish OK cancel the 40% prepayment, and pay us 100% in April.

Final statement, if those bloody morons at POAAL have had anything to do with this situation they need to be held accountable, and if so, and Post made decisions based on POAAL input only, they obviously are what we could describe as snakes in the grass.
I have previously sent email to POAAL, stating in no uncertain terms; They do not represent this LPO or its Licensees
Look like Mr WANK KERR requires another email reminding to stay well clear of this LPO Licensee.

ASHA300's picture

Forgot one thing;
Post seem to forget that POBoxes are actually owned by the specific LPO, POST pay the LPO to lease the PObs on an ongoing annual basis. The payment for a lease product is always in advance, sure a motor vehicle or chattel is paid one month in advance, and usually has a term end residual payment; That how a standard item lease works.

In the case of POBs owned by LPos, POST have within the LPO agreement for years I would suggest, have paid LPos until the last few years, in advance annually. SO why change now.
The upfront payment was to assist us LPos, but it worked for POST also.

My personal view and I am not always right, the POBS are my property if Post wish to lease them from me, they should enter negotiation with me or my designated representative in regards to HOW and WHEN I am paid for the priviledge of leasing my asset.
It was mentioned above in a post, LPOs may suggest, LPos collect, retain the POB income each 31/3 and remit to POST their % of the income.
I am 100% over the manipulation of Post.

colso's picture

It certainly didn't take long for "all the all part of the one team new broom hand holding"to collapse with this crazy idea being introduced without any consultation.

cecilcitypostie's picture

what about if they start paying monthly from the
jan 2020
poms that would be fairer if there is no other way of doing it

Gail's picture

The spin from AP to justify the change in PO Box is that Licensees are buying new cars and going on holidays with their PO Box money. I find this truly offensive because this money is MY income and how I wish to spend it is MY business. Most of us use it to pay the never ending bills or manage to put a bit away in Super if we are lucky. Do not tell me how I should spend MY money!

Looks Like AP DOES Listen when Licensees speak.
Maybe there is a bright future ahead after all.

ASHA300's picture

suggest that as we LPOs NOW have a very loud voice, we have grown balls and will speak to media if required.
Post IMO do not wish any further media coverage of a negative nature, and just maybe they are a little frightened that we just may decrease our trading hrs on a specific day, POst dont like embarressment.
Now for the justified CONSULTATION.

spikey's picture

I'm with you Gail.What a very unprofessional reason to change OUR Post Office Box payment.Most of us use it to pay bills and try to recover money we have ploughed into our businesses to keep them afloat.

The Mongoose's picture

Be aware the POB payments have only been put back in the warming dish.
Time to become the LOUD CROWD again.

TOO RIGHT... POAAL raises its ugly head and Post listens. (Asha) Just ask how this was seen at the 9/3 Leep meeting. If I was a newby I would have thought what a great organisation fighting and gaining all the things which were actually won for us by LPOG

ASHA300's picture

Its time we made a conserted effort to rid the industry of POAAL and all the hangers on.
I am sick and tired of POST continual manipulation of this industry,to suit its own ends.