The Dashboards - A Sea of Red or Fountains of Opportunity?

We should all know by now that our payment arrangements with Australia Post are under reformation. Stage 1 was focused on mail related payments, and introduced the new, and increased banking payments.

2,860+ LPOs have now received their 9 month YTD dashboards. These dashboards show pretty much the payment reform as it would have impacted the LPO payments, had the payments been paid under the new scheme from 1 July 2018.

Suffice to say there is a wide range of reactions to the information provided in the dashboards. The ''sea of red'' being one of the loudest complaints. So to put it into perspective, we are looking at 267 negatively impacted LPOs out of 2,860+ LPOs.

67 LPOs have a negatve impact of less than $1K annually, and for 58 of them, that is less than 1% of their total business revenue. 45 LPOs have a negative impact between $1K-$2K, and for the majority of those LPOs, it is less than 1-2% of their total business income from Australia Post. With parcel volumes rising every month, there is a strong possibility that the lodgement scans alone will offset that negative impact for 100+ LPOs.. That is not to make light of the negative impact, but the potential to improve the business outcomes is far greater and it is exactly why this method to remunerate licensees was endorsed. When the business grows, so too does our remuneration.

130 LPOs have a negative impact between $2k-$10K, which obviously will need different solutions to overcome and move these LPOs into positive territory. 25 LPOs have lost more than $10K and it is to be expected that Australia Post will be doing a lot to understand how these LPOs have fallen short of the line. And what the solution is for those LPOs.

This is not quite the sea of red that is the prevailing claim across the network. Granted if your LPO is in this group, you would be disappointed. There are a few big losers, but there are far more winners overall across the network. Anyone that is negatively impacted will find themselves being given far more attention in the next 12 months, as work progresses to find solutions to lift as many as possible into a positive position. However, it is a fact, that some of the big losers, are losing funds that quite possibly should not have been received in the first place, if the LPO was operating as per the regulations. So that will be tricky for those Licensees in that situation, as well as Australia Post.

On the positive side 227 LPOs had a positive increase of up to $2k, 727 LPOs had increases between $2k-$5K and 1,517 LPOs had increases between $5K-$25K with 103 LPOs with increases greater than $25K. More than 72% of these LPOs have seen increases greater than 5% of their total business revenue from Australia Post.

For almost 2,600 LPOs, this reform is a good start to a long overdue realignment of the business outcomes for the LPOs we operate today. The current scheme was established in 1993, before any digital devices, including computers, existed in our LPOs. Since 1993, the way people communicate, and shop, and transact has change dramatically. Yet we were still dealing with a payment structure set more than 25 year ago, with no inbuilt provisions to meet the changing shape of our industry. Licensees started calling for changes to the payment scheme as early as 1995, citing unfair payments and lack of definition within the terms and conditions of the payments. The majority of the mail related payments were linked to the BPR, so there was no provision for increases to those payments unless the BPR was lifted. The BPR was purposefully stagnated for more than 11 years during this period, and the impact of that was well understood by the management of Australia Post, but ignored as inconsequential. It was far from inconsequential for those of us who operated through that period. It was a very stressful period for LPOs, and saw the establishing of LPOG to try to save ourselves.

So in 2019, our mail related payments have been reformed to align more closely with the work we do in our vastly different range of LPOs. It is abundantly clear that a "1 size fits all" payment scheme doesn't fit all, and finally we have seen the start of change. And it is change that we desperately need. Probably continual change, that will keep pace with our changing business. Even in the last 2 years we have seen a raft of new initiatives, new products and services, changing customer and transaction numbers, innovative technology and changes in every sector of Australia Post. So it stands to reason that we should have a dynamic, flexible and agile payment structure that will move with our times.

LPOG set out more than 6 years ago to bring about change to our payments. Those of us that made that call more than 6 years ago, probably did not quite grasp the complexities of the reality of achieving a new payment scheme. It is very complex, and is not something that will be done and dusted in a few months, or even years. It is probably the reason no one has ever actually done it before now. 

For better or worse, we now have established change. Many Licensees are delighted with their results, because they have been our very poor cousins for years, disadvantaged and underpaid because of the type of their LPOs, for doing exactly the same work many others have been well rewarded for providing, for the same amount of years. A non street delivery (affectionately known as "F Troop") LPO that could have relocated to a region with parcel contractors may have earnt an additional $40 - $80K per year, delivering their parcels via a different payment. Stuck where they were, they got no payment. Very unfair. Now they get paid to deliver parcels like the rest of us. Finally they have received a win.

There is another bucket of Licensees that have ups and downs on a raft of different products and services through out their payments. Many of these Licensees are concerned at the loss of our stable payments that have now been replace with activity based payments. These payments would be the POB payments, MMFs, and thousands of parcels that earn us no payment. During the period of stagnated BPR, Licensees received around 60% of the customer payment for our POBs. The payment is now set at 90%. How we would have longed for that % 10 years ago. The MMF has long been termed the sink, anything can be shoved into that bottomless pit, and Licensees have just been expected to suck it up. Now a parcel is a parcel is a parcel, with their own fair payment. The bottomless pit has been cleaned out somewhat. How we longed for that for 20 years. Our payments are now decoupled from the BPR, and increases are linked to the GRIA, and happen annually in line with the same index that we must apply to our staff costs. It is not perfect, but far better than a stagnated BPR, or the CPI which is usually far less than our annual staff increases, or rent and utilities increases.

There is a lot more of our payments that need to be reformed, and there are obvious areas that missed in this work, the primary sort work being the most obvious. Discussion on how that is to be resolved remain robust, and ongoing.

We are transitioning to a new payment scheme, bit by bit, area by area. The results will be under everyone's microscope for years to come. The aim of this work is to provide a sustainable future LPO network. We are beginning at stage 1. This could be like painting the Sydney Harbour Bridge. You start at one end and paint to the other end, then go back to the start again, doing it all over again. So they say.

So let us see how the dust settles when this new scheme is actually put in place, and the bugs are taken out. Lets see what else is heading our way by way of new business with our new banking partners, or government services. Lets see what our new CEO, Christine Holgate and our new EGM, Nicole Sheffield have in play for our future.

We also need to consider that we have not finished this job, we have only just begun the job. Change is a long term project.

 

 

Comments

wombat's picture

I still haven't got my Dashboard yet, i have talked to my AM about it and have been told that the State manager and several others are reviewing it to try and figure out where it all falls down and NO i am not one of those that have been doing the wrong thing, i believe primary sort is one area getting attention, Its frustrating but at the same time reassuring that its all actually being looked at. Thank you to the LPO group for you tireless work, there is light at the end of the tunnel.

We do the primary sort as well and our original dashboard and its revised version all showed substantial increases, but we received no payment when the update came. Our area manager is looking into it so we'll see what happens.

seachangelpo's picture

sounds good on the surface BUT
if compensation received from AP does not cover the REAL cost of doing business then the percent and dollar figures being fed to LPOG by AP are interesting but meaningless IMHO. Even a 100%+ increase in total revenue received from AP may not be sufficient to offset a Licensees REAL expenses let alone return a profit to the Licensee. From memory didn't Nick X say something like the busier these Licensees are the more money they lose....

In any event, it's good to see change is happening and I congratulate the LPOG Exec on that achievement BUT do not be fooled by APs smoke and mirrors....

Scott Evans's picture

love the knowledge and commitment for exec, and agree 100% with Seachange, BUT VERY FRUSTRATED that it is again the volunteers that are providing the hard work to put this into context and inform all franchisees, without compensation from AP for managing their franchisees. cheap bastards!!

foxy's picture

Thanks for update and drill down on how the new payments have impacted. We really appreciate the tireless effort and determination of the executive.

MAIL MANAGEMENT's picture

I remain loyal and thankful to the LPOG exec but am in shock regarding my dashboard. The first dashboard was a complete mess with major errors and indicated a slight loss of about $1000. I sent it back to be reproduced and waited for weeks to eventually be told that it was not possible. I have finally received my new dashboard today and need to take time to digest the numbers but shows a loss of $15 000 over the 9 months. I am a primary sort office and am gobsmacked at the losses in MMF relating to street mail delivery points serviced. The new payment scheme positive areas of payment has absolutely no bearing on the workload to do with this work. It seems we are being penalised for running quasi delivery centres for AP. My payments for "Delivery services" alone are down by $40 300 over the 9 months. This work is totally unrelated to the increases for banking or parcel scanning. GOBSMACKED.

True true and I hope the next dashboard doesn't blow out on you to much. Parcel scanning saved our bacon and as for banking, I feel that all it does is creates more work and puts more responsible and pressure on us and staff not to make a mistake.
And don't expect to get your money if a banking error happens. The help desk recently told us that the banks are pushing back and don't want to help us out if a banking error happens from now on.

gully's picture

Absolutely in favour of the work being done, thankful for the progress being made and grateful to those that have sacrificed so much time and emotional toil to achieve these changes. But the "three card monte" being played by AP has put a very sour taste in my mouth. The hoopla and fanfare that AP had around the various increases and "investment in the network" and then we find they're gutting the MMF in the LEEPs. No mention of those huge pay reductions in the press.

Its very very hard (some might say impossible) to think that AP has the health of the LPO network at heart.

You better check the new dashboards closely as in my case I have some lines that have now a lower modelled payment for 9 months than I had for 6 months.???????

New Life's picture

Interesting comments if this reform was to help save F Troop unfortunately for this F Trooper the reform has been a successful disembowelment. I have always voiced my objection to decreasing the MMF because it was already the loss making payment so how was this ever going to fix that. The double impact is overwhelming because not only do we continue to suffer from mail related payments we are being decimated by delivery hell bent on bullying contractors to drive sometimes 3km up a dirt driveway to leave a parcel behind a pot plant. Not that this isn’t good for AP business but for my business the pie in the sky fantasy resulted in a projected 20k loss the biggest impact from mail related payments so even with the completed all stages reform it will never replace these losses definitely never ever from parcel/mail payments.
All reduced rate POB are being systematically targeted for delivery so the sugar hit from POB has been significantly diluted with losses in POB payments coupled with the flow on parcel payment losses as those parcels get delivered to the door. Yes the POB payment increase will help, for how long not sure it depends on what further negative AP influence is yet to come.
Negative A plus negative B will always equal negative C, for this F Trooper this latest impact has positioned us back where we started if not a little worse, if the desperation and decimation was previously overwhelming what should it be now. But what really upset me the most was the comment that if your losses are high you were somehow overpaid… if only that dream was true?

maggiesimpson's picture

Hey New Life, long time no hear. Hope you're keeping well. These dashboards we are getting really don't mean much, I don't think. I am going to wait till July payment to see if Im up/down/even. I must say but I don't go much on the MMF dropping. Honestly if AP wanted to help us ALL they should have left the MMF and just paid us more for ALL the parcels be it PO Box, roadside, street, Startrack. Ä parcel is a parcel!!!
Great to see that baldy baby again. :)

LPOGroup's picture

Pretty sure you do the primary sort in which case your dashboard is not fixed. Reducing the MMF was only going to work where the parcels payment picked up, and improved the revenue. That doesn’t work for primary sort DPs so it needs to change. Or come 1 July the DCs will need to be delivering the parcels all neatly sorted into the rounds and the POB sort. Not likely to happen so doubt that will be the solution. It’s a lot like the GRIA increase instead of the CPI, took them a while, but they got it in the end and the money was paid from the date it should have been paid. So don’t count your losses just yet.

So us F Troops that are providing the free mail redirection from street to PO Box, which is another split of the primary sort going to be acknowledged by AP for this extra work we do for free?

Wormies72's picture

The baby is back, totally pissed off mind you, but he is back. Welcome home honey. :) Missed your sweet checks. Now where is that bloody cat? Come on Uncle Col. I am sure you have a few words?. We are all pissed about the reduction of MMF. AP have stuffed up royally on this. A third reduction maybe, but half is ridiculous. I am stunned NL that being an F trooper you have not gained. What is the bloody give there?

Margee's picture

Welcome back New Life, now we just need the cat with the machine gun and it will be like the good ole days.....

maggiesimpson's picture

AM just told us there is no back pay from jan Everything starts 1 july

phantom's picture

Hi Bubba, we are not doing well either. But,us goils have missed you. Xo

MAIL MANAGEMENT's picture

Welcome back New Life. I am loosing over 20k for this work as well. It sucks royally. You are a wealth of knowledge and hope to see more of you again. Got a tad excited seeing the bubba pop up again. Hope you are holding up under the strain. I have been having a tough time with this. Mental health has been knocking again.

Jan's picture

Do you have someone that you can talk to going postal? I hope you are ok, all of this takes such a massive toll on our health.