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Here is a form letter not yet available on the POAAL web site!

Today, next week, next month?

Dear Customers of the (insert LPO Name here)   ................................LPO/Postal Service Users

Subject: Australia Post is leaving the area after xxx years service to this community.

On the xx/xx2013 the Licensees terminated their Licensed Post Office (LPO) Agreement with Australia Post (AP).

As a result of this termination, NO Australia Post services will be available from this site following the xx/xx 2013. Services include but are not limited to: mail or parcel collection (including post boxes and over the counter collections), sale of stamps, satchels or envelopes and no bill pay or money order facilities. The purpose of this letter is to inform you of the facts that have led to this very difficult decision to terminate Australia Post from this community. We deeply regret having to make the decision but AusPost left us with no other option. Following years of discussions between the Licensees and AusPost regarding insufficient remuneration to perform AusPost duties on our site, we feel we have been left with no alternative but to terminate our AusPost contract. We have given AusPost the required 90 days notice to cease operations from our site. The last day of AusPost service on site will be thexx/xx/ 2013.

All other aspects of the business remain dynamic and strong including grocery, gifts, gourmet, party, drinks, food, café and fuel. These incredibly valuable segments of the business will remain intact and we believe our customers will benefit greatly from our additional time and attention in these areas. AusPost pay less than $1.40 PER DAY for ‘Carded Articles/Parcels’. This LPO manage an average of 282 ‘Carded Articles/Parcels’ each month for external customers and an average of 133 for internal customers (the level of parcels received and dispatched to customers in Nov and Dec is around 457 per month for external customers only and still the same payment of less than $1.40 per day is received). Compared to the cost to provide this service, the AusPost payment figure falls short by approximately $8,716 p.a. Our association with AusPost under the current agreement is CRIPPLING our business and we cannot continue to subsidise AusPost’s multi million-dollar business with our small local store for any longer. Although we have clearly demonstrated the detrimental effect of their inadequate payments on our business, our small voice seems to have fallen on deaf ears, hence the decision to terminate the LPO contract. We have endeavoured to make sense of the totally inadequate payments (as have many, if not all other 2,934 LPO offices around Australia who are experiencing similar payment inadequacies). However, it is costing our business in real dollars no less than $250 per day in time and wages to maintain the service. AusPost is draining our business financially and it cannot continue.

The cost to operate business today is high. The rising costs of electricity, labour, licenses, rates, borrowings, telephones and other essential utilities places enormous pressure on business and every aspect of a small business must perform well to survive. It is unfair to expect profitable areas of business to subsidise the poorly performing aspects. At the end of the day it is the consumer who suffers with higher prices. We have reviewed with interest the Australia Post 2012 Annual Report – Future Ready*. AusPost’s annual profit after tax was $281.2 million dollars – up 16% on the previous year. They paid a dividend to their sole shareholder (the Australian Government) of $213.7 million – up 23%. All sounds reasonable until you look closer at the figures. The rapid uptake of digital forms of communication has led to AusPost’s declining mail volumes (letters). Letter volumes fell again by more than 4% resulting in AusPost losses in this area to the tune of $148 million dollars. However, as more and more Australians buy online, parcel delivery volumes are going berserk and this is evident in AusPost’s parcel volume growth. The AusPost parcels and retail revenue grew by 26% and returned a staggering $546 million operating profit. Although the loss of $148 million dollars on letter deliveries is having a significant impact on AusPost’s bottom line, they continue to persevere and deliver to 11 million delivery points each day.

On average AusPost delivers only 1.7 letters to each delivery point per day and this is predicted to reduce further to 1.3 letters per delivery point per day by 2016. 1.3 letters per day is akin to expecting a rubbish collection every day at your home to collect a bin that is only 1/7th full. We view this as an illogical waste of taxpayers’ money. To continue to deliver letters daily it appears quite obvious that AusPost is not reacting fast enough to today’s trends. Coincidently the $148 million dollar loss on letter deliveries could entirely fix the inadequate payments currently negotiated with all LPO’s around the country for the increased (labour intensive) workload required for parcel deliveries.

We are not the first LPO to terminate AusPost from their site and it is unlikely we will be the last if something doesn’t change very soon. The Annual payment we receive for mail boxes (we own the boxes and lease them to box holders under the AusPost system, and AusPost pay us an annual fee) should cover a portion of our overheads like insurance, maintenance, power, mortgage, phone and fax etc. but it doesn’t – it falls short by approximately $11,771 p.a. There are numerous other major areas of concern where the work involved and the overheads far outweigh the payments made to the Licensees by AusPost. In providing such an important service to the community and not being appropriately remunerated is draining our business by around $250 per day from our own funds – a figure that certainly cannot be maintained. As business is changing we are changing with it. Today’s retail marketplace is a constantly shifting environment and we have kept abreast of technology and our on-line presence is as strong if not stronger than many larger companies.

Customers come from all over the state to see this funky little store and buy the great products we sell. We send product all over the world now via our on-line store and we have successfully grown this fabulous business into a very exciting locality. Whereas many other businesses are reported to be struggling and falling behind in today’s tough economy, our business is thriving. To remain relevant in today’s world we must constantly reinvest and continually evaluate all aspects of our business to ensure longevity and on-going success. We cannot continue to subsidise AusPost any longer to the tune of $250 per day in wages and overheads.

If we could have found a way to resolve this situation we would have, but the fact that AusPost will not pay a fair return on the work involved has led to this disappointing decision. Terminating our contract and consequently depriving our community of an important and professional mail service is not a satisfactory result. We will keep you informed of the progress of this important matter as information comes to hand.

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