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What is the Cost Impact to You?

The biggest price increases ever! After increases in March and more in October, Australia Post has proposed that the basic postage rate will move from 70 cents to $1 in January!

Australia Post has proposed the biggest price increases ever!

Mail-with-dollars_150x600.pngIf you are sending a little over 4 million envelopes a year using the PreSort Letters service, then under new plans by Australia Post, come January, you are going to increase your postage bill by about $1,000,000 a year.  If you are sending 100 million envelopes a year, then next year your postage bill will increase by about $24,000,000!

Earlier this year we predicted that the basic postage rate (BPR) and price of a standard postage stamp in Australia would move from 70 cents to $1, along with the introduction of the 2-speed delivery service that has been in place for business services since 2014.

Both seem like they are going to happen, but with their draft notification lodged with the Australian Competition and Consumer Commission (ACCC), Australia Post wants them both to occur on 4 January 2016.  This following a quick bump up to business services in October too (yes, 3 changes to business services in about 10 months).

Although the ACCC intends to release its preliminary view on Australia Post’s proposal in November 2015 (final decision in December 2015), is this change inevitable? After our own February 2015 article, we saw that Malcolm Turnbull – as the Minister for Communications – was suggesting that stamp prices would become $1.  Now as Prime Minister, I seriously doubt that the new Communications Minister, Mitch Fifield, will go against his new boss, especially as he is not only Minister for Communications, but also Minister for the Arts and Minister Assisting the Prime Minister for Digital Government.

A 43% bump in BPR sees over 70% increase in some business services

Australia Post’s draft notification to the ACCC indeed sees an increase of nearly 43% in the BPR, however the only percentage price increase Australia Post are showing for business services is in relation to their October 2015 price increases which still aren’t in effect.

A large majority of business mail goes as PreSort Letter: Small (eg. DL envelope under 5mm thick).  The Document Institute has delved further and looking at the Priority delivery timetable for both Same State and Other State Barcoded direct trays, we see a proposed increase in January of over 62% from the March 2014 increases, and more than 70% for Barcoded and Unbarcoded Residue. Some services have increased by nearly 100% since April 2013!

Anecdotal evidence we have gathered is that over 70% of business mail has stayed (??) on the Regular service – opting for the 2 day slower service than paying the extra for Priority – however our research still shows that the proposed PreSort pricing will see an increase for Small letters of 50% to nearly 53% since March 2014 in January, about 80% since April 2013!

Calculating the impact

To assist in calculating the impact that the October changes and proposed January 2016 changes will have on yours and your customers’ postage, The Document Institute have created price comparison tables for both the PreSort Letter Service and the Print Post Service. Available for download here:

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