Commitment
Australia Post Annual Report
2002/03
Contents
01 Highlights04 About Australia Post 06 Chairman’s report
07 Managing Director’s report 08 Financial results
10 Post at a glance
14 Letters
20 Parcels and logistics 24 Retail and fi nancial services 30 Responsibility
38 Human resources 42 Senior management 44 Board of Directors 46 Corporate governance
49 Financial and statutory reports contents 50 Financial statements
84 Community service obligations 90 Statutory reports
96 Statistical summary 102 Index
02/03 Highlights
Target
Performance
• Revenue base of $3.97 billion.
• Profi t before tax of $387.3 million. • Return on average assets of 13.4 per cent. • Revenue base of $3.97 billion.
• Profi t before tax of $462 million.
• Return on average assets of 14 per cent.
• Meet all performance standards, including: – 94 per cent of standard domestic letters delivered early or on time. – Maintain 4,000 outlets (2,500 in rural areas). – Maintain 10,000 street posting boxes.
• Increase the average number of customer transactions in Post outlets. • Met or exceeded all performance standards, including: – 96.5 per cent of standard domestic letters delivered early or on time. – 4,493 Post outlets (2,588 in rural areas). – 15,139 street posting boxes. • Served an average of 1.09 million customers in Post outlets each business day (up from 1.06 million customers per day last year).
• Reduce lost-time injury frequency rate (LTIFR) to 13.
• Achieved a record low LTIFR of 12 lost-time injuries per million work hours (compared with 14 last year).
• Reduce greenhouse gas emissions by 5.3 per cent. • Greenhouse gas emissions reduced by 8.34 per cent (or 28,806 tonnes of CO2 equivalent).
02/03 Performance
against targets
E nv ir o n m en t Pe o p le C u st o m er s• Earned a record net profi t of $330.8 million ($297 million last year). • Delivered a record
high 96.5 per cent of standard domestic letters early or on time (96 per cent last year). • Handled 5.26 billion
mail articles and serviced 9.4 million delivery points. • Completed the construction of new parcel processing centres in Melbourne and Sydney. • Expanded business banking services through giroPost to 494 outlets (from 320 last year). • Commissioned
three of the eight new machines that will automate the processing of large letters. • Received rating
as the number one company for employee management in the 2002 Good Reputation Index.
“We’re committed to
maintaining our position
as a trusted and reliable
service provider for the entire
community, while adapting
to meet the needs of our
changing markets.”
Linda Bardo Nicholls
Chairman, Australia Post.
03
Finan
ci
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONS
02/
5.45 P.M.
SUSSEX STREET,
SYDNEY,
NEW SOUTH WALES.
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONS
Post’s fl eet of red vans is a distinctive and constant presence on Australian city and suburban streets. Throughout the day, they visit businesses
collecting bulk mail lodgements and delivering orders of offi ce and postal products.
By late afternoon, Post’s drivers weave through traffi c clearing mail from thousands of street posting boxes in preparation for sorting and delivery.
\03
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONS
COMMITTED
TO THE TASK
Our business
Australia Post is a government business enterprise (GBE) operating under the Australian Postal Corporation
Act 1989. The corporation is
self-funding and makes the best use of its assets and resources in order to earn profi ts to reinvest in the business. Post is also charged with meeting a number of community service obligations that require the corporation to provide an accessible, affordable and reliable letter service for all people in Australia, wherever they reside. The corporation employs 35,427 full-time and part-time staff, operates 4,493 post offi ces, serves 1.09 million customers in its outlets every business day and services 9.4 million delivery points.
History
Australia Post’s origins can be traced back to 1809, when former convict Isaac Nichols was appointed as the nation’s fi rst postmaster and opened a post offi ce in his home in George Street, Sydney.
The corporation’s formal commercial origins lie in the fi rst postal act of 1825, which enabled the New South Wales governor to fi x postage rates and appoint postmasters outside of Sydney. With the Federation of Australian colonies in 1901, a nationally integrated Postmaster General’s Department (the PMG) was established, with responsibility for the nation’s mail and telephone services.
This service operated until 1975, when the Federal Government separated responsibility for telephone and mail services by dividing the PMG into the Australian Postal Commission (Australia Post) and the Australian Telecommunications Commission (formerly Telecom, now Telstra). The Australian Postal Corporation Act
1989 made Post a GBE with a board
of directors and a charter to operate commercially while meeting a range of community service obligations.
During the 1990s, Post embarked on a number of major change programs designed to improve commercial performance and profi tability. These included overhauling the corporation’s network of post offi ces (Retail Post) and the mechanisation of mail processing (FuturePost).
Strategy
Post’s business strategy is threefold: • Extend and defend the core
business (letters, parcels and retailing).
• Establish leadership positions in substitute markets and activities with growth potential (such as electronic bill
presentment and payment). • Leverage core competencies (for
example, the establishment of an integrated logistics service). Post seeks to maximise the power of its brand, which represents trust, integrity and reliability, and build on its core competencies to create products and services that meet consumer and business customer needs.
04/
As the nation’s oldest continuously running commercial organisation, Australia Post
has a long history of serving the Australian community. Today, Post is a progressive
and commercial government business enterprise that is committed to providing
an accessible, reliable and affordable postal service for all Australians.
Core markets
Australia Post operates in three main markets: letters, parcels and retailing.
The letters market: The collection,
processing and distribution of letters to the whole Australian community, and between Australia and overseas.
The parcels market: The collection,
processing and distribution of parcels to the whole Australian community, and between Australia and overseas. Post is leveraging its core competencies in parcels handling by offering an integrated logistics service for business customers.
The retailing market: The provision
of a wide range of postal products and services, as well as products that are complementary to postal services, including a wide range of fi nancial services.
Products and services
In these core markets Post offers a broad range of products and services, such as:• delivery services, including nation-wide letter and parcel delivery and a courier service
• retail products, including stationery, Postpak, greeting cards, gifts, philatelic stamps, coins, and communication products (including mobile telephony) • fi nancial services, including bill payment, banking, money orders and other third-party agency services
• integrated logistics and fulfi lment services
• mailroom management services, including data capture and information logistics • third-party data processing,
including credit management for major logistics customers • direct marketing and database
management services.
Values
Australia Post’s corporate values provide the foundation for the Code of Ethics and guide the thinking, decisions and actions of staff.
The values are:
• being committed to customers • recognising and developing the
capability of our people
• sharing business understanding • ensuring participation and
involvement
• creating and maintaining a safe and healthy work environment • being open and fair
• setting high standards • being accountable
• acknowledging achievement • encouraging fl exibility
and adaptiveness.
06/
CHAIRMAN’S
REPORT
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONS
Strategic Direction
“Australia Post continues to prove that it is a resilient, robust and
enterprising corporation. In 2002–03, Post delivered impressive
results as both a commercial operation and a service provider for
the entire Australian community. These strong results are founded
in our adherence to a very clear and effective business strategy.”
Strategy
While our business becomes increasingly complex and diverse, our strategy remains simple – it is to defend our core markets and extend into complementary or substitute business areas where there is the potential for growth and profi ts. In essence, Post is focused on three core commercial activities:
• delivering letters • handling parcels • operating post offi ces.
Letters
The letters market is a constantly changing environment, increasingly affected by electronic substitution and the consolidation of transactional business mail. We anticipated these challenges in the mid-1990s when we embarked on our major change program, FuturePost, to reduce mail-processing costs, improve productivity and ensure that physical mail remains a price-competitive option in the messaging market. This year marked another milestone in that change program, with the commissioning of world-leading equipment that automates the sorting of large letters. We are confi dent that any future volume growth in letters will be driven by direct mail, so we established a Mail Marketing Unit during the year to work in partnership with direct marketers to enhance the value of mail as an advertising medium. We’ve also extended the letters business by leveraging our expertise in mailroom management. Decipha, our joint-venture company with Pickfords, specialises in electronic mailroom management services, thereby
positioning Post in complementary and substitute letters markets, including electronic data capture and information logistics.
Parcels and logistics
The parcels market is international – and vigorously competitive. Post has no reserved service in parcels, but we are the leading provider from business-to-consumer and from consumer-to-consumer – and we are developing capability to handle niche segments of the business-to-business parcels market.During the year, we made major investments in new parcel facilities that will reduce our parcel processing costs, deliver improved service performance and equip us to manage future volume growth. The restructure of our parcels network will also position Post to seize opportunities in the expanding parcels market between large businesses and small to medium-sized enterprises. The development of logistics and fulfi lment capabilities is a crucial element of our parcels growth strategy. Post Logistics continued to mature as a business in 2002–03, winning major new contracts and making a small but important contribution to growth in parcel volumes. The challenge remains to provide more fl exible, customer-focused solutions in all of our parcels and logistics services.
Post offi ces
Post’s improved commercial and customer focus is clearly evident in the changes to our nationwide network of post offi ces. Over the past decade, our post offi ces have been transformed into modern, profi table, sales-oriented retail outlets. Signifi cantly, this commercial transformation was
achieved without sacrifi cing Post’s reputation as a trusted and reliable provider of community services. Our network of 4,493 post offi ces (2,588 in rural and remote areas) is now recognised as a convenient nationwide provider of agency services for third parties, especially bill payment and banking services.
We continued to enhance the product and service mix in our outlets during the year. We introduced more real-time, on-line transactions, such as the Western Union Money Transfer service; we conducted trials of catalogue-based sales; and we expanded business banking services, especially in rural areas.
Thank you
Post’s strong results refl ect the corporation’s collective ability to anticipate the future and adapt to changes in our core markets. Thank you to my fellow board members for your outstanding contribution to setting Post’s objectives, strategies and policies throughout the year. Of course, good business strategy is effective only when properly implemented. For that, I thank Post’s management and staff for your hard work, loyalty and commitment. Our 2002–03 results are a credit to all of you.
Linda B Nicholls,
Chairman.
®
Transfer service; we conducted trials ®
\07
MANAGING
DIRECTOR’S
REPORT
The Year in Review
“Our committed team of 35,427 staff have embraced change
and positioned our business to be highly effi cient, competitive
and customer focused. In 2002–03, Australia Post met all of its
community service obligations, achieved another record profi t
and continued to expand into new and exciting areas.”
Financial results
Once again Post delivered fi rst-class service to Australian businesses and the community, while achieving impressive fi nancial results. The corporation recorded a pre-tax profi t of $462 million (compared with $407 million last year) on total revenue of $3.97 billion ($3.81 billion last year). This represents a return on revenue of 11.6 per cent.
The fi nancial result refl ects our continued focus on reducing costs through rationalisation of the mail processing and delivery network and improved revenue in each of our three core business areas: letters, parcels and retail.
Committed to the community
We are particularly proud to have met or exceeded every commitment under our customer service charter in 2002–03. This charter outlines the service standards that our customers can expect from us, including access to the postal network, the minimum number of lodgement points and the frequency and timeliness of delivery, as well as price and complaints handling. The service charter also promises “consistently professional and high-quality service”. Our strong record of delivering on this promise is the reason that our corporation is regularly rated among the most trusted and reputable organisations in the country. In the Good Reputation Index, published in Fairfax newspapers, Post has been rated fi rst (in 2001) and second (in 2002) out of Australia’s top 100 corporations. More recently, Grey Advertising’s “Eye on Australia” survey found Post to be the most trusted commercial organisation in the country.Qualities such as “trust”, “integrity” and “reliability” are not just corporate clichés at Post – they defi ne our brand and are the foundation of our commercial success.
Reliability and value
One expression of our commitment to customers is the enormous improvement we’ve been able to achieve in the reliability of mail delivery. Over recent years we have invested over half a billion dollars in restructuring our mail processing network and conducted a concerted campaign to improve mail streaming and delivery processes across the business. As a consequence, on-time mail delivery performance is now at an all-time high. We delivered 96.5 per cent of domestic letters on time or early in 2002–03 – well above the 94 per cent required under our community service obligations. This improved performance has been accompanied by greater value. Over the past decade, the cost of bulk transactional mail for our business customers has decreased by approximately 10 per cent, compared with total infl ation for the same period of around 30 per cent.
Managing change
Our business has initiated continuous change since corporatisation in 1989. We are now adept at managing major change programs and communicating clearly with staff about the need for, and implications of, progress. Our staff have become receptive to change because they know it is a necessary part of strong fi nancial results and continuing job security. They also know that we embark on change only if it is necessary for the future success of the business.
During the year, we made important progress in several major change programs, including the construction of new parcel-handling facilities and the commissioning of the fi rst of our world-leading large letter processing machines.
These major change programs will continue in 2003–04, equipping our business with the most technologically advanced mail-sorting machinery in the world. We will also overhaul our major international mail gateway facilities and establish new warehouses for Post Logistics. In Retail, we will establish new outlet formats and enhance our product and service offering to attract even more customers.
Thank you
I recently marked my 10th year as managing director of Australia Post. During that time our people have transformed the corporation by adopting a common focus on outstanding customer service. This has involved improving our processes, broadening the product and service mix, modernising our retail network and implementing major technology-based infrastructure programs. I feel fortunate to have been at the helm during a period of signifi cant change, and to have led such a highly talented and committed team of people. Thank you to all our management team, staff, suppliers, business partners and customers for your continuing contribution to our great business.
Graeme T John,
Managing Director.
08/
FINANCIAL
RESULTS
Operational effi ciency improvements, price changes in the letters
business and growth in retail product revenue were the key factors
contributing to Australia Post achieving record fi nancial results.
The pre-tax profi t of $462 million was $54.8 million (or 13.5 per cent)
higher than the previous year.
Performance
The 2002–03 fi nancial year refl ects the underlying fi nancial strength of the corporation. This was a relatively stable year in comparison to recent years, when the corporation’s trading performance had been affected by a series of one-off events, such as the transitional costs of the FuturePost network renewal program, Year 2000 compliance, the introduction of the GST, the Sydney Olympics and September 11. Improved return on revenue performance was a highlight of the year, with the fi gure increasing to 11.6 per cent (10.7 per cent last year). This is the largest growth in return on revenue recorded since 1992–93.
A notable event in 2002–03 was the fi rst increase in the basic postage rate (BPR) in 11 years, with the price of the domestic stamp rising from 45 to 50 cents on 13 January 2003. This increase was necessary to offset the rising costs associated with providing the basic letter service. The increase in the BPR and associated price changes, as well as volume growth in non-mail products and services, drove revenue growth of 4.3 per cent.
Of the additional $165.3 million of revenue generated during the year, more than 60 per cent relates to volume growth in non-mail products and services. Retail product revenue continued to enjoy strong growth, primarily driven by product extensions in communications and offi ce supplies. Annual productivity improvement of 3.8 per cent is the result of a range of initiatives, including mail centre rationalisation in New South Wales and Victoria and ongoing organisational restructuring.
A new division, Corporate Infrastructure Services, was created during the year to enhance procurement processes and realise cost savings from the vast number of supply contracts operating across the business.
The record profi t of $462 million enables Australia Post to continue its high level of dividend returns to the Commonwealth. Assuming a normal distribution of 60 per cent of the corporation’s after-tax profi t, ordinary dividends declared from the 2002–03 result are expected to total $200.2 million. A special dividend of $104.1 million was also paid on 30 June 2003.
Capital expenditure
Capital expenditure increased by $64.7 million during the year to $209.1 million. This increase refl ects Post’s investment in strengthening core business infrastructure following 2001–02, when mail network stabilisation was the corporation’s priority.
Investment was dominated by two major mail network projects – the large letters restructure and the parcels restructure. Investment in state-of-the-art large letter sorting equipment and the creation of a world-class parcels network represents the fi nal phase of the FuturePost network renewal program. Both of these projects are well advanced and their completion will enable the corporation to sustain existing operations while achieving continuing operational effi ciencies. Other signifi cant expenditures relate largely to investment in replacement assets, including motor vehicles ($38.1 million), information technology ($36.8 million) and facilities
infrastructure ($37.8 million).
Cash management
Key balance sheet and cash fl ow indicators highlight the underlying strength of the corporation and its ability to fund expansion for future growth. The corporation’s current gearing of 28.7 per cent is modest and its liquidity ratio remains positive at 1.1. The corporation is confi dent that capital expenditure in 2003–04 can be fully funded with cash from operations and existing cash balances. With the gearing level low, the corporation is well placed to take advantage of any new business opportunities.
Outlook
Growth in revenue and profi t is forecast to continue. While volume growth in the letters business is expected to remain stable in the short term, Post is implementing initiatives to stimulate demand for direct mail as this is seen as a potential growth area.
The corporation’s investment in upgrading the parcels network is aimed at unlocking the potential for growth in the parcels and logistics business. Post aims to achieve near double-digit growth in retail products in 2003–04. There will be a focus on extending the product range and trialling new retail outlet formats that provide specialised services to small and medium-sized businesses.
Note: Australia Post has initiated the fi rst
phase of its International Accounting Standards (IAS) conversion process, with the completion of an IAS Impact Assessment Report in May 2003. The corporation expects to fully comply with the standards, with the fi rst full year of implementation being the year ended 30 June 2006.
\09
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONSFIVE-YEAR TRENDS
YEARS 1999 2000 2001 2002 2003
Revenue ($m) 3,505.9 3,785.8 3,766.4 3,806.6 3,971.9
Profi t before tax ($m) 373.0 391.9 402.1 407.2 462.0
Profi t after income tax ($m) 247.8 259.5 274.5 297.0 330.8
Return on revenue (%) 10.6 10.4 10.7 10.7 11.6
Return on average total assets (%) 13.8 14.0 13.4 12.9 14.0
Debt to debt plus equity 35.3 32.3 32.2 31.7 28.7
Ordinary dividend payable ($m) 148.7 155.7 164.7 175.1 200.2
Interest cover 15.8 13.3 13.1 15.3 16.7
Cumulative labour productivity improvement (%) 5.1 11.7 16.2 18.7 23.3
Mail volumes (million)* 4,911.8 5,203.7 5,258.4 5,281.2 5,261.7
*
To give a more accurate indication of mail volumes, unaddressed advertising mail handled by Post has been included in the total this year. Volumes for previous years have been adjusted accordingly.ONGOING LABOUR PRODUCTIVITY
IMPROVEMENTS (% ILLUSTRATING
FIVE-YEAR CUMULATIVE GROWTH) STRONG OPERATING PROFIT BEFORE TAX ($ MILLION) STRONG REVENUE GROWTH ($ MILLION)
RETURN ON ASSETS
IN LINE WITH EXPECTATIONS (%) MAIL VOLUMES (MILLION)
STRONG ORDINARY DIVIDENDS DRIVEN BY EFFICIENT
POST
AT A GLANCE
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONS
10/
KEY PRODUCTS AND SERVICES
KEY STATISTICS
Ordinary letters, International letters,
PreSort letters service, Print Post
(publications), Unaddressed Delivery
Service, Registered Post, Reply Paid,
Clean Mail, Charity Mail.
Letters-related services, including
EDI Post, Geospend Direct, Response
Post, Addressing Services and
Mailroom Solutions.
•
96.5 per cent of standard
domestic letters delivered early
or on time.
•
Domestic letter volumes down by
0.3 per cent.
•
Addressing Services supported
1.65 million Australian households
that changed address.
•
•
•
•
•
•
•
•
•
Ordinary parcels, eParcel, EMS
International Courier, Cash on Delivery.
Express Post, Express Post Platinum,
Express Post Two-Way Envelope, Express
Post eParcel, Express Post International.
Other parcels and logistics-related
services, including Messenger Post
Couriers, Post Logistics and Post
Fulfi lment Online.
•
Delivered 96.7 per cent of large parcels
and 95.6 per cent of small parcels early
or on time.
•
Domestic parcel volumes
increased by 3.2 per cent.
•
Post Logistics fulfi lled an average
of 11,300 orders each day
(8,400 previously).
•
Post Fulfi lment Online processed
a 300 per cent increase in
customer orders for Coles Online.
•
•
•
•
•
•
•
•
•
•
Full range of mail-related products
(including post offi ce boxes); philatelic
merchandise (collectable stamps and
coins); communications products
(mobile phones, mobile recharge, fi
xed-line handsets and phone accessories);
greeting cards, packaging, gifts,
stationery, computer-related supplies,
and general merchandise.
Financial services, including banking
(giroPost), bill payment (Postbillpay),
travellers cheques, money transfer and
other third-party agency services.
•
Operated Australia’s largest retail
network with 4,493 Post outlets,
including 2,588 in rural and
remote areas.
•
Served an average of 1.09 million
customers every business day.
•
Handled 33.7 million giroPost
banking transactions.
•
Processed 171 million
Postbillpay transactions.
•
•
•
•
•
•
•
•
•
•
•
Le
tte
rs
P
ar
ce
ls
an
d l
og
is
tic
s
R
et
ai
l an
d
fi n
an
ci
al s
er
vi
ce
s
•
Handled 5.26 billion mail articles
(letters and parcels) and serviced
9.4 million delivery points.*
•
Total mail volumes (letters and
parcels) decreased by 0.4 per cent.*
* Unaddressed advertising mail has been included in the total mail volume fi gure this year. The previous year fi gure has been adjusted accordingly to calculate the percentage change in total mail volumes.
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONS
\11
HIGHLIGHTS
REVENUE
OUTLOOK
•
•
•
•
Smooth implementation of
the fi rst increase in the basic
postage rate for 11 years.
•
Won the Customer
Service Award at the World
Mail Awards for letter
barcoding initiatives.
•
Commissioning of the
fi rst three large letter
sorting machines.
•
Introduced two new bulk
mail categories – Clean
Mail and Charity Mail.
•
Domestic letter
revenue increased by
2.4 per cent.
•
Revenue from
mailroom services
increased by
23 per cent.
•
Letter volumes expected to
stabilise with potential
for growth in direct mail.
•
The commissioning of fi ve
more large letter machines
will complete the large
letter restructure.
•
Expected growth in
mailroom services, with
new technology-based
services offered through
Post’s joint-venture
company, Decipha.
•
•
•
•
•
Began parcels restructure
with construction of new
facilities in Melbourne and
Sydney and extension of
Brisbane facility.
•
Parcel contractors equipped
with handheld barcode
scanners, enabling Post
eParcel customers to track
delivery status on Internet.
•
Post Fulfi lment Online signed
an expanded fi ve-year
contract with Coles Myer,
with added responsibility
for inventory management
and fulfi lment.
•
Domestic parcels
revenue up by
7.1 per cent.
•
Post Logistics
revenue increased by
92.8 per cent.
•
Messenger Post
Couriers revenue
increased by
53.9 per cent.
•
The parcels restructure
will be completed with
the commissioning of three
parcel handling machines
in Sydney, Melbourne
and Brisbane.
•
Post’s international mail
gateways will be upgraded.
•
Growth in Express Post
through enhanced
product features.
•
Continuing growth in
Post Logistics and Post
Fulfi lment Online.
•
•
•
•
•
Another 174 Post outlets
began offering business
banking services, taking the
total to 494 outlets.
•
Western Union Money
Transfer
®was added to the
range of fi nancial services.
•
The number of Postbillpay
telephone transactions
increased by 84 per cent.
•
Established Licensee
Advisory Councils to improve
partnership with licensed
post offi ce operators.
•
Total retail revenue
increased by
8.1 per cent.
•
Revenue from
fi nancial services
increased by
4 per cent.
•
New agency services
will be facilitated by Post’s
real-time, point-of-sale
counter technology.
•
Growth in business
banking, as more Post
outlets offer the service.
•
Expansion in the range
of prepaid communications
products and services.
•
Some new and different
formats for Post outlets.
•
Expansion of the retail
product range.
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONS AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONS
NO 1
12/
5.15 P.M.
SYDNEY WEST
LETTERS FACILITY,
STRATHFIELD,
NEW SOUTH WALES.
COMMITTED
NO 1
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONS AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONS
\13
The processing of mail by machines that can read addresses is
revolutionising mail handling in Australia. In the late-1990s, Australia Post embarked on its FuturePost program to equip its mail centres with world-leading machinery that
automated the address reading, sorting and handling of small letters. In 2002–03, three new purpose-built machines were commissioned to automate large letter processing. The program to overhaul Post’s mail processing equipment will be
completed in 2003–04, with the commissioning of another fi ve large letter machines and the installation of three new parcel-sorting machines in Melbourne, Sydney and Brisbane.
COMMITTED TO
RELIABILITY
Letters.
Post demonstrated its commitment to customers by
achieving record on-time delivery of letters in 2002–03.
The year also saw important progress in a range of major network
change programs that will reduce costs and position the letters
business for improved reliability and effi ciency into the future.
14/
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONSCommunity
Service Obligations
Post is strongly committed to serving the entire Australian community. Details of the corporation’s community service obligations (CSOs) are set out in the Australian Postal Corporation
Act 1989. Under the CSOs, Australia
Post is committed to providing an accessible standard letter service to all Australians at a uniform price. To ensure that these obligations are met, the corporation is required to achieve a number of performance standards relating to public access to the postal service and frequency and reliability of mail delivery. An annual independent audit is conducted to assess Post’s performance against these standards. In 2002–03, Post met or exceeded all of the performance standards relating to its CSOs. For more information about the CSOs, see pages 84–89.
Delivery performance
Recent delivery performance gains were consolidated during the year. For the second consecutive year, Post delivered at least 96 per cent of standard domestic letters early or on time – well in excess of the 94 per cent standard required under Post’s CSOs. The 2002–03 result of 96.5 per cent (following 96 per cent in 2001–02) is the best result since independent auditing of delivery performance began in 1993. In just the second year of bulk letter monitoring, Post delivered 97.1 per cent of bulk letters early or on time (96.6 per cent last year). Undertaken by KPMG and certifi ed by the Australian Bureau of Statistics, the bulk letter monitor measures Post’s delivery performance for barcoded mail in the PreSort letters service.The substantial improvement in delivery performance refl ects the benefi ts of new small letter processing equipment introduced under the FuturePost program, as well as the sustained focus on performance improvement issues throughout the business.
In 2002–03, Post processed 2.5 per cent more small letters by machine, rather than manually, and increased the number of letters sorted directly to postal delivery rounds to 65 per cent (previously 60 per cent). Post developed new and effective mail processing diagnostic tools and adopted a co-ordinated national approach to analysing and improving end-to-end mail paths.
Letter volumes
Following healthy growth in letter volumes throughout the 1990s (averaging almost 5 per cent), letters volume growth remained fl at for the third consecutive year. Domestic letter volumes decreased marginally (by 0.3 per cent) but letters revenue increased slightly (by 2.4 per cent), mainly as a result of the fi rst rise in the basic postage rate in 11 years.
Changes affecting transactional mail (such as bills) and promotional mailings (direct mail) are the main causes of fl at growth in letter volumes. Transactional letter volumes are being affected by the consolidation and rationalisation of major customer mailings and, to a lesser degree, by electronic substitution. The slowdown in promotional mail is largely due to a cyclical downturn in the advertising market and reduced marketing communications expenditure by major customers.
Future letter volume growth is expected to be driven by promotional mail and Post is currently implementing a direct mail growth strategy, including a dedicated Mail Marketing Unit responsible for promoting mail as an effective and measurable medium for marketing communications (see p. 18).
Price changes
A range of letter price changes came into effect on 13 January 2003, including the fi rst rise in the basic postage rate since 1992. The Australian Competition and Consumer Commission did not object to the price changes after a period of public review. The main change involved a fi ve-cent increase in the basic postage rate for ordinary small letters from 45 cents to 50 cents. During the price “freeze” of the previous 11 years, the Consumer Price Index had risen by over 30 per cent. The price changes aimed to ensure continuing profi tability for Post’s letters business and compliance with community service obligations, against a background of slowing volume growth and anticipated lower levels of productivity improvement in the future.
THE PRICE OF A BASIC POSTAGE STAMP
(A COMPARISON BETWEEN FIVE DEVELOPED COUNTRIES) Country $AUS price
Australia $0.50
USA $0.51
UK $0.59
France $0.63 Germany $0.77
Sources: OECD and Australia Post. Note: Rates calculated using Purchasing Power Parity.
Letters
Highlights
• 96.5 per cent of standard
domestic letters delivered
early or on time.
• Met or exceeded all
community service
obligations by providing an
accessible standard letter
service to all Australians at
a uniform price.
• Commissioning of
new large letter sorting
equipment.
• Smooth implementation of
price changes, including
the fi rst increase in the
basic postage rate for
11 years.
• Introduced two new
discount bulk mail
services – Charity Mail
and Clean Mail.
• Won the Customer
Service Award for letter
barcoding initiatives at the
2003 World Mail Awards.
Postie John Ritchie (pictured left) is
committed to providing a reliable delivery
service. John works at the Belgrave
Delivery Centre, in the midst (and the mists)
of the Dandenong Ranges, on Melbourne’s
eastern fringe. He delivers to 900 homes
and businesses – mostly located on
winding, hilly, semi-rural roads.
“On wintry days, like this, I wear my
uniform and a couple of sets of wet
weather gear because it can get pretty
uncomfortable out there,” he explains.
“Around here, summer’s defi nitely the
best time to be a postie.”
Regardless of the conditions, or the
obstacles, John and his 35,426
workmates at Post achieved record-high
levels of on-time delivery in 2002–03.
The independently audited result shows
that Post delivered 96.5 per cent of
standard domestic letters early or on
time – well ahead of the corporation’s
minimum target of 94 per cent.
Delivering –
better than ever
9.30 A.M.
POSTAL ROUND,
BELGRAVE,
VICTORIA.
16/
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONSCOMMITTED TO
RELIABILITY
Network transformation
Post’s strong delivery performance result was achieved during a period of major change in the letter-processing network. In Sydney, all mail originating in the region of Sydney North Letters Facility was transferred in October to automated address-reading machines at Sydney East Letters Facility or Sydney West Letters Facility. In Melbourne, network rationalisation resulted in the centralisation of the city’s small letter processing at Dandenong Letters Centre (DLC) and the closure of Melbourne City Mail Centre (MCMC) in April (see p. 41). A dedicated redeployment unit was established to manage the human resources aspects of the Melbourne network restructure and to ensure that staff levels were aligned with operational requirements. This major change program was implemented on schedule and has increased the processing capacity of DLC by 40 per cent.Large letter restructure
Building on the effi ciency gains achieved in the FuturePost program for small letters processing over recent years, Post is now rolling out equipment that automates the address reading and processing of large letters. The $80 million large letter restructure program involves the installation of eight fl at mail optical character reader machines (FMOCRs) at facilities in Sydney, Melbourne, Brisbane, Adelaide and Perth. The FMOCRs feature world-class technology and have been designed and built to meet the needs of the Australian market. The largest FMOCR is 80 metres long and capable of processing up to 24,000 large letters per hour. By 30 June, three of the eight machines had been commissioned andwere processing mail in Melbourne and Sydney. The program is now scheduled for completion in October 2003.
Cost reduction
In line with last year, profi tability in Post’s letters business was partially driven by cost containment measures implemented by the Mail & Networks Division. Among the cost reduction initiatives were the closure of the Melbourne City Mail Centre, the selective diversion of some letter traffi c from air to road transportation, the rationalisation of IT systems and the reduction in manual letter processing and rework.
International letters
Global economic uncertainty, increasing security requirements, the SARS virus crisis and continuing technological substitution all contributed to Post’s International Division recording a 5.1 per cent decline in outgoing international letter volumes.BULK MAIL SERVICES
Barcoding
Barcoding of bulk mail lodgements has delivered a number of customer benefi ts, including access to lower postage prices, greater opportunity for envelope creativity and improved addressing accuracy.
Post’s support for customer barcoding received international recognition in May with its acceptance of the Customer Service Award at the World Mail Awards in Rome. The Awards, which recognise excellence in the global postal industry, acknowledged the program of education and
consultation that Post offered customers to assist in making the transition to printing machine-readable barcodes on their mail. When discounts for barcoded mail were introduced in 1999, Post continued to offer PreSort discounts for unbarcoded bulk mail, but the discounts for barcoded mail were higher to encourage uptake. By the end of the 2001–02 fi nancial year, 73 per cent of customer-lodged PreSort bulk mail was barcoded, enabling rapid processing by Post’s automated address-reading equipment. The Unbarcoded PreSort service was abolished on 1 July 2002. As a result, all PreSort lodgements are now barcoded.
Address matching
and barcode quality
Post offers a range of services to support accurate customer barcoding and correct addressing.The Address Matching Approval System (AMAS) is a certifi cation program for address matching software. Under the AMAS program, 16 companies are now approved to supply address-matching software. This software has improved customer list management and address quality and reduced costly return-to-sender mail.
Other quality assurance services designed to assist customers with barcoding and bulk mail lodgements include the Barcoding Quality Program, Customer Barcode Quality Assurance software, the Mail Piece Testing consultation service and the PreSort Accuracy Testing program.
\17
Le
tte
rs
Mail Quality Management
A central register for identifying any issues related to the presentation of bulk mail lodgements was introduced during the year. Called Mail Quality Management (MQM), this new computer-based system assists with monitoring mail presentation issues until they are resolved in consultation with the customer. MQM can be used to identify and resolve a variety of mail presentation issues, including unreadable barcodes, poor-quality address printing, incorrect address data or envelopes that cannot be read by Post’s letter processing equipment.EDI Post
In 2002–03, EDI Post maintained revenue but increased profi tability by 84 per cent, mainly by reducing costs. EDI Post specialises in the electronic acceptance, preparation and printing of invoices, statements, accounts, cheques and direct mail from high-volume business mailers.
Post eLetter, EDI Post’s desktop mail service, produced strong growth, particularly over the last six months of the year. The service enables the transmission of large-quantity letter lodgements from the customer’s computer to Post for printing, barcoding, sorting, enveloping and posting. Customers using Post eLetter have reported substantial cost reductions and improved effi ciency for mail that had previously been processed in-house. EDI Post also introduced a digital colour-printing platform in 2002–03 that supports the production of Personalised Stamps and personalised, full-colour direct mail. The Personalised Stamps application is attracting interest from a number of overseas postal authorities.
Australia Post’s sales representatives have always worked
closely with major customers to assist with bulk mail
lodgements, but there has been an added technical
dimension to customers’ bulk mail since the introduction of
Post’s new letter-processing equipment and barcoded mail
in 1999. For Post, barcoded mail has enabled vast
improvements in the effi ciency and accuracy of letter sorting.
Attaching barcodes to their bulk letter lodgements has given
major businesses and organisations access to discounted
postage rates and greater delivery accuracy.
Post’s South Australian sales manager Midel Ball (pictured
above, right, with Sophia Kollaris from Centrelink) is part of
a nationwide team of staff who have worked co-operatively
with major customers to improve addressing and barcoding
accuracy while reducing the cost of customer mailings.
Australia Post has supported this team by creating a range
of programs and initiatives designed to assist major mailers
with the technical aspects of barcoding their mail.
The overall customer barcoding program (combining
education, consultancy and technical support) received
international recognition in Rome during May, when Australia
Post was presented with the Customer Service Award at the
World Mail Awards.
4.00 P.M.
ADELAIDE MAIL CENTRE,
ADELAIDE, SOUTH AUSTRALIA.
COMMITTED TO
RELIABILITY
Clean Mail
A new discount bulk mail service for small and small-plus letters was introduced as part of the price changes on 13 January 2003. Clean Mail was designed for customers who do not barcode or pre-sort their mail but can present machine-addressed letters suitable for processing by Post’s mechanised equipment. The minimum requirement for a Clean Mail lodgement is 300 letters of the one size from the same sender. Customers who meet the Clean Mail requirements receive a discounted rate of 45 cents per letter for small letters and 70 cents for small-plus letters (a new bulk letter category for C5-sized envelopes).
Charity Mail
A new category of bulk mail, called Charity Mail, was introduced on 1 July 2002 to ensure that the fundraising industry was not disadvantaged by the removal of the lower postage rates for direct mail. Special prices for advertising mail (AdPost prices) were withdrawn in January 2003. By registering for Charity Mail, eligible charities can retain the discounted rate under the barcoded PreSort service for small letters. By 30 June, 770 fundraising organisations had registered for access to Charity Mail for their bulk mail lodgements.
DIRECT MARKETING
SERVICES
Mail Marketing Unit
In early 2003, Post established a dedicated Mail Marketing Unit (MMU) to encourage the use of direct mail as a marketing communications medium. The Unit is building on the initiatives ofPost Direct by providing an expanded range of information, research, training and education services for marketers and the direct marketing industry. The Unit is also encouraging and promoting best practice standards, developing new products and services and offering a range of sponsorships to the direct marketing industry. The MMU has launched a mail marketing website that provides extensive information and case studies to help and support users of direct mail (auspost.com.au/mailmarketing).
Geospend Direct
Geospend Direct, Post’s list rental and customer profi ling business, increased its share of the list acquisition market during the year but overall revenue was lower due to a tighter direct mail market. Geospend Direct’s core asset, the Selecta lifestyle database, is one of the most comprehensive lifestyle databases in Australia. Built from voluntary responses to the Australian Lifestyle Survey, the database contains the demographic, lifestyle and product preferences of over 2 million Australians (1.5 million of which are rentable for direct marketing purposes). In 2002–03, an additional 450,000 individuals were added to the database. Geospend Direct clients are experiencing response rates of up to 15 per cent on their direct marketing campaigns using address lists built from the Selecta database. In 2002–03, Geospend Direct data contributed approximately 2 per cent of the total volume of promotional mail in Australia.
Addressing Services
In 2002–03, Addressing Services supported more than 1.65 million Australian households that changed address – and, as a result, recorded a 10 per cent increase in revenue.
Addressing Services provides a range of services to help households and businesses that are moving address – and helps businesses affected by customer moves. The range of services includes Mail Redirection, Mail Holding, Address Notifi cation, National Change of Address, mover’s marketing and related services offered via the website, auspost.com.au/ movingservices. Post’s Mail Redirection Service continued to be the biggest revenue earner for Addressing Services, and the number of organisations using the National Change of Address service (to keep in contact with their customers) increased by 42 per cent.
Response Post
A new service was developed by Post during the year to quickly measure the effectiveness of direct mail campaigns. Called Response Post, the service was trialled by customers in May and June 2003. Response Post automates the processing of response data – including orders, volumes, requests for more information and competition entries – and provides businesses with response data from their direct mail campaigns within 24 hours. The service was offi cially launched in June 2003.
Pureprofi le
Post has moved into the on-line direct marketing business in alliance with Pureprofi le Pty Ltd. The Pureprofi le service enables businesses to send targeted e-mail or SMS messages to potential customers who have indicated their interest in receiving selected offers. More than 72,000 people have signed up for the service and it is achieving average response rates of 62 per cent.
Le
tte
rs
MAILROOM SERVICES
Post’s Mailroom Solutions business provides outsourced mail processing and distribution services for Australia Post clients. Revenue from mailroom services increased by 23 per cent during 2002–03.
The year was also an active one for Decipha (a joint-venture company established by Post and Pickfords in May 2002) as Post mailroom clients began transferring to the new entity and new processing centres were opened in Sydney, Melbourne, Brisbane and Canberra.
Decipha combines Post’s expertise in mailroom management with Pickfords’ expertise in imaging and electronic workfl ow. This combined knowledge enables Decipha to seek technology-based solutions to re-engineer mailroom processes.
THE YEAR AHEAD
Globally, the letters market is seen as a mature market that is not expected to return to the robust volume growth experienced throughout the 1990s. Letter volume growth in Australia is expected to remain stable, with the potential for more moderate levels of growth driven by an increase in promotional and advertising mail. Completion of the large letters restructure will see the commissioning of the remaining automated address-reading FMOCR machines in all mainland State capital cities. The Mail & Networks Division will continue to reduce costs, to restructure and rationalise the letters network and to maintain a strong focus on improving Post’s already high levels of on-time delivery.
In March 2003, Australia Post began the transition to
becoming Westpac’s sole provider of courier and
freight-handling services. For Westpac, which previously used
22 suppliers to provide these services, the new contract
offers simplicity and value. Westpac now receives a single
invoice from Post, with detailed reporting, and uses one
phone number for all bookings and enquiries. When fully
implemented, this simplifi ed, centralised service is expected
to reduce Westpac’s costs by about 20 per cent while
improving delivery reliability to the bank’s 800 branches
and 200 specialist banking centres.
Nearly all of Westpac’s internal mail is now sorted by Post
Mailroom Solutions staff in customised mailrooms (like the
Melbourne-based mailroom pictured above) and delivered
to local branches by Messenger Post Couriers or to interstate
locations overnight by Australian air Express.
Post is now working on improving effi ciency for Westpac by
developing a dedicated reporting portal that interfaces with
the bank’s systems to offer on-line “track and trace”
for couriers.
8.00 P.M.
WESTPAC MAILROOM,
POST MAILROOM SOLUTIONS,
ABBOTSFORD, VICTORIA.
The Westpac contract
COMMITTED TO
INNOVATION
20/
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONSParcels and logistics.
Post’s extensive retail and delivery network
provides the backbone of Parcel Post – the only parcel service to
reach every address in Australia. In 2002–03, Post began building
new parcels facilities to reduce processing costs and position the
business for future growth. The parcels business also continued its
program of innovation with initiatives in Express Post, international
parcels, Post Logistics and courier services.
Parcel volumes
Domestic parcel volumes were 3.2 per cent higher in 2002–03. However, parcel volumes remain slightly lower than the peak recorded in 1999–2000, when a number of one-off, high-volume parcel deliveries by major customers swelled domestic parcel volumes. A decline in the mail-order industry and a downturn in economic activity among consumers and small business customers have also affected volumes.
Delivery performance
Post’s delivery performance for parcels remains high, with 96.7 per cent of large parcels and 95.6 per cent of small parcels delivered early or on time.
Parcels network restructure
A major $120-million project is under way to restructure and modernise Post’s parcel handling and sorting network. The project is critical to the future growth of Post’s parcels business as it will reduce processing costs and help to improve delivery performance. In 2002–03, new parcel facilities were constructed at Chullora (in Sydney) and Ardeer (in Melbourne) and Post’s existing mail centre at Underwood (in Brisbane) was extended to accommodate new parcel-sorting equipment. The mechanisation of these facilities will enable automatic movement of parcels through the sorting process. The largest of the three parcel-sorting machines will be capable of handling 15,000 parcels per hour. The fi rst machine is currently being assembled at Ardeer, with installation of the machines at Chullora and Underwood due to occur in late 2003. The project is scheduled for completion by mid-2004.Parcel Post
Post is committed to providing a reliable, low-cost, nationwide parcel delivery service for consumers and business customers. During 2002–03, Post upgraded technology to improve the parcel receipting and despatch process for customers. The roll-out of hand-held barcode scanners for parcel delivery contractors was completed, enabling electronic signature capture and scanning on delivery for 80 per cent of signature-on-delivery parcel services. These barcode scanners enable Post eParcel customers to access information about delivery scan events and view signatures via a secure website (www.eparcel.com.au). A major upgrade to the Post eParcel software was also launched, enhancing the despatch process for business parcel customers.
Post also began a program to improve the management of parcel contractors. The program, which will continue into 2003–04, addresses issues such as presentation, training programs, performance reviews, remuneration and communication strategies.
Post continued to make inroads into the business-to-consumer parcel market with strong growth in the wine sector, especially consumer deliveries for wineries and large wine clubs, such as Liquorland Direct and Australian Wine Selectors. Parcel Post also increased its presence in the business-to-business market by securing several major contracts, including parcel delivery for Westpac and Yakka.
Express Post
The upgrade of the Post eParcel software enabled parcel tracking and proof of delivery for large-volume users of the Express Post parcel service. Express Post also successfully trialled three- and fi ve-kilogram satchels, which will become available nationally by the end of 2003. Access to the Express Post network was also enhanced in 2002–03, with an additional 65 gold boxes installed, mainly in the Sydney metropolitan area.
International parcels
The volume of international parcels lodged in Australia increased by 1.9 per cent, despite slowing global economic growth and increasing security considerations in the wake of September 11. Post complied with new Federal aviation security requirements by establishing a security clearance procedure to minimise the risk of the carriage of dangerous goods on fl ights leaving Australia. The procedure, which involves the identifi cation of customers lodging international parcels weighing over 500 grams, was implemented just before Christmas with minimal customer disruption or delivery delays. From the introduction of the new procedure, on 16 December, until 30 June, Post staff entered 2,792,000 customer identifi cation records.
\21
Parcels and
logistics
Highlights
• Domestic parcel
volumes increased by
3.2 per cent.
• Delivered 96.7 per cent
of large parcels and
95.6 per cent of small
parcels early or on time.
• Parcels network restructure
in progress, with new
facilities constructed in
Melbourne and Sydney
and the extension of an
existing facility in Brisbane.
• Delivery contractors were
equipped with handheld
barcode scanners that
enable Post eParcel
customers to track
parcel delivery status
via the Internet.
• Messenger Post Couriers
recorded revenue growth
of 53.9 per cent.
• Post Logistics increased its
revenue by 92.8 per cent.
When you live in rural areas of Australia,
retail therapy can be a little less instant
– but not necessarily less therapeutic.
For Lyn Lander (pictured left), a resident
of the Western Australian town of Wagin,
the excitement of a new clothing purchase
involves scanning through an EziBuy
catalogue, making a phone order, then
receiving the goods a few days later.
(EziBuy purchased the Myer Direct
business from Coles Myer in February
2002.) Lyn has used the service to
purchase clothes and household items
since she moved to the country from
Perth 11 years ago.
“I normally buy at least one thing from
each catalogue,” she admits. “You have
to drive a long way from here to go
shopping, so ordering clothes via the
catalogue and having them delivered by
mail is much more convenient.”
Australia Post plays a crucial role in
connecting EziBuy with customers
like Lyn. Post and EziBuy regularly
conduct joint business review sessions to
examine operational issues and consider
new ways of expanding the business
partnership. In 2002–03, Post delivered
5.35 million catalogues and 1.3 million
parcels on behalf of the business.
Rural retail
therapy made Ezi
10.30 A.M.
EZIBUY CUSTOMER’S HOME,
WAGIN, WESTERN AUSTRALIA.
22/
AUSTRALIA POST ANNUAL REPORT REPORT OF OPERATIONSCOMMITTED TO
INNOVATION
Border Agency Program
Post has embarked on a program to upgrade gateway facilities in Sydney and Melbourne for the secure screening and processing of international mail. In 2001–02, Post worked closely with the two border agencies – the Australian Customs Service (ACS) and the Australian Quarantine & Inspection Service (AQIS) – to achieve 100 per cent screening of all in-bound international mail. As part of a commitment to the Federal Government, Post provides facilities and equipment to ensure 100 per cent screening by ACS and AQIS. The mail is screened using acombination of X-ray equipment, detection dogs and physical inspection. The facility upgrades in Melbourne and Sydney are designed to ensure that Post can meet this commitment in the long term. Post is planning the construction of a new Melbourne Gateway Facility at Tullamarine, while the Clyde Parcel Centre will be re-fi tted and will become the Sydney Gateway Facility. Both facilities are expected to be operational in early 2005.
Courier services
Refl ecting Post’s strategy to leverage its core competencies, especially in the area of delivery, Post’s national courier service, Messenger Post Couriers, recorded revenue growth of 53.9 per cent in 2002–03. Messenger Post Couriers now has a presence in all State capitals and Canberra. The ability to offer a national service with transparent pricing and reporting is proving benefi cial for some major customers who prefer a consistent courier service that operates nationwide. In 2002–03, Post won a major national contract to provide courier and mailroom management services to Westpac (see p. 19).
The Messenger Post Courier network infrastructure was strengthened with the roll-out of mobile data technology for drivers that began in May 2003. Using this mobile data technology, couriers can collect signatures and scan barcodes or consignments at each stage of delivery, thus verifying pickup and delivery events in real time. The hand-held computers have improved the accuracy and timeliness of information about job progress and enable customers to view up-to-date consignment details via the Internet.
LOGISTICS SERVICES
Post Logistics
An important part of Post’s business strategy is the growth of the parcels market through the innovative development of add-on services for customers, including logistics services. Post Logistics offers clients integrated logistics and fulfi lment services, including order processing, credit management, warehousing, inventory management, kitting, pick and pack, distribution and returns management services. This range of services can be bundled according to the customer’s requirements. Revenue for the business increased by 92.8 per cent during the year. Post Logistics fulfi lled an average of 11,300 orders per day this year (8,400 previously).
The fi rst full year of the contract for the fulfi lment of Microsoft Xbox was completed in 2002–03. This fourth-party logistics contract involves the total outsourcing of the supply chain process to Post, including purchasing the product for sole distribution. The contract earned greater-than-expected revenue for the year. Post Logistics also secured a major contract
in the apparel market, with the signing of a new warehousing and fulfi lment agreement for Best & Less (see p. 23). Post Logistics established an additional fulfi lment facility in Queensland during the year, in line with the broader corporate strategy to expand the logistics business nationally.
Post Fulfi lment Online
Post provides warehousing, pick-and-pack and delivery of fresh, frozen and dry groceries for Coles Myer Ltd’s Coles Online business in Melbourne and Sydney. In November 2002, Post entered into a new fi ve-year agreement with Coles Myer to expand its services to include inventory management and fulfi lment. (The previous contract involved delivery services only.) In the fi rst six months of the new contract, Post Logistics reconfi gured the two existing Coles Myer warehouses, resulting in a doubling of the throughput volume capacity at both sites. Coles Online is set to expand considerably in 2003–04 following the purchase of Shopfast in June 2003.
OTHER SERVICES
iPrint
iPrint Corporate recorded increased revenue in 2002–03, mainly as a result of taking over the security printing for stamps. Established as a joint venture with wellcom in 2001, iPrint Corporate now manages all of Post’s printing requirements, including the pre-press, printing and distribution of stamps, retail catalogues and publications. Originally formed to reduce the cost of printing within Post, the joint-venture company now provides print
management services to a range of clients, including Gaz Man, Hugo Boss and Dowd Corporation.
corProcure
The redesign of the corProcure business continued in its second year of operation under Post ownership. corProcure provides technology and other services that enable electronic document exchange and procurement services for both internal users and external customers. Forty-three suppliers have been electronically connected to trade with Post through corProcure’s electronic marketplace and the business aims to connect 165 by June 2004.
THE YEAR AHEAD
The completion of the parcels network restructure will reduce parcel processing costs and position the business to manage expected volume growth. New value-added services will be introduced for over-the-counter Parcel Post customers, including parcel tracking and an enhanced insurance service. Post will also pursue opportunities in some niche business-to-business industry sectors.
Express Post will be developed by examining opportunities to expand the network, increasing the number of gold boxes, and providing enhanced product features such as registration/insurance for Express Post Parcels.
Post Logistics will commission new facilities in South Australia, Western Australia, New South Wales and Queensland to accommodate anticipated growth in business.
