Australia Post’s parcel deliveries hit a record in pandemic’s online shopping boom

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A surge in pandemic-driven online shopping during the COVID lockdowns and a busy Christmas period have helped Australia Post report the highest-ever volume of parcel deliveries in its history.

On Wednesday, the national postal service said its revenue for the six months to the end of December had risen 10.4 per cent to $4.8 billion. This was driven entirely by a 13.6 per cent surge in its parcels and services division, which reported revenue of $3.87 billion.

Australia Post has struggled to keep up with deliveries amid record parcel volumes, but the letters business keeps vanishing.Credit:Jason South

The surge in parcels was offset by the struggling letters business, which has been in a state of decline for years as Australians send fewer and fewer letters. Revenue for the division dropped 1.2 per cent to $935 million for the half, and it reported a loss of $69.9 million.

Despite this, Australia Post’s overall profits climbed 20.3 per cent to $199.8 million for the period – though the company said the gain was driven largely by asset sales, property revaluations and favourable bond movements rather than a direct improvement in its operational performance.

Costs increased by 13.2 per cent, reflecting the strain placed on the postal service by the record-high number of parcels and the Delta and Omicron outbreaks, which required thousands of staff members to isolate and caused a labour shortage.

Australia Post boss Paul Graham said the result was strong given the continued disruption to operations caused by the pandemic.

“Just like many businesses around the country, we have dealt with unprecedented challenges over the past year, but the ability of our people to adapt during ongoing challenges presented by the COVID-19 pandemic has been nothing short of remarkable,” he said.

Head office costs declined by $17.2 million over the half, though overall expenses at the organisation rose by 10.2 per cent, again due to COVID-related issues.

For the June half, Australia Post expects parcel volumes to decline as retail conditions normalise and COVID case numbers ease, reducing consumers’ need for home isolation. This decline, alongside an expected loss from the letters business, will likely lead to an overall loss for the second half, the company flagged.

However, Australia Post still expects to report an overall “modest” profit at its full-year results in September.

More to come.

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