TIM PALMER: Australia’s online retailers have noisily objected to overseas competition sparked by a high Australian dollar but now they’re about to get squeezed even more because their costs of delivery are going up. Australia Post’s confirmed significant price rises for its parcel delivery services. Local sellers are outraged, particularly because Australia Post subsidises the postage of parcels sent to Australia.
Simon Frazer reports.
SIMON FRAZER: Delivery costs have been one of many problems faced by Australian online retailers trying to keep up with their overseas rivals but it’s now an issue that’s about to get worse, with Australia Post confirming it’s significantly increasing its parcel delivery charges, in some cases by 30 per cent.
SIMON FRAZER: But, while local online retailers will be slugged by those extra costs, an international treaty means that Australia Post actually makes a loss on parcels sent here from overseas. It’s a problem Liberal Senator Simon Birmingham became aware of during last year’s Estimates hearings.
SIMON BIRMINGHAM: We’re seeing double-digit growth at least in terms of the under-two-kilo parcels – the small parcel size – that are sent into Australia and in that category Post is losing, we’re told, around $50 million per annum in delivering those parcels and there’s nothing they can do, obviously, to recover those costs because they’re tied up in these international frameworks about how the sharing of postal charges is calculated.
SIMON FRAZER: Senator Birmingham says Australia Post is powerless to charge more for the overseas parcels because the prices are set by the Universal Postal Union.
SIMON BIRMINGHAM: What we have is Australia Post delivering, within Australia, parcels from overseas at a loss, yet today we’re seeing them increase the cost for posting parcels within Australia, so obviously there’s some detrimental impacts flowing through to Australian retailers trying to compete.
SIMON FRAZER: I guess it’s fair to say that the international postal landscape has changed a lot since these arrangements were put in place?
SIMON BIRMINGHAM: Well, these are very old arrangements. Unfortunately, time has changed and now there are far more parcels delivered.
SIMON FRAZER: Australia Post says it’s been negotiating with the Swiss-based UPU to get a better deal, but also claims there is no link between it losing money on one part of its business and raising prices on another.