Parcels save Australia Post profits

Performance highlights for the six months to 31 December 2018:

  • Group revenue was flat against last year at $3.6 billion, masking significant changes.
  • Group parcels contributed $1.9 billion, up 9 per cent, adding $25 million in profit.
  • Group letters at $1.1 billion, down 10 per cent, reducing profit by $102 million.
  • Group expenses contained at 2 per cent growth, including $121 million in productivity gains.
  • Reported profit before tax at $154 million, down 36 per cent, included positive one-offs. Profit after tax $118 million, down 45 per cent.
  • Australia Post is expected to make a modest full-year profit in FY19 given the continued impact of letter decline, economic headwinds and seasonality.

Australia Post has announced a profit before tax for the first half of $154 million, down 36 per cent year-on-year. This included $30 million of one offs. Underlying profit before tax was $124 million, down 38 per cent. Group revenue was flat at $3.6 billion.
The largest business segment, domestic parcels, performed strongly with revenue growing by 10 per cent, up $147 million, well ahead of the general retail market, which grew 2.9 per cent in the period. Group parcels profit grew by $25 million to $127 million. In December, Australia Post delivered a record 40 million parcels, up 12 per cent.
All Community Service Obligations were met or exceeded and customer service standards remained high for letters and parcels, including through extreme weather conditions across the country during the Christmas peak.
Group chief executive officer and managing director Christine Holgate said she was pleased with the continued strong performance of the parcels business, however, significant challenges remain for Australia Post with letters revenue now declining at the fastest rate in its history.
“Although we delivered 10 per cent growth in domestic parcels, well in excess of the growth rates of the economy and in a period of very strong competition, this could not make up for the profit decline in the letters business,” Ms Holgate said.
“Letter revenues are down 10 per cent or $125 million, which reduced profit by $102 million in the half.  This is after saving an estimated $50 million in delivery costs as posties carried 40 per cent of our parcels.
“Since the last increase in the Basic Postage Rate in January 2016, more than three years ago, our costs to deliver letters are up 10 per cent. The number of new delivery addresses has increased by 500,000, yet letter volumes have declined by 800 million.
“Australia Post will deliver more than two billion letters to almost 12 million homes and businesses this year. Although it is shrinking, letters is still viewed as a critical service by the overwhelming majority of Australians.”
Australia Post is an entirely self-funding business. Last financial year, Australia Post incurred an estimated cost of $404 million in delivering the letters service in accordance with its legislated community service obligations.
Group expenses were held at two per cent growth in the first half, underpinned by total productivity savings of $121 million. Independent research shows that Australia Post has improved its Total Factor Productivity at twice the rate of the overall economy and reserved letters at three times the rate.
Ms Holgate said the business was also making good progress on delivering on its strategic initiatives including:

  • Securing the historic Bank@Post agreement with CBA, Westpac and NAB, protecting critical banking services in Community Post Offices, particularly in regional and rural Australia. A further seven financial institutions have already committed to new Bank@Post terms: Suncorp, Resimac, Auswide Bank, AMP Bank, Maitland Mutual, Transport Mutual and ME Bank.
  • The first new major agreement with its important licensee partners in 26 years, providing technology and aligning payments to parcels and other growing services.
  • $64 million of investment in the operational network, including new processing equipment in Sydney, Melbourne and Brisbane enabling automated sorting of an additional 100 million parcels.
  • The fastest growing parcel product, Express, expanded in a trial to a further 500 postcodes.
  • Acquisition of remaining 60 per cent stake in Aramex Global Solutions, which provides end-to-end cross-border logistics and eCommerce solutions, supporting the international growth strategy.

“We have invested in both capability and capacity, without which our teams could not have delivered the Christmas Peak.  Our people were exceptional as they delivered through the most challenging weather conditions, including floods, bush fires and hail storms,” Ms Holgate said.
“Our Net Promoter Score with our customers is at a record high and complaints on Australia Post entities to the Postal Industry Ombudsman were down 31 per cent, although we recognise we still have much more work to do.
“The progress we have made against our strategic initiatives, coupled with the unwavering commitment of our extended workforce to serve the community, means we remain confident that Australia Post will play an important role for many years to come.
“Australia Post is on track to deliver a modest profit for the full year, in the face of ongoing market pressures in the traditionally quieter second half. Australia Post will release its full results in August.”

Mettler Toledo launches new parcel and pallet measuring machines

The CSN110 ScanTape from Mettler Toledo is a new handheld mobile
dimensioning device designed to quickly and accurately measure parcels and
pallets anytime.

The palm-sized parcel and pallet measuring machines feature programmable
data capture and easy Bluetooth transfer to reduce human error, save time and
money, and increase productivity.

Mettler Toledo’s convenient new parcel and pallet measuring device, CSN110
ScanTape replaces the traditional tape measure to eliminate manual data entry,
offering greater ease and accuracy for transport and logistics personnel. The time
saving and productivity enhancing capabilities of the measuring device benefit load
planning and revenue recovery in industries where processing volume equals

Usable at any point in goods-transfer processes, ScanTape represents an
efficient, paper-free measuring procedure and finds application in pick-up or
reclassification of pallets or packages to recover revenue in high-volume
situations. The device is also an excellent choice for smaller-volume centres
that want to automate the measurement process without significant monetary

The CSN110 ScanTape parcel and pallet measuring device offers quick ROI
with transport companies quickly recovering the cost of investment as early as
a week or within 90 days depending on use.

Key features of CSN110 ScanTape parcel and pallet measuring device include
robust construction with durable rubber cover; 1.5-metre drop protection; Li-ion
battery for two days of heavy use before recharge; Bluetooth data transfer and
barcode reading capabilities allowing a complete parcel data profile to be sent
wirelessly from a floor, forklift or bench scale to a PDA, PC or printer; data
batched or transferred as captured using live mode; and pre-configurable
workflows further increasing efficiency for repetitive measuring procedures.

Freight facility flagged for Melbourne Airport

Set to be the largest of its kind in Australia, work has started on the 71,000 square metre facility on 20 hectares next to Melbourne Airport.

Toll Group Managing Director Brian Kruger said the investment will help increase the company's online parcel delivery service, Toll Consumer Delivery.

“The custom-designed facility, with its highly specialised sortation system will triple our current parcel sorting capacity in Melbourne to an unprecedented 35,000 parcels per hour,”  Kruger said.

“Given the growth we’re seeing in online retail, it is important we continue to improve our already-extensive national network to make it second to none.”

Kruger said the facility will  help to improvesafety, fleet productivity, parcel sorting speed and accuracy, and energy and cost efficiencies.

“It is Toll’s willingness and ability to invest in state-of-the-art facilities and technology that makes it the industry leader in the express parcel delivery market," he said.

The new facility will employ over 500 people and is expected to be operational by the end of 2015. 

BCS Group wins Toll parcel facility contract

Technology company BCS Group has won the contract to build a specialised sortation system for Toll’s new express parcel sorting facility.

Toll Group is currently building the 53,000 square metre facility in the new Bungarribee Industrial Estate in Sydney’s west.

The project will implement a combination of BCS Groups’ hardware solutions and smart software products Freightflow and SYM3 to provide transparency of the sites operations, as well as tracking and accurate loading information.

The project will enable Toll’s parcels to be sorted and processed at approximately four times the rate as the current system allows on a system that maintains ultimate parcel integrity.

BCS CEO Brad Jackson said the company developed specific modular freight management software with customisable sortation and handling for freight, parcel and distribution hubs.

“Freightflow can be deployed on both low and very high volume operations because of its scalable modular architecture, virtualisation technology and software performance,” Jackson said.

“The combination of the Freighflow and Sym3 which can be linked to multiple sites contributes dramatically to operational visibility and understanding, which is the key to optimising operations at not only a hub level but at a national level,” he said.

BCS has previously delivered one of the largest freight handling systems seen in Australasia in 2009. That project was in Auckland and is capable of sorting just under 20,000 parcels per hour.

Jackson said the Toll contract was a milestone for the company.

“Traditionally, the BCS Group core business was in automated airport solutions and our many logistics projects in recent years has gradually been balancing the ledger.

“We made a business decision last year to scale our operations preparing for these large logistics projects and our innovative industrial intelligence solutions have definitely allowed us to offer a unique value added solution which has helped us get across the line.” 

Largest parcel facility in Australia puts Toll in growth position

Toll Group is positioning itself for growth in the express parcels market by building a $170 million freight facility in Sydney.

Toll say the facility in the city’s west is the largest of its kind in Australia and will be used by express road freight business Toll IPEC to grow the capabilities of its new online parcel delivery service.

“This custom-designed facility, with its highly specialised sortation system will increase Toll’s parcel sorting capacity in Sydney more than three-fold to an unprecedented 35,000 parcels per hour,” Toll Group managing director Brian Kruger said.

“Given the expected long-term growth in both our traditional B2B and the online retail parcel markets, it is important we continue to enhance our capabilities. Investments like this will help Toll continue to improve its already-extensive national distribution network, making it second to none.”

Kruger thanked the New South Wales Department of Planning and Infrastructure and site developer Goodman Group for their hard work in the planning and construction of such a landmark project.

“Finding land of this size adjacent to major transport routes is increasingly difficult in major cities like Sydney. Our extensive 12-month modelling process that looked at infrastructure and demographic data and projections decided Goodman’s Bungarribee Industrial Estate, with its immediate access to the M7 and M4 motorways and the Great Western Highway was an ideal location to service Sydney and its expanding western suburbs,” he said.

“The custom-built facility provides all sorts of benefits in terms of improving traffic flow and congestion, fleet productivity, staff safety, parcel sorting speed and accuracy, and energy and cost efficiencies.

“Once built, the new facility will enable Toll IPEC to move operations from its current sites in Moorebank, Homebush and Bankstown to a single, purpose-built facility, cementing Toll’s presence in Sydney and allowing for decades of growth in the express parcel delivery market.

“This $170 million development adds to Toll’s recent industry-leading investments over the past few years that includes a $54 million express road freight terminal in Perth, a $39 million facility in Brisbane and a $10 million terminal in Canberra.”

Kruger said Toll was investigating similar opportunities in South Australia, and will also look to grow its capacity in Victoria over the coming years.

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