Revitalised online shopping is forcing the outdated postal sector to transform, according to a new report from supply chain consultancy TMX Transform.
Australians spent a record $69 billion online in 2024 after three flat years of spending, with eCommerce sales now accounting for almost one quarter of all retail spend in Australia.
While ‘Super Shoppers’ (who purchase at least once a week) make up only 15 percent of purchasers – they buy a staggering half (49 percent) of all online purchases.
But this surging demand is forcing postal and parcel operators and e-commerce companies into redesigning their networks and adopting AI and automation to stay in business.
TMX’s report ‘Collapse or Revolution: How a smart supply chain can deliver for postal’ features interviews with TMX inhouse postal experts, including Australia Post’s former Group Chief Operating Officer Bob Black, former Chief Customer Officer Christine Corbett, and former General Manager Strategy Ben Franzi; as well as TMX Transform’s global executive director of supply chain, Tom Fitz-Walter, and supply chain directors Max Reynolds and Jamie Dixon.
Legacy sorting systems struggle with today’s parcel complexity, while postal infrastructure designed for letters cannot efficiently handle the e-commerce explosion. The last mile, which makes up approximately 70 percent of delivery costs, faces additional pressures from urban congestion and rising customer expectations.
“There is tension between achieving speed, reliability, and cost. Consumers need choice, but in many cases must choose between speed and price. There’s a trade-off,” says Bob Black, TMX Transform Non-Executive Board Director and Postal Expert.
“We’re seeing a global shift. Australia Post is reducing letter delivery frequency, Royal Mail is challenging six-day service mandates, and PostNord will stop delivering letters altogether by the end of 2025. The Universal Service Obligation is being redefined to reflect a parcel-first future.”
The transformation is already happening on Australian soil, with Australia Post making significant technology investments across its network.
Earlier this month, Australia Post opened a new International Commercial Facility at Sky Road, Melbourne Airport. The 2,500m² facility features advanced automation technology to sort up to 6,000 parcels per hour and is the post’s first facility in Victoria designed to expedite the clearance process for international parcels.
The report identifies three key pillars essential for postal success in the digital era – network redesign, last-mile optimisation, and automation and AI.
TMX Transform has partnered with postal organisations worldwide, including Australia Post, New Zealand Post, Singapore Post, and Royal Mail, to implement these transformative technologies and strategies.
Download the TMX Whitepaper on Postal & Parcel Logistics Trends | TMX Transform | TMX Transform