Australia Post’s “functional monopoly” is at risk of disruption, with a number of start-ups eating away at the national carrier’s lucrative parcel-delivery business.
Local outfits Sendle, ParcelPoint, Sherpa and Shippit are all using algorithms and nimble logistics to offer services they declare are not only cheaper but superior. And customers are starting to vote with their wallets, ditching the post office altogether.
Australia Post, which lost CEO Ahmed Fahour last week amid controversy surrounding his $5.6m renumeration, is clearly spooked, taking on Sendle in court for what it says is trademark infringement.
Sendle, a young firm which offers door-to-door parcel delivery nationally at a flat rate substantially cheaper than that offered by Australia Post, last week appeared at an IP Australia hearing defending its right to use its slogan “post without the office”.
“Australia Post says customers would get confused by having post and office together in the same tag line, but consumers are a lot smarter than that,” Sendle CEO James Chin Moody told The Australian. “They’re making the case they own the word ‘post’ — they even brought out the Oxford dictionary definition at one stage.
“But I think it’s showing we’re successful. What we’re doing is creating a service that people want but also is different to everything they don’t want, which is lining up at the post office and all the inconvenience associated with that.”
Mr Moody, a former CSIRO executive, said IP Australia was now making its determination and could take up to three months to make an adjudication.
“It’s been fascinating to see the amount of support we’ve received. A lot of the community is saying ‘why are we spending money on this, as taxpayers?’ That’s a big question that needs to be asked. Our intention as Sendle — we’re trying not to pretend we’re the post office. We’re the complete opposite. In a lot of cases we’re a lot cheaper — we can do it for 40 per cent less on average.”
The CEO said Australia Post had enjoyed a healthy monopoly for a long time. It was a habit for most Australians, so became invisible.
“Once we came to the small business end of the network and said there are better ways of sending parcels, these questions started getting asked. Because until then, people had nothing to compare them with. That’s why we’re standing up in this case and not rolling over. The market is now looking for choice.”
One small business customer fed up with Australia Post is Tanya Northey, who runs an e-commerce website, Lucky 44, and considered shutting it down entirely out of frustration with the national carrier.
“They made life extremely stressful,” she said. “It was complicated, unpredictable and inconsistent, to the point I was prepared to downsize and just lose the stress.
“There were so many hoops to jump through every time I dealt with them. Everything would need to fit through a slot, or weigh a certain amount — it’s such a complicated system. I’d walk out feeling I’d been ripped off and there was no flexibility there, no culture of wanting to provide a good service.”
Ms Northey said a Google search turned up Sendle, which offered door-to-door delivery despite her living kilometres out of town.
“I’m not a complainer, and I’m not an advocate for anyone, ever. But Sendle’s been all easy. I had contact with their staff straight away and they wanted to help me. I have had troubles with Sendle of course but every time there’s an issue there’s an actual person helping, and it’s genuine.”
Sendle is not the only Australian firm taking on the incumbent, with ParcelPoint CEO and co-founder Julian Leach declaring his five-year old company will have more locations than Australia Post in 12 to 24 months.
His firm offers e-commerce outfits like Amazon, eBay and SurfStitch pick-up points for customers in locations like pharmacies and newsagencies, undercutting Australia Post. Like Sendle, Mr Leach started his business in response to what he said was poor service from the government agency.
“The post office experience is pretty poor for two reasons: the opening hours and the queues when you get there,” he told The Australian. “We thought there’s got to be a more convenient solution to pick up or drop off your package, and have opening hours that extend to weekends and evenings.”
Mr Leach said that while he thought Australia Post’s executives were well-intentioned and understood the ecosystem, the sheer size of that business made adapting to rapidly changing consumer expectations difficult if not impossible.
“We’re asset-free — we don’t own or operate the shops, or the transport infrastructure for that matter,” he said. “That means we can focus purely on the customer experience and the technology.
“I think it’s pretty typical for any incumbent to be in a similar position. They’re a very large organisation where change can’t happen quickly. There are so many constraints. Extending opening hours is not as easy as it sounds; it creates a lot of opportunities for competition. Their market share is only going to fall.”
Mr Moody said Australia Post’s fight against his start-up contradicted Prime Minister Malcolm Turnbull’s rhetoric about competition being good for the market and consumer choice. “The Turnbull government could start asking: do we effectively have a functional monopoly here, with Australia Post?” he said. “Until we came along, you didn’t have that much choice apart from lining up at the post office.
“There are a lot of hidden monopoly things around that you don’t see until you look under the hood. AusPost is still the only company that can deliver to PO boxes. That’s a government asset, and it’s a bit like Telstra saying you can’t call a Telstra home phone unless you have a Telstra mobile phone.
“We’ve been calling on AusPost to open up that network for the past year. For many customers in regional areas that might be your address, and you can’t participate in the e-commerce economy. The government should be looking at this, not spending money on an IP dispute.”
Australia Post declined to comment for this story.
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