Australia looks toward cheaper deliveries for SMEs

Australia’s Small Business and Family Enterprise Ombudsman Kate Carnell has told the Australian press that there is a need to ‘level the playing field’ on mail costs so SMEs can compete with their larger competitors.

The Sydney Morning Herald has published an article where Carnell was quoted as saying, ”It appears that Australia Post provides volume discounts to big customers who send large amounts of parcel mail.

“The SME sector is just struggling to compete with some of the offerings being made with the big guys and the multinationals.

“I am examining options to level the playing field for small business to compete fairly with big business when it comes to sending goods within Australia.

“One option may be to establish a buying collective.”

Carnell was also quoted as saying: “With the current competition in the space it means we are encouraging SMEs to get online and grow their markets and that’s not possible if they can’t compete in the delivery space and we particularly see that in rural and regional areas.

“It would be cheaper to get something from China in terms of cost of delivery than from inside Australia. That’s a huge issue.”

Larger businesses, using their in-house delivery networks as necessary (as with Amazon), can achieve economies of scale that can’t be matched by their SME competitors, particularly through large scale discounts in agreements with postal operators. This biases the playing field against firms that may otherwise be able to compete on costs with similar margins to their giant rivals.

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