- 31 March 2020
- Transport / Logistics Services
Letter volumes have plummeted by 30% in one week in Australia, prompting Australia Post CEO Christine Holgate to take a 20% pay cut and forgo bonuses during the pandemic.
The fall in volumes comes from a dramatic drop in demand for passports and international post among other things. International parcel volumes have collapsed due to air travel falling too.
Domestic parcel volumes have rocketed however. In an email to colleagues obtained by a national newspaper she pointed out that this is Australia Post’s biggest source of growth, but has seen a mini-boom in recent weeks.
Despite the growth, the postal operator must cut its costs due to the crisis.
“I know many of you will also be aware of the boom in parcels our teams have been managing, as more people shop online as they work from home, self-isolate or sensibly avoid confined public spaces to protect themselves in the threat of the virus,” Ms Holgate told staff.
“Consequently, I can appreciate for many of you this time may be confusing, and you may be wondering if parcels are growing so strongly, why are we immediately cutting back on expenses and managing our costs so tightly.”
While parcels was performing strongly, other parts of the business were feeling the effect the coronavirus was having on the economy, she said.
“Although our parcels to consumers are growing strongly right now, our letters business, our international business and many of our other great services such as providing passports, have almost immediately shrunk.
“In just the last week we have witnessed our letter volumes fall over 30%, as has our international revenues and some of the other key services like passports, have halved.”
Ms Holgate said the large growth in parcels was not enough to cover the financial impact of the decline in the other areas of the business.
“With more potential restrictions imminent, as together we fight this virus, the risk these volumes fall further is very real.
“Our strategy through this crisis is simple. Our first role must be to protect our people; their safety and for as many as possible their roles. Our second role is to serve our country, as many Australians depend on us to give them access to critical products and services through this crisis. Finally, we must safeguard our business, as we know this is our best defence to protect our people and the services we offer.”
Australia Post senior executives and directors would take a pay cut, Ms Holgate said.
“I want you to know that the executive team and our board are all doing their share. The executive team and board have all agreed to take a 20% cut in their salaries for the months ahead as we go through this crisis. In addition, the executive team has agreed to forsake any right to a bonus payment for this year, the combination of both, effectively reduces their potential earnings in this period by more than 50%. We are in this together.”