Death Spiral !

In an ever changing world old technology gets the flick and that is exactly what is happening to the daily letter delivery service.  We are about to see a whopping forty cent increase in the price of a postage stamp - and delivery to the average home letterbox take another two days.

The reason for sticking a stamp on an envelope and mailing a letter is in a death spiral and the post office system is now making calamitous losses on mail deliveries, only mitigated by increases in parcel deliveries as Online shopping gains momentum.

The move to a one dollar postage stamp will only increase the appeal of paperless billing and the use of email for communications, and it will probably see the end of print magazines such as The Economist and Time, etc.   Mailing rate increases will drive up subscription prices and there is little point in news magazines if they take a huge time lag behind the news services instantly available on Smartphone screens.  The electronic version of these magazines is now in the ascendancy.

A likely casualty will eventually be the delivery of a letter anywhere on this vast Australian continent for a common posting rate.   That applies in few other instances and it was only possible when the sheer volume brought economy of scale - and that familiar postman with his mailbag was a common sight on every Australian street.  Today, the biggest mail volume goes to post office boxes in the centre of each state's capital city.  Personal letters flow becomes ever fewer.

We are fast heading towards the post office morphing into a courier service.   It is certainly successfully competing with the field of companies in the parcel delivery business and who charge for their services on the basis of the size and weight of the delivery item - and the distance to where delivery will take place.    Eventually, this principle must apply to each letter.  Exactly the same costs apply to having the service in place to convey an item from one place to another - and costs vary only by size and distance.

The big question waiting to be answered is exactly what happens to the vast post office network that covers every Australian city, suburb, town and village ?   A long time ago each post office was clearly a government instrumentality but today the average local post office is in private hands and is probably simply a counter is a newsagency or a corner store.    The fact remains, it serves as the focal point of a distribution network that covers the Commonwealth - and that has few parallels.

Even tiny little post offices are busy places with a steady stream of customers using them to pay bills - and recently they added the ability to dispense money from the range of any of the big four Australian banks.  In the past, this was limited to just the Commonwealth bank, but it seems that commerce is waking up to the universality that this vast network has to represent many forms of business on the widest possible scale.

There is every chance that the post office network may become the focal point of access and take advantage of one of the weaknesses of the computer age - the inability of many people to fully comprehend a transaction sitting at a keyboard terminal.   Many who are quite literate in using a computer, would prefer to have their questions answered by a human being who attends to their needs by doing the actual input processing.

There is a welcome opportunity for post offices to become a source of knowledge and the access point for a whole host of government and commercial services - with it's unique spread of outlets that encompass this entire country.   There is simply nothing else that delivers such a commercial opportunity !