Is Oz Post making the case for change? Senators take on CEO

By David Donaldson

Wednesday February 25, 2015

Australia Post CEO Ahmed Fahour has been criticised over his company’s handling of stakeholder consultation as it undergoes major restructuring at Senate Estimates.

Senators expressed concern yesterday that Australia Post was doing a poor job of engaging the stakeholders — including franchisees, licensed post offices, business, unions and others — on the future of mail delivery as its letters service goes into “terminal decline”, as Australia Post CEO Ahmed Fahour himself described it.

Around 97% of users of “addressed letter” services are government and business entities, with only 3% being “social” users, Fahour told the committee.

Despite the protestations of Fahour that the corporation had held at least 345 meetings with stakeholders over the last 12 months, Senator Anne Ruston, chair of the Senate Environment and Communications Legislation Committee, said Fahour may be “mistaking movement for momentum” in Australia Post’s engagement with stakeholders.

Ruston said she and other politicians had received a large amount of correspondence from stakeholders complaining about the process, including unions saying that they are “just getting PowerPoints” and post office licensees arguing “consultations are extremely one-sided”.

In a tense exchange, senators Ruston and Anne Urquhart grilled Fahour on his reluctance to meet with stakeholders as one group. Fahour maintained that because stakeholders held different interests, it would not be worthwhile meeting with them together, despite some requesting a joint meeting.

When the senators suggested the public were irritated by Australia Post’s recalcitrance in not meeting with the Communications Alliance, Fahour argued the public were more interested in the service they receive at the post office.

“I don’t think the public even know who the Comms Alliance is,” he responded. After discussing the issue at length, an exasperated Ruston told the CEO:

“I can only say that we are trying to help you, Mr Fahour, and your resistance to it is astounding.”

Fahour maintained that stakeholder dissatisfaction was inevitable given there is no benefit to be gained from “scrambling to maximise a shrinking pie”:

“The key to executional excellence is being able to not necessarily get agreement that we’re going to do this, but to create clarity on what we’re trying to do.”

Fahour said one of the challenges for the organisation was to be able to shift resources to its growth area — parcel delivery, for which revenues this year grew by 5% year-on-year — in order to compete against foreign-owned companies, with Singapore Post and Japan Post both recently acquiring Australian logistics companies.

There were also concerns raised that Australia Post had not implemented a recommendation of the September 2014 Senate Standing Committee on Environment and Communications report on Australia Post to create:

“… a formal postal network strategy group that engages all stakeholders in the development of a comprehensive strategy to inform changes to the Australian Post network in the face of emerging challenges.”

Ruston noted that many stakeholders had understood such a group would be created, though Fahour stated he believed Australia Post’s board should be the group to determine the corporation’s strategy on engaging stakeholders.

Post reported on Monday that the decline in its letters business has accelerated to 8.2% year-on-year.

Although Australia Post reported a first-half financial year profit after tax of $98 million, it’s expected this will become a loss over the quieter second half of the year. Letters services lost $151 million, a deterioration of 57% on the first half of last financial year.

It wants the government to agree to a “two-speed” pricing system, under which users could pay for a “priority” or regular service, with both costing more than the current stamp price. Australia Post is also hoping to gain a greater deal of control over price changes for its services so it can respond more easily in future.

More at The Mandarin: Australia Post’s big loss leaves Fahour begging for reform

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