Transportation Deployment Casebook/2024/Australian Post

Background

Technology

Australia Post is a corporation that offers postal delivery service to Australia operating for over 200 years . It works to deliver goods including letters and parcels across people, businesses and communities in Australia .

The technological characteristics of Australia Post have evolved overtime as Australia Post shifts its strategies and service focuses to match with its loyal clients - Australia. In the modern age with increasing digitisation of information and communication, the key technological characteristic of Australia Post is its physicality - the mail and packages delivered are physical objects to be held and kept. The main advantage and market of this would lie in parcels - physical object deliveries which cannot be made through an email.

During the initialisation of Australian Post however, the essential technological characteristic had been the efficient transmission of information as a means of communication. At its creation the main advantage of Australian Post was through delivery of letters and communications across Australia - in particular between the early settlers, officials and convicts and their hometowns in Britain. Naturally the main market of the postal service was hence the people in Australia wishing to deliver letters across space and oceans . The Australian Post was created as a means of organising the masses of letters being delivered to allow the correct recipient to receive or collect their mail. It has since grown into a network of delivery across modes of pack-horse, carriage, trains, motor vehicles and planes.

Early 1800s Context

Prior to the establishment of the first Australian post office in 1809, connection between Australia and Britain could only be made through letters on ships arriving in Sydney. This system was limited as it meant ships could be mobbed and crimes of fraud and theft ran rampant . Centralised postal service had already been organised in Britain in 1516 but early settlers needed time to organise this system around the development of the Australian colony . Progression was made from mobbed ships with letters into a mail delivery service in 1803 with boatmen delivering letters across Sydney and Parramatta . This is described in the "Sydney Gazette” (first newspaper printed in Australia ) issue of the 10th July 1803 . This system was still to evolve further as this delivery system involved no prepayment. Recipients of letters would be expected to pay which led to an unreliable delivery system . The chaos of these earlier years created a need for a system of organisation for mail among early settlers in Australia. This was reflected in growing complaints to the Lieutenant-Governor until change was made .

1809: First Australian Post Office established

The beginning of the Australian Post office is often attributed to the opening of the first Australian Post office with Post Master Isaac Nichols appointed on 25th April 1809 in Sydney . This appointment was notified through the "Sydney Gazette" by the Lieutenant-Governor to address the concerns of stolen mail enabling fraudulent crimes. The purpose of this post office was for all parcels and letters coming from ships to be deposited and then organised to be distributed to correct recipients . The establishment of the post office in Australia did not implement much technological innovation other than incorporating the early British centralised postal service into Australia as the settler population grew . Isaac Nichols would use his home – which served as the post office – to sort mail . Rules for the method of handling mail and costs for the service were all outlined in this order forming the initial policy to shape the Australian Post in its birthing phase . The role of Postmaster gave Nichols the right to board ships and obtain mail addressed to Australians on their behalf - a list of names of people with mail to be collected would then be printed in the "Sydney Gazette". A fixed collection fee was charged and this business remained private until 1825. At its birth, the post office served the market of early Australians who were struggling to correctly receive their mail. The system required the recipient to travel to the post office and receive their mail as at this stage and the number of letters were still limited enough for this system to be manageable. With the growing population and land occupied by the settler population in Australia however, the natural progression of the technology and system would be for a delivery system to be established to allow service to those who lived further away.

1825-1828: Growth - First Postal Act and Delivery services

In 1825 "An Act to Regulate the Postage of Letters in New South Wales" was passed by the New South Wales Legislative Council. This transferred the Post office from a private business to the public sector. The Governor was authorised to establish more post offices in Sydney and the New South Wales Colony. This allowed the postal office system to grow with the population of settlers across New South Wales. The Governor was also given the authority to fix the postmaster's wage and mail collection fees . As with the establishment of the first post office, this legislation seemed to lag behind the growing population of New South Wales that already passed 30,000 by 1821 - it was put in place after growing market demand.

In 1828, postal delivery services were established in Sydney . A postman would be responsible for delivering and collecting letters using a pack-horse . This technological development allowed postal offices to better organise mail so as to not be over-flooded by those who were collecting mail. Mail routes were established and Postmasters were appointed in other parts of Australia. Coach services were established between Melbourne and Sydney in 1838 to allow overland delivery . During this period roads and horses were the primary technological characteristic of postal delivery. It was the more efficient alternative to walking - delivering 50,000 letters and newspapers with a staff of three people: Postmaster, clerk and postman, but would lack the later reliability of steam trains.

1828-1901: Emerging technologies

Emerging technologies appeared for delivering mail in the 1800s including the Cobb and Co. Coaches that were brought to Australia with the gold rush. These coaches replaced the pack-horse as the official transport mode of mail from 1862 . This was an upgrade from the pack-horse to allow larger volumes of mail to be held during a delivery run. As railways developed throughout New South Wales they were also increasingly adopted for larger distance mail delivery - particularly between Sydney and Parramatta from 1855 onwards .

During the 1800s other technologies also developed that challenged the function of letters in communication across distances. Telegraph services were opened in Australia in 1854 and allowed communication across distances that was far more rapid than mail delivery. This new technology, initially private, was incorporated by the government into the postal office however and spread with the postal offices across the nation . Likewise in 1878, the first telephone call was made in Australia. These technologies allowed for rapid communication across distances greatly lowering the market need for letters and mail. The adoption of telegraph systems within post offices however kept post offices serving the existing market of those looking to communicate across time and space.

Timelines of key developments and growth

Key technological developments and their effects within the post office are listed in the table below:

Year	Event	Role in expansion or technology of the Post Offices in Australia
1809	First Post Office established	The first post office organised the chaos of people directly retrieving mail from the arriving ships. Mail was organised by the postmaster and collected by the recipient at the post office .
1825	First Postal Act	This act transferred the postal office from a private business to the public sector. Other post offices across New South Wales colony were also authorised and connected to allow for greater areas of Australia to be serviced by closer post offices .
1828	First Postal Delivery - using pack-horse	The first postal delivery services in Australia was established with a postman and a pack-horse
1850	First Postal stamp	The first postage stamps were used in New South Wales that also authorised the switching of postage to be paid by the sender rather than the deliverer. A more organised system where postage fees could be collected upfront was established .
1862	Postal Delivery - using Cobb and Co. Coaches	Cobb and Co. Coaches replaced pack-horse as the official transport mode of mail . Coach services eventually shrunk in exchange for the reliability of railways .
1872	Opening of the Overland Telegraph Line	This connected Adelaide North to Darwin allowing for rapid telegraph exchange to be delivered across Australia. This mode of communication challenged the role of written mail but was still provided by Post offices allowing for their continual growth with the emerging technology.
1865	First Travelling Post Office operated	These were carriages within moving trains where mail would be sorted during its train journey. These eventually fade out to be replaced by motor vehicles and air transport
1901	Federation of postal services	With the Australian Colonies joining together to form the Commonwealth of Australia, all postal services administrative rights were passed to the Commonwealth Government operating under the Postmaster-General's Department. Uniform charging rates for newspapers and telegrams were established across the states . This union allowed for easier coordination and distribution of mail across the states and internationally.
1907	First motor vehicle joins the Australian Post Office Fleet	Technology advances would allow railway travelling post offices and coaches to be replaced by motor vehicles as a means of mail delivery.
1910	Truck used to deliver mail	It is reputed that a truck connecting Ilfracombe and Isisford, Queensland is the first motor vehicle to regularly carry mail on a country route in Australia.
1921	Regular airmail service in Australia established	This was connected by West Australian Airlines. This shortened long-distance mail delivery times from weeks to days .
1926	Mechanical mail handling machine equipment introduced in Sydney	This allowed for greater automation and efficiency in sorting of mail and was introduced in the Central Mail Exchange of Sydney. . Technological advance allowed for mail systems to accomodate and improve services by servicing more people across larger distances faster.
1967	New mail exchange building opened in Sydney	This $6 million building included a massive electronic letter processing machinery. By 1969 it could process 1.6 million letters daily and allowed the Australian Post to accommodate the growing volumes of mail as its accessibility to the Australian population grew. This was also supported by the introduction of the Postcode system which accelerated the sorting process immensely .
1975	The Postmaster-General's Department split into Australia Post and Telecom Australia	This policy change separated the telecommunications and postal service bodies - although both were government trading commissions . This transformed the department from operating off of government subsidy into a body expected to generate its own operating costs. To accommodate for this change in operations, postage prices were raised and priority mail services were introduced .
1991	Express Post introduced	This system guaranteed next-business-day delivery for a more expensive fee - furthering the business model and providing more efficient service to Australians who required faster delivery services .
2008	Australian letter volumes reached an all-time peak	This was likely due to the peak paying population in Australia before the other technologies such as telephones, internet, email took away large portions of the market share.

Maturity and decline

With peak Australian letter volumes being achieved in 2008, this has been prescribed as the mature phase of the mode. From the rise of technological advancements such as the e-mail and internet replacing postal letters the mode has become less economic and rapidly declined . Australian Post has attempted to shift focus towards parcels but faces competition with other delivery services that have risen with the rise of online shopping . This attempt to shift is reflected in the 2021 opening of a new $33 million processing station in Adelaide - capable of processing 130,000 parcels in a day. The future prospects of Australian Post after consultation with the Australian Public is a business model which aims to decrease normal delivery speed in an attempt to minimise expenses while maintaining revenue through express delivery .

Australian Post: Life-cycle model

Model

Life-cycle analysis - Observed and predicted Australian Post Output Value

The life cycle of Australian Post has be modelled using the S-curve with periods of birthing, growth and maturity. Data analysing the productive output of Australian Post was fitted to the logistic function $S(t)={\frac {S_{max}}{[1+e^{(-b(t-t_{0})}]}}$.

where:

Variable	Description	Value in predicted model
$S(t)$	Australia Post's total output value in the year t	-
$S_{max}$	The saturation status level	5400
$b$	A constant coefficient that is to be estimated	0.127
$t$	time variable - the specific year that the output value is being found for	-
$t_{i}$	The inflection time. This is the year when ${\frac {1}{2}}S_{max}$ is achieved	1994

The observed data used was of Australia Post's Total Output Value which aggregates revenue from reserved letters, other addressed and unaddressed mail and money orders. This data was approximated using the above logistic function and modelled by the following equation:

$S(t)={\frac {5400}{[1+e^{(-0.127(t-1994)}]}}$

The method of calculating this model was found using Ordinary Least Squares Regression. The Logistic equation was rearranged to obtain a linear equation of the form $Y=bX+c$ where the following values were taken.

$Y=\ln \left({\cfrac {S(t)}{(S_{max}-S(t))}}\right)=bt-bt_{0}$

Variable	Description
$Y$	Dependent variable - for this mode $Y=\ln({\frac {Value}{S_{max}-Value}})$
$X$	Year

Method and Evaluation

Although there is a slight decline in Value output for 2001-2002, with hindsight knowledge that peak achieved in 2008 it is assumed that these were years of fluctuation and $S_{max}$ had not yet been fully achieved, hence they were also included in the S-curve approximation. The unknown in this case was $S_{max}$, hence different regressions were found for variable values of $S_{max}$. The R-squared value was used to evaluate which regression was the best fit for the data. The R-squared value for the final regression chosen was $0.9829$.

Given the R-squared value being very close to 1, it is presumed that the model is a good fit. Issues with the model are the larger variations occurring during the earlier and later years. It may be possible that given more data from earlier and later years, a better fitting equation for modelling the life-cycle of the Australian Post office would have greater growth during the 2000s and a later earlier inflection point.

Life-cycle years

From the observed data the periods of birthing, growth and maturity are identified as the following:

Birthing: Pre 1976-1980

Growth: 1980-1999

Maturity: 1999-2002

Data

Year	Australia Post's observed aggregate output data - Value ($M)	Australia Post's predicted aggregate output data - Value ($M)
1976	501.8	458.8
1977	552.8	515.0
1978	566.2	577.4
1979	635.1	646.3
1980	677.7	722.1
1981	769.5	805.4
1982	873.3	896.5
1983	990.8	995.6
1984	1084.7	1102.9
1985	1196.7	1218.7
1986	1297.0	1342.8
1987	1481.3	1475.1
1988	1617.4	1615.2
1989	1764.6	1762.7
1990	1935.6	1916.8
1991	2147.0	2076.6
1992	2284.4	2241.3
1993	2403.6	2409.5
1994	2551.1	2580.1
1995	2758.7	2751.6
1996	2897.8	2922.7
1997	3123.5	3092.0
1998	3276.7	3258.2
1999	3439.1	3420.1
2000	3734.2	3576.6
2001	3705.5	3726.8
2002	3731.7	3869.9