Small business turns to private delivery service after Australia Post delays cost $10,000 each week

Small businesses are turning to private delivery services and doing their own parcel-runs, as delays at Australia Post push out delivery times by up to four weeks in the lead up to Christmas.

Laura Conti, co-founder of the online bedding shop and social enterprise GoKindly, says revenue has been down by up to $10,000 each week over the past month due to shipping issues.

“We’ve been down 20% for the last four weeks because people are not buying online because shipping is so slow,” Conti tells SmartCompany.

A major issue affecting GoKindly, which employs seven staff in Melbourne, is the rising cost of shipping parcels.

“The cost of shipping skyrocketed in the last month or so and the state packages are turning up in is so bad we’re having to give refunds,” Conti says.

Conti says the increase in shipping fees, which for some pillows has risen from $40 to $80, coincided with Australia Post’s adoption of an automated weight and measuring system.

“I’ve raised the issue with my account manager and have sent through reams and reams of information to them,” she says.

“We’re a small business that doesn’t have a whole lot of customer service people to help raise these issues,” she adds.

Australia Post’s operations have been buckling under large volumes of parcel deliveries in recent months due to lockdowns in Melbourne and Sydney and the popularity of online shopping.

In Melbourne, Australia Post paused parcel pick ups for five days to help clear a backlog of deliveries in September.

Since then, Australia Post has pledged $1 billion over three years to improve its services, with $400 million to go towards enhancing parcel facilities by mid next year.

According to an Australia Post spokesperson, staff at the postal service are “working harder than ever”  to deliver record volumes of parcels. 

The spokesperson said parcel processing machines are now used to detect and reprice the difference between the postage paid and a parcel’s weight but the rates have not changed.

“There has been no change to rates, and the parcel is priced on existing rates to account for the space the items take up in our trucks,” the spokesperson told SmartCompany.

As GoKindly manufactures, packages and ships its bedding products from its Melbourne studio, it was dependent on domestic parcel delivery services like Australia Post and its subsidiary StarTrack.

But since the delays extended to a four-week wait, the business shifted to delivering its own parcels within a 20km radius of its store and using the private service Pack & Send.

“It’s much faster and the customer experience is better,” Conti explains.

GoKindly is not the only business in Melbourne to seek alternatives to Australia Post.

Dog food startup Scratch launched its own delivery service earlier this month, after shipping delays at Australia Post contributed to $150,000 in lost revenue.

Melbourne-based co-founder Doug Spiegelhauer told SmartCompany Scratch was using Australia Post to send its pet products to customers in Victoria but lockdowns and work stoppages led to lengthy shipping delays.

“We still have 300 orders with Australia Post that are four weeks old, that haven’t been scanned, and 700 orders over 14 days old,” Spiegelhauer said. 

This article was updated at 7:30am on Thursday, October 28 to include a statement from Australia Post.