Australia Post Annual Report 2008–09

Core businesses Parcels & logistics
Logistics services
Post Logistics
Post Logistics offers business customers
a complete end-to-end supply chain
capability, from the domestic or international
manufacturer to the end consumer.
Some of the value-added services that
Post Logistics provides at various points
along the supply chain include:
• multi-country consolidation (sourcing
products or components from
various countries)
• multi-mode international freight forwarding
• destination port and customs services
• electronic order processing
• automated reporting and credit management
• warehousing (in Australia and China)
• inventory management
• kitting, and pick and pack
• distribution and returns management.
After seven years of growth, Post Logistics
recorded a decline in revenue due to the
downturn in the retail distribution sector during
2008–09. International supply chain revenue
rose for the third consecutive year. Customer
service remained strong – order accuracy
was 99 per cent and overall on-time
despatch 98 per cent.
While a program of cost reduction and
warehouse consolidation was undertaken to
bring Post Logistics into line with the industry
model, we continued to build the business
around opportunities for growth. In November
2008, the new South Australian facility
in Pooraka became operational. It was
established to meet the increasing needs
of an existing client, household appliance
designer and manufacturer Fisher & Paykel.
Overall, Post Logistics’ Australian operations
include 219,000 square metres of
high-quality warehousing at 17 facilities.
Other new business secured during 2008–09
included a total supply-chain solution for
greeting card company John Sands, one
of many major companies that seek greater
efficiency and cost savings by choosing
our integrated supply-chain service. Those
requiring a partner with global reach also
benefit from our international agency network,
as well as our wholly owned subsidiary Post
Logistics Hong Kong and our branch in New
Zealand, and Sai Cheng Logistics International,
a joint-venture partnership in China.
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Australia Post Annual Report 2008–09 | Report of operations
Joint-venture partners
Star Track Express, Australian air Express
Australia Post is a joint-venture partner with
Qantas in two express delivery businesses:
Australian air Express and Star Track Express.
Australian air Express offers complementary
time-critical express linehaul and air delivery
services. Star Track Express specialises in
transporting time-critical B2B freight. The
majority of its business comes from its
national express road freight service.
Sai Cheng
Sai Cheng Logistics International is our
joint-venture partnership with China Post.
Sai Cheng offers a reliable, cost-effective
supply-chain solution between manufacturers
in China and customers in Australia and New
Zealand. This capability also extends into the
United States, Europe and Japan.
Sai Cheng defied logistics trends, with
revenue increasing by 56.4 per cent (based
on Australian dollars) this financial year.
Though the joint venture was only established
in 2005, it has rapidly expanded its supply
lines. This means Sai Cheng now provides
services to one of the largest computer
manufacturers in the world, having already
established a relationship with ASUS in China.
Sai Cheng directly assists Australia Post’s
other businesses and partnerships, such
as Post Logistics and Star Track Express,
which worked together to deliver an integrated
supply-chain solution for homewares business
Villeroy & Boch during 2008–09. Some 90,000
items were delivered from suppliers across
China to retailers in Australia and New
Zealand. This partnership resulted in significant
international supply-chain efficiencies and cost
savings for Villeroy & Boch and enhanced
retailer satisfaction.
Australia Post’s retail business also utilised
the Sai Cheng integrated distribution model
to deliver Christmas merchandise to our
customers. Multiple vendor deliveries were
consolidated in China and shipped directly
to our outlets via our parcel delivery network.
This industry-leading distribution model
continues to develop its capabilities and
deliver significant business benefit.
Enterprise event
management project
In June 2009, the Event Management Product
Tracking Implementation Project deployed an
event management capability that tracks
barcoded products through the Australia Post
network. This has enabled legacy applications
to be decommissioned, and it is the first step
in expanding the IT platform’s capacity to
process large-scale transaction volumes.
This will allow us to manage internal
processes more effectively, improve tracking
efficiency, enhance the customer experience
and attract more customers.
The new event management capabilities will
enable us to implement further releases to
track additional products and assets, as well
as supply chain, finance and HR information.
This will increase availability of data (both
internally and externally) about products
flowing through the network.
The project was delivered on time and under
budget, while providing a quality operational
system. The solution is now being used for:
• day-to-day queries on parcel delivery
information by registered call centre,
facility and customer users, and by the
public via anonymous user queries at
auspost.com.au/track
• supporting customer delivery reports, driver
delivery forms and customer service notes
• processing over 1.5 million transactions
a day in a four-hour peak period
• measuring and improving delivery quality and
timelines to enhance the customer experience.
The future
The short-term future of parcels and logistics
around the world depends on the health of
the economy, as consumer spending directly
affects demand for the movement of goods.
After rapid growth in recent years, our
parcels & logistics portfolio will continue
to consolidate its position in readiness for
an upturn. This will be done by reducing costs,
seeking greater efficiencies and investing in
improved systems. Developing our people’s
skills, encouraging innovation and improving
our service remain critical to our long-term
focus of delivering flexible integrated solutions
to an expanding customer base.
Parcels will continue to benefit from online
commerce, which remains buoyant even in
difficult times as consumers become more
price conscious. We will continue to enhance
the sophistication of our parcels services
by expanding further into the B2B market
and rolling out Click and Send online parcel
processing into our domestic offerings.
Logistics will continue to attract and grow
profitable customers, particularly on the
back of our international capabilities. We will
significantly expand Sai Cheng’s operations
and carry this successful model into North
America and Europe, directly benefiting
many aspects of Australia Post’s activities.