Australia Post has phased out daily letter deliveries at six locations, with plans to expand the new delivery model nationwide.
The trial is currently underway in Cranbourne, Victoria; Hornsby and Nepean, New South Wales; Brendale, Queensland; Butler, Western Australia; and Camden Park, South Australia.
The pilot model revolves around prioritizing package delivery, maintaining a five-day-a-week schedule for postal workers to distribute packages. However, the delivery of letters is now staggered and takes place every second or third day.
Letter delivery in Australia has steadily declined, with the average household receiving just 2.2 addressed letters per week, compared to 8.5 in 2008.
Now the government is set to cut daily deliveries across the country in a bid to preserve Australia Post's financial viability.
It's understood the government could sign off on the changes to Australia Post as soon as this week.
Communications Minister Michelle Rowland said any changes to delivery “must ensure that a high-quality and sustainable letter and parcel service is maintained”.
It comes after a discussion paper on the government-run postal service warned in March that 'existing community service orders are no longer financially sustainable'.
“As the use of traditional postal services declines, Australians are increasingly relying on Australia Post's nationwide parcel delivery services, which operate in a highly competitive market,” the discussion paper said.
One of CEO Paul Graham's key recommendations to save money was to change letter delivery from daily to every second or third day.
Mr. Graham also wants to close some full-service city post offices.
He warned Australia Post could soon need a multi-billion dollar bailout if its systems remain the same.
Rowland says it is important that Australia Post is sustainable as local post offices remain important service providers in many communities.
“Australia Post serves so many communities, especially in rural and regional Australia,” she told ABC TV.
“In many cases it is not only the office, but also the store, often the only place where banking services are offered.
Earlier this year, the postal service reported a first-half 2015 loss of $189 million, while Australia Post was expected to report its first annual loss since 2015.
Australia Post has phased out daily letter deliveries at six locations, with plans to expand the new delivery model nationwide.
It's understood the government could sign off on the changes to Australia Post as soon as this week