Australia Post’s Logistics and Supply Chain Environment

Transport and distribution

“Australia Post is a postal services provider, responsible for delivering letters and parcels across Australia” (Australia Post 1). In the past, the organization’s core business was delivering letters and parcels to the people of Australia and other parts of the world. As the world continues to embrace e-commerce, it has had to diversify its products portfolio to remain relevant in the markets. One of its biggest products today is logistical management for different clients. It is a well established fact that infrastructure investments plays a vital role in any country’s economic development. It the most crucial element of Australia post operations.

However, the magnitude of its contribution and the extent to which the economy benefits may differ. When considering the kind of investments to make in a country’s infrastructure system, policy makers have to consider more than the immediate economic benefits. They have to put into consideration broader developments in a region and how they can work together with a good infrastructure to benefit the economy. There are various economic benefits which arise from infrastructure development. It enhances employment accessibility, increases employees output as a result of easier operations, impacts property value and it increases productivity.

Australia Post operates many dozens of warehouse sites across different continents in the world. The company works together with other players in the transportation industry such as DHL and AaE to ensure a timely delivery of its products. One way through which the company has improved its transportation process is by using the many available GS1 standards. The company is be able to track its products from every part of the world they are in. Deployment of such technologies ensures more streamlined communication between the company, its warehouse managers and distributors.

Another ways through which logistics companies manage their transportation and distribution processes is by using real time dynamic optimized models (Plant, Van and Cristina 112). Such models allow Australia Post to respond to supply chain changes in a way that most of its traditional transportation methods would not handle. Its supply chain managers are able to respond to challenges and changes in a more timely manner. Real time optimized models help the company increase focus on performance management. It also allows implementation of more sophisticated and effective reporting systems, allowing Australia Post to track and trace its transport operations. In the supply chain management, it is easier to track goods on transit and have accurate collection and delivery times.


Post Australia offers services that allow business to outsource their entire logistics departments. The organization offers its clients warehousing, order management, payment processing and other logistics management processes. By offering logistical services to different clients in Australia, “more businesses are discovering the benefits of outsourcing their logistics management” (Australia Post 1). Key benefits of outsourcing include:

  • Businesses are able to save time and money since they don’t have to develop a logistics management process
  • Outsourcing to an organization whose specialty is managing logistics assures a business of quality and efficiency
  • Since a business is dealing with just one company to manage all its logistics, it is easier, convenient and time saving
  • A business saves money that would have otherwise been used to purchase and upgrade logistics technologies, vehicles and human resources
  • Australia post customers are able to focus the time and money saved on other areas of business
  • Australia’s logistical services offer a wide coverage for its customers. The company covers the whole country. To enable it handle global operations, the company has signed contracts with other global postal corporations. As a result, its customers enjoy a national and global coverage.


Logistics management require an efficient way of managing relationships with business, suppliers, distributors, transporters and involved personnel. As the Indian Institute of Materials Management explains, “the way a logistics company delivers its solutions has a direct impact on the company’s customers, and influences how they view the company” (1). Australia Post manages its reputation by delivering on time, making sure its clients have their stock available for customers, ensuring continuous improvement of services, and delivering all its promises. By having a wide range of products, the company is able to offer custom made solutions to individual businesses with specific problems.

The company has established a name for itself as the best Australian logistics management company. For a business that has a presence in almost every major city in the world, relating well with its stakeholders and partners is crucial. The business has invested in advanced technology to manage its communication with customers and other related parties in efficient manner, one that allows it to be synchronized with all its team all over the globe. Electronic Data Interchange links its warehouses, transporters and employees all over the world and helps the business in pricing and other processes.

Global environment

Australia Post is today enabling Australian business access global markets by offering logistics solutions that cover various regions in the world. Many companies in Australia are also able to have their products manufactured in other countries such as China, for cheaper production cost, and have them delivered and sold in Australia. An excellent example is the clothing industry where more than half the clothes available in Australian stores are made in Asian countries and transported to the country for sale.

According to Australia Post “the company has recognized the need to to provide the ability to do business internationally and providing this capability ensured that it not only picked up customers’ international business, but also their domestic deliveries” (Australia Post 1). The business has partnered and purchased other transport business to allow efficient movement. For example, its partnership with Australian air Express (AaE) has allowed it to transport goods by air in many countries where AaE operates. This enables it deliver goods in a more timely manner and offer services to businesses that deal with perishable goods. After acquiring State Warehousing & Distribution Services (SWADS) in 2005, the company is now able to manage more logistics processes. Other global partnerships include that with China Post to form Sai Cheng Logistics International.


The cost of managing logistics weighs heavily on the consumer, because it is passed on to them. The cost of developing a proper transportation network, though it is the responsibility of the government, affects all businesses in Australia. Even though there are outstanding roads in Australia, the company has to bear the cost of managing its fleet, fueling and hiring personnel.

Technology accounts for a big part of the company’s costs. According to the Indian Institute of Materials Management “technology is the backbone of any logistics business” (1). Managing communication, information and large volumes of supplies and deliveries can only be possible through technology. The business has invested in real time dynamic optimized technologies to allow it manage information in real time. Warehousing and human resources are other significant costs for the business.


Like any other industry, logistics management is faced with uncertainties that may cause a business substantial losses. According to The Shippers Voice, “risks related to international transport and logistics have continued to rise in the current economic environments, adding pressure on exporters and importers to set up formal risk management procedures” (1). Cargo theft is among the biggest challenge that Australia Post has to handle. The risk of system failure is real and common among delivery and logistics management companies.

The risk of goods seized by creditors in warehouses, or while in transit, is a significant risk for the business. Costs incurred if goods are transported to the wrong location have to be incurred by the business. Other risks include transport congestion, lack of inventory, new environmental legislation in different regions, fluctuating transport costs, bankruptcy of business partners such as transporters, transport congestion, among others.

Customer satisfaction

Profits for Australia Post are dependent on sales volumes. To sustain high sales volumes, the business has to ensure customers are satisfied and establish customer loyalty. Customer satisfaction must address reliability, packaging, storage to retain quality of goods, and transparency with the customers. Australia Post has made their services more convenient by ensuring customers can track their items when they are in transit, have convenient payment methods, and having an efficient call center that allows customers get assistance anytime they have a problem. The business also employs several marketing strategies such as promotions and offers. For example, the business is currently running a promotion where customers can win a grand romance package for two, for purchasing any specific items in the list of products and services.

Information and communication technology

Nearly every organization today is faced with a test of coping with constantly changing information systems and needs. Businesses that have been around for a long time have had to adjust from ledger cards to keeping up with large volumes of information generated in the digital era (Alee 19). The speeds at which information flows in can make it hard for Australia Post to keep up. “As we move rapidly into the future, businesses face the challenge of being effective in a global knowledge environment” (Hislop 14).

“Today, leaders have to undertake the responsibility of helping their organizations cope with the challenges they face from expanding knowledge and knowledge systems” (Hislop 20). Information management enables the business create, represent, distribute and adopt data and information. It is also the process by which data is collected, converted to information and then to knowledge, and finally to expertise. “In a world overloaded with information, there is a need for emphasis on not just more information but actionable intelligence that is capable of guiding decisions in a business” (Alee 124). For a business such as Australia Post, information management and communication among different teams, play a significant role in ensuring timely delivery of goods and consistency.

Other technological investments in the business to allow timely communication include the Integrated Composite Application Network (ICAN), which integrates its stores and allows it customize its operations. It allows it communicate with its teams and partners in real-time. By using the latest technology and de-centralizing some of its operations, the company is today one of the most successful businesses in supply chain management.


The government of Australia and other regions where the company operates have put in place regulations to ensure environmental disasters, accidents and even food poisoning are avoided. The National transport commission in Australia has provided regulations that logistics companies must adhere to on roads, rails, air and water. The business is fully licensed by the Transport Assessment Commission and other relevant business bodies in the country.

The Logistics Information & Navigation Centre has enforced a chain of responsibilities of businesses involved in logistics management. The law ensures that logistics management businesses are responsible enough, and they do not allow transporters to overload, overspeed or pick up cargo that they are unable to legally transport. Since Australia Post has operations in other global destinations such as China and the US, the business is obligated to adhere to environmental, transport, communication and labour regulations in those countries.

Comparison with other resources

From resources and discussions about logistics management, the industry can perfect its management systems by using route optimization and planning. For example, optimization will help transport managers in different locations create daily routes using powerful programs (Transportation Research Board 13). The result is better resource utilization, where drivers deliver more and drive less. As demand for logistics services grows, the companies don’t have to increase the number of cars they have on the road. Instead, available transport management systems such as optimization can help them transit more volumes while keeping their costs low. Route optimization will help transportation managers to synchronize activities in different warehouses and ensure that vehicles take as little time as possible on the road.

Another way through which Australia Post can ensure transportation excellence is by integrating fleet management capabilities. Transportation management solutions will offer better ways to establish backhaul techniques and opportunities for Australia Post. Modern fleet management solutions will enable the business to have a robust support for integration of different transportation modes such as ocean and rail, to help solve the cost and capacity challenges facing the business today. The will give it capabilities that assure compliance, proper documentation and accurate cost calculations.

Continuous performance measurement is essential for any logistics management company to establish areas and functions that are not working. It can be done through discussions with the transportation teams, or surveys on warehousing teams and retailers. A transportation system’s performance measurement can be based on time taken to deliver products, cost incurred, safety of goods, quality of goods when they reach their destinations and distributors’ satisfaction with deliveries.

Adopting modern solutions such as transportation management systems is a valuable initiative, if the industry wants to reap full benefits from its operations. Transportation management system is one of the tools used by many other multinationals and big businesses to manage their supply chain. Its solutions will allow small businesses manage key processes in their transportation system among them; planning, decision making, measurement and transport follow-up. Its functions will act as supportive pillars for the businesses when selecting transportation mode and carriers, tracking vehicles on a real-time basis, controlling service quality, optimizing and planning transport schedules, simulating transportation costs and batching shipment orders.

From the resources, Australia Post can learn measures that will help it improve its operations. One area through which the business can improve is having efficient payment methods. The company has to pay for customs in different borders, fuel and its team’s allowances. Enhanced freight payment tools will give it better capabilities. In an era where bigger capacities are required, Australia Post needs to move into more sophisticated processes of handling incoming freight bills to avoid delays. Improved payment tools will ensure that order deliveries are not delayed and cargo does not take too long on clearance points. A modern payment capability will also enable it to automatic recordings in its systems, making data and information management even easier.

Comparison with another industry

For comparison purposes, this paper will use the retail business industry. To be specific, the paper will study logistics and supply chain management in supermarkets such as the Woolworths supermarket in Australia. The store has in recent years grown globally to almost every major city in the world. It has over 3,000 hypermarkets, supermarkets, hard discounters, cash and carry, and convenience stores. Supply chain management for the largest retailer supermarket in Australia is not an easy task. It includes logistics, procurements, warehouse management, transportation, IT and many other procedures put in place to ensure that consumers reach the goods when needed. The business puts a lot of emphasize on the need to reduce its purchasing costs, enhance availability of products and offer products at the best prices in the market.

The industry has embraced and utilized technology to allow it manage logistics and the supply chain in a more efficient manner. The difference between Woolworths and Australia Post is in the businesses’ main operations and technologies adopted. While Australia Post’s principal operations include storage and deliver of goods, Woolworths logistics management focuses more on managing stocks, since the business has outsourced transportation. For Australia Post, key technologies include those discussed in transport and information management. For Woolworths, the most outstanding technologies in the shop’s supply chain management is the Electronic Data Interchange, which links its shops and warehouses, making it easier to take stocks and avail products when they are needed. The other investment in their technology is the Integrated Composite Application Network (ICAN), which integrates its stores and allows it customize its operations.


Alee, Verna. The Knowledge Evolution: Expanding Organizational Intelligence. Boston, Mass: Butterworth-Heineman, 1997. Print.

Australia Post. About Australia Post., 2011.

Hislop, Donald. Knowledge Management in Organizations, 2nd ed. Oxford: Oxford University Press, 2009.

Indian Institute of Materials Management. Logistics for Customer Satisfaction, 2010.

Plant, Jeremy, Van Johnston and Cristina Ciocirlan. Handbook of Transportation Policy and Administration. Boca Raton:Taylor & Frances, 2007.

The Shippers Voice. Risk Management in International Transport and Logistics, 2009.

Transportation Research Board. Measuring Transportation Network Performance. Washington, D.C.: Transportation Research Board, 2010. Print.

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