Petra Stock
That man of letters, the author Mark Twain, used the phrase “lies, damned lies, and statistics” to damn those using data to support their unsupportable assertions.
On Wednesday, chief deliverer of letters, Australia Post (which delivered 1.6 billion of them last year) issued an alarming press release with the headline, Letters decline weighs heavily on Australia Post profitability.
“Every year it’s costing Australia Post more to deliver fewer letters. We know letters are in an unstoppable decline,” says Group CEO and Managing Director Paul Graham.
The release details falling revenue from the post’s letters business, in the six months to 31 December 2022.
“We are at a crossroads and the headwinds facing our business have never been stronger. Our Letters business continues to decline, as volumes fall and costs increase,” Graham says.
The Australia Post CEO is calling for changes to address what it calls ‘structural headwinds’, such as to the frequency of letter delivery, according to the Australian Financial Review.
But are letter numbers really falling?
Australia Post’s press release doesn’t include data on the volumes of letters or parcels delivered in the six months to 31 December. Cosmos asked for statistics on letter and parcel volume and delivery points for the same six-month period but hadn’t heard back by deadline.
But we looked in the latest annual report for figures on actual letter deliveries. Here’s the graph from page 18 of Australia Post’s 2022 annual report.
Look at the red line on the graph – which I’ve put a circle around.
In the past year, letter volume hasn’t increased or decreased, it’s remained flat at 1.6 billion per year. That’s a lot of letters.
Of course, the graph also shows a longer-term trend of decline.
So are letter numbers actually falling? Over the longer term, yes. But more recently, no.
Why are letter delivery costs increasing?
The annual report explains Australia Post’s structural concerns about its letter delivery service. “People are sending fewer letters. At the same time, the cost of delivering our letters service to more addresses across the country is going up.”
This issue is illustrated by the same chart on page 18, with the blue-green columns showing the number of delivery points, increasing from 12.4 million in 2021 to 12.6 million in 2022.
The increase in those bars sure looks steep.
But note the y-axis for delivery points starts at 11.2 million. Here’s what happens if we re-draw the graph starting from 0.
Same data, but without quite the same dramatic effect.
This isn’t the first time questions have been asked about Australia Post’s data on letters. The ‘Opposition’ in this news article is now the Government, a word commanding, possibly, a whole new set of letters.