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Monday, 18 June 2012
Page: 3576

Messenger Post

(Question No. 1713)

Senator Abetz asked the Minister for Broadband, Communications and the Digital Economy, upon notice, on 14 March 2012:

(1) Given that Messenger Post has previously advised its customers that it will raise rates due to fuel costs, has any such increase ever been passed on to Messenger Post's contractors in the form of an increase in their contract fee.

(2) What is the standard length of contract offered to Messenger Post contractors.

(3) Has the Western Australia division of Messenger Post been without a Regional Manager for the past 12 months; if so: (a) has anyone been appointed to this position on a temporary basis; and (b) why has this position been vacant for so long.

(4) What scope does a new contractor have to negotiate the terms of their contract when in preliminary discussions with Messenger Post.

(5) How does Messenger Post allocate 'ad hoc' work to its contractors.

(6) What undertakings does Messenger Post give to incoming contractors based on anticipated workloads, and are any written estimates of work given to contractors.

(7) Has Messenger Post received any complaints from its contractors that the amount of available work has been misrepresented.

(8) What provision is there in a standard Messenger Post contract to allow for increases in operating costs (other than fuel costs).

(9) What is the cause of the recently high turnover of contractors observed in the Western Australia division of Messenger Post.

Senator Conroy: The answer to the honourable senator's question is as follows:

(1) Messenger Post Couriers reviews customer rates periodically in line with movements in Transport CPI. Independently of customer rate reviews, Messenger Post Couriers reviews rates to contractors periodically, which may result in a rate increase. The most recent increase was initiated in July 2011.

(2) Messenger Post's standard contracts are two years in length with a one-year option.

(3) Messenger Post Couriers Western Australia has had an Acting State Manager for the last 12 months. Following a review of Messenger Post's management structure, a permanent Regional Manager for WA, SA, Victoria and Tasmania was appointed on February 16, 2012.

(4) Messenger Post Couriers negotiates with prospective contractors using commonly accepted benchmarks for operating a courier based business. Negotiated rates may vary as they are dependent upon factors such as vehicle type and size (gross tonnage), specialist capabilities such as tail-lift, taut liner, etc., demand and supply, time of day and day of week for services, as well as distance from metropolitan areas.

There is limited scope around the terms and conditions (e.g. insurances, liabilities, privacy and confidentiality etc.), but there is scope around the nature of work and its pricing.

(5) Ad hoc work is allocated to contractors according to their ability to meet customer requested time frames for delivery of work. The ad hoc courier industry is very competitive and ad hoc work is based on the premise of tight schedules for both pick-up and delivery. A contractor's physical location, direction of travel and current workload (i.e. future pickups and work currently already on-board and its destination) influence the despatching decisions for ad hoc work.

(6) Messenger Post Couriers provides no undertakings to prospective contractors with regard to anticipated earnings. Messenger Post Couriers' policy is to provide indicative information only on potential income. This is derived from case studies of current contractors and it varies from case to case.

(7) Messenger Post Couriers routinely fields inquiries from contractors about work volumes, payment levels and other matters. The standard procedure is to review contractor representations at the Operations Manager level, and to assess options for resolution. Contractor payment levels are monitored by Operations Managers.

(8) Messenger Post Couriers standard contract allows for contractors to make applications to Messenger Post for an increase in the contract fee in the case of material variations to the Services and/or the Service Level Agreement and the fee may be increased in response to changes in operating costs. In addition, Messenger Post Couriers reviews rates to contractors periodically, which may result in a rate increase. The most recent rate increase was initiated in July 2011.

(9) Recent results for the 2011/12 quarter ending March 2012 show that Messenger Post Couriers, Western Australia experienced a contractor turnover rate of 3.6% over the period, which is consistent with previous periods.

The long-term average of 1.2% per month equates to a yearly turnover rate of approximately 15%. This compares very favourably with other courier businesses with an industry norm several times higher not uncommon.