ShopMate, which created fake US addresses for Aussie consumers, will be closed in February

Australia Post will shutter its special service that offered locals a US address for online shopping delivery as Covid freight issues bite.

Australia Post will close its US freight forwarding business ShopMate, a service that sets up fake addresses in the US for Australian shoppers.

A spokesman for Australia Post said the closure of ShopMate after more than seven years was as a result of changes in the global economy.

The national carrier has alerted users of ShopMate that the service will close on February 25 and that any parcels still held in the ShopMate centre after January 17 to be returned to the US merchant and fees possibly charged.

ShopMate became highly popular among consumers during an online shopping boom as it allowed them to sidestep the problem of many US companies refusing to ship orders to Australia by allowing them to use fake addresses in America set up by Australia Post.

Australia Post says there was a drop in ShopMate parcel volume of 28 per cent year-on-year, and it is forecasting the trend would continue. Picture: Peter Ristevski

Australia Post had set up a warehouse in the US state of Oregon full of US addresses with online purchases made with American companies shipped to the ShopMate “US address” and then re-routed to Australia for an extra charge.

The initial popularity of the service was fuelled at the time by a strong Australian dollar, which traded just under parity with the US dollar.

As well as a loophole in the law, later closed after a highly public and bitter campaign from Australian retailers, which didn’t charge GST for goods under the value of $1,000.

But changes in use and Covid-related issues means it will now cease, Australia Post said.

“As a result of international delivery impacts and changing economic conditions, Australia Post will be ending its ShopMate service on 25 February 2022,” a spokesman said.

“Until then, our customers can continue to use ShopMate to forward any parcels purchased during the busy US Sales and Christmas shopping period,” he said.

“A number of alternate services are available, including VPost, operated by our ShopMate partner Singapore Post, which allows customers to ship to Australia from the USA, UK, Japan, China, Malaysia, Thailand, Taiwan, Singapore and Indonesia.”

In October there was a drop in ShopMate parcel volume of 28 per cent year-on-year, with Australia Post forecasting the trend would continue.

The closure of ShopMate also comes as there is a global shortage of aircraft and a significant reduction in passenger flights operating to Australia, and postal operators around the world experiencing limited international flight capacity.

The service was also hit by growing parcel delivery charges with often ShopMate users not aware of the full cost of delivery to Australia until their parcels arrived in the US warehouse.

Around 3 per cent of total registered ShopMate customers are regular users of the service.

When ShopMate was launched in 2014 it was met with immediate condemnation from many Australian retailers, including a peak retail body representing Australia’s biggest and most powerful retailers, such as Coles, Woolworths, David Jones and Bunnings.

They came out swinging against Australia Post’s ShopMate, which some claimed helped consumers avoid GST and customs duties on online purchases.

Retail billionaire Solomon Lew had labelled the launch of ShopMate in 2014 by a government owned entity such as Australia Post as “incomprehensible” and a failure of public policy.

Retail billionaire Gerry Harvey — whose wife and Harvey Norman boss Katie Page was on the ANRA board — accused Australia Post of “aiding and abetting” the avoidance of GST.