Getting goods from the dock to people's door is the most expensive part of the journey. Credit:Jessica Shapiro Mr Egonidis said shipping underpants to Europe was about 10 per cent more expensive than to the United States but still far cheaper than sending something within Australia. He said that only 10 per cent of his 8000 monthly orders were from Australian customers, while about half of sales went to the US. Mr Egonidis said he used DHL Global for international orders, which delivers via domestic mail networks, and Australia Post for his domestic orders, which are usually lighter than 100 grams and too small to send with DHL. Australia Post said the disparity between the cost of shipping goods internationally and locally was due to an international agreement that meant local postal services had to deliver international parcels for the cost of a small letter.

International shipping stays cheap because containers would return empty otherwise. Credit:Fairfax Media A United States Postal Service official recently told a government hearing that the service lost money on every international package it delivered because of the agreement. "Domestic parcel pricing, on the other hand, relates to domestic market conditions," the Australia Post spokeswoman said. But logistics and management experts said a lack of competition in the local market and poor infrastructure also made domestic shipping more expensive than it should be. "They say that with a container of imported goods, it costs more to get them from Port Melbourne into our homes than it does to get to Port Melbourne," said Russell Thompson, associate professor of Transport Engineering at the University of Melbourne.

"We have very low-density cities, and that's a challenge because we have little parcels moving around in little vans, creating lots of operating costs." Associate Professor Thompson said Australia's high safety standards and fuel costs also made freight more expensive than elsewhere, while the country had failed to embrace postal parcel lockers, which were widespread in Europe and Japan. "[Parcel lockers] reduce the costs of delivery and remove the delivery failure problem of having to repeatedly visit someone when they're not around," he said. The large number of shipping containers returning to the United States and Europe also made it cheaper for Australian businesses to send their goods there, according to University of Melbourne professor of management Danny Samson. "We import so much more than we export, so the cost of putting things in containers and sending them overseas is almost done at a marginal cost," Professor Samson said.

Professor Samson said there was not enough competition to drive down prices in domestic shipping, while countries like the United States had even more efficient freight systems because of the size of their economies and the density of their populations. The Australia Post spokeswoman said the domestic parcel market was competitive and that the government-owned company's prices reflected the market conditions. "Our parcel prices remain comparable with, and in many cases are cheaper, than those offered by our competitors within Australia, who must also contend with similar market dynamics," she said.