FIVE months after its first request was marked ”return to sender”, Australia Post has again asked the competition watchdog for the right to increase the price of a standard letter by 5¢ to 60¢.The government-owned postal service has told the Australian Competition and Consumer Commission the number of letters delivered has fallen even further than expected when its earlier plea for a price rise was rejected in December.At the time, the ACCC argued Australia Post was able to cut its costs to meet the expected decline. But in the latest application the postal service says it has increased its cost-cutting effort but is still struggling under the financial strain of providing the service, which last year lost $67 million.In its latest application, Australia Post says it expects letter volumes to fall 5.8 per cent this financial year, compared with the 2.3 per cent decline it expected when it applied last year.In the four years to 2011-12, it expects the number of letters to fall by 4.3 per cent each year.Australia Post says the global financial crisis prompted people to change their behaviour, moving towards email and the internet as a cheaper substitute – and those new habits have remained.Letter volumes peaked in 2007-08 and have steadily declined since. The service says it has taken steps to reduce costs since the initial rejection but appears to make no guarantees of future cost cuts.Under its government-imposed service obligation, Australia Post is required to maintain a network of more than 4000 post offices and offer daily delivery to most homes and businesses. It is required to obtain ACCC approval when it wants to increase prices on any of service for which it has a monopoly.In his letter to the ACCC, Australia Post’s chief executive, Ahmed Fahour, says: ”The depth and duration of the decline in letter volumes has been significantly greater than we anticipated” and the further decline in letter volumes has ”led to us ramping up our efforts in cost reduction”.