New parcel sorting machines at Australia Post are causing havoc across the country's mail network, with an estimated 40,000 parcels misdirected every day.

The new machines were installed late last year in Sydney and Melbourne at a cost to Australia Post of about $500 million.

They are faster and handle bigger parcels, but the ABC understands about 20 per cent of Australia Post's parcels are being sent to the wrong place because of the new machines.

The figures fluctuate daily, but one internal document seen by the ABC shows 32,911 parcels went unsorted in one day because of the problems.

The machines, which Australia Post has described as "state-of-the-art", cannot read some barcodes and sometimes confuse a parcel's "to" and "from" addresses.

One package destined for Melbourne from Sydney last month went to Melbourne, but was sent back to Sydney, then to Wollongong, then Brisbane, Melbourne and back to Sydney again, before eventually arriving at its destination in Melbourne more than three weeks later.

Simon Karis from Polyester Records sends dozens of parcels every week.

"We used to be able to say maybe it will be there overnight, but it seems to be a minimum of about a week at the moment," he said.

No 'systemic issues' says Australia Post

Australia Post declined to be interviewed, but in a statement said the figures were "inaccurate and misleading".

"Australia Post's figures show currently only 0.5 per cent of all parcels processed in our network are missorted - and missorted does not mean delivered to the wrong address," it said.

"Missorted parcels can occur due to a range of issues such as incorrectly labelled addresses and unreadable barcodes.

"While we acknowledge that issues with parcel delivery can occur from time to time we would like to reassure our customers there are no systemic issues with our national network.

"We're committed to providing our customers with excellent service and our people strive to do this every day."

'Mortgage machines'

The Communication Workers' Union said there have been large scale problems with parcel sorting since the machines were installed.

"Unfortunately it hasn't been working properly so the staff have had to bend over backwards to make sure customers get their parcels on time," the union's secretary, Joan Doyle said.

"It's creating work for a lot of casual employees but we all know that it's not sustainable, that this problem needs to be fixed," she said.

Staff and casuals are doing so much overtime they are referring to the new sorting systems as "mortgage machines" because they use the extra income to pay off their debts.

Ms Doyle said the machines were manufactured in the Netherlands and constructed in Australia, but rely on five different add-on IT systems, which do not function well together.