New Zealand Post is stopping its FastPost service by the end of the year.

Photo: 123RF

NZ Post said only 1 percent of all mail was sent using the service and during the last year it has declined by 23 percent.

From 1 January, customers wanting to send priority mail will have to use courier post services.

The company said all letter volumes were declining significantly - at a rate of about 60 million items a year.

"Despite ongoing cost reductions, this change is necessary," it said in a statement.

Standard post is unaffected.

For business customers, a new priority mail service will be available between Auckland, Wellington and Christchurch.

Joe Gallagher of the union E Tū, which represents 500 posties, said the move could mean job losses, but NZ Post had said it intended to redeploy affected staff wherever possible.

"There's lots of changes going on in post and I wouldn't like to put a panic number on it at the moment," Mr Gallagher said.

"They have been very clear to us that their preferred solution is redeployment where possible."

The change was signalled a while ago and did not come as much of a surprise, he said.

"I think it [FastPost] has reached its use by date," he said.

Customers' needs and demands were changing and they were looking for a service able to track their product from start to finish.

He said demand had increased for parcel deliveries, the logistics business and the courier post service.