Australia Post has announced the biggest shake up of its parcel operations in its 200-year history, a response to the rise of online retail shopping which has created unprecedented demand for parcels.

The new measures of delivery include after-hours parcel pick-up locations and parcel lockers.

Australia Post is the country's largest retail network by locations, and it is suffering the same struggles as the rest of the retail sector with the internet killing off the traditional letter.

External affairs general manager Alex Twomey says the face-to-face business of post offices is down, but there are more parcels piling up in post offices than ever before.

"We are just simply seeing the decline in the amount of people coming through our doors, and more and more the public are telling us they want to interact with us either online or through an application on their mobile phone," he said.

"But on the flip side, we are also having post offices that are seeing a decline in foot traffic for bill payments as well. More and more of that is going online.

"They are also struggling with the amount of volume of parcels they are getting through.

"So you have this strange dichotomy within a single post office where their bill payments and letter products are down in sales and their foot traffic might be down, but they've got more parcels in there than they've ever had before."

Mr Twomey says 170 million parcels were sent in Australia last year.

"Around [a] 10.9 per cent increase in parcel volumes through Australia Post last year - a huge growth especially when we are considering the depressed nature of the economy and that's the global economy too, and the impact on the retail industry," he said.

"We are also seeing now for Australia Post over 70 per cent of our parcels are now generated by online shopping, which is amazing to think of because five years ago that just would not have been the case.

"In Australia you are seeing our retail spend online being half what it is in the UK and the US, so if we just even grow over the next few years to where they currently are, this is massive growth and our whole network needs to change just to manage those volumes.

"While our internet is our letters business worst enemy, it is our parcels business best friend. It just keeps driving up our volume."

Sorry, this audio has expired Australia Post plans to perfect pass the parcel ( Rachel Carbonell )

Fed up

Australian Post now transports and stores huge volumes of parcels, and customers are fed up with the traditional system of parcel delivery.

Mr Twomey says the main problem they are trying to solve is a majority of Australians are not at home to receive their parcels.

"What happens at the moment is they get a parcel sent to their home. When they're not there, they get a card in the letterbox saying come pick this up from the post office, which is often open the hours that they are at work too," he said.

"It's just not convenient and 10, 20 years ago you might have gotten one or two parcels a year, now some people are getting one or two a day if not more so we really need to change our entire network."

Mr Twomey says the changes customers will see are back-end IT changes and network changes, but the main change is Australia Post will introduce a new range of different ways to get their parcels.

"[Customers] can choose the best option for them," he said.

"The new ways we are rolling out is new parcel pick-up locations. These are ones that have extended hours including weekends where people can just drive in at any time, pick up their parcel.

"The other one we are going to be doing is parcel lockers. These have got the ability that you can register and it will send you an SMS or an email when your parcels arrived and you can pop down 24/7 and pick that up.

"These are all options on top of our existing products and services. We'll maintain all the other ones we have."