An overhaul of how Australia Post will operate is on the cards, driven by a decline in letter deliveries while parcel services are booming.
The federal government has launched a discussion paper aimed at modernising the postal service and making it more financially sustainable.
While Australia Post delivered more than 500 million parcels during the past financial year, letter deliveries have been rapidly falling.
Since a peak of addressed letters of 8.5 letters per week in 2007/08, Australian homes now receive just 2.4 letters per week.
The discussion paper said the number is expected to halve again in just the next five years.
"While traditional postal services usage declines, Australians are increasingly relying on Australia Post's nationwide parcel delivery services, which operate in a highly competitive market," the discussion paper said.
Finance Minister Katy Gallagher said the review would see how Australia Post locations across the country would be able to operate successfully into the future.
"The government is committed to ensuring that Australia Post continues to modernise to ensure that it is financially sustainable and continues to provide employment opportunities and deliver essential services to all Australians," she said.
"Australia Post has been a constant driver of economic activity for businesses and consumers across Australia."
Earlier this year, the postal service reported a first-half loss of $189 million, with Australia Post set to report its first annual loss since 2015.
Despite the talk of modernisation, the paper said Australia Post would remain in public hands, regardless of the changes made.
Communications Minister Michelle Rowland said the review would help Australia Post adapt to changes.
"The consultation ... will ensure Australia Post maintains the long-term financial stability it needs to continue supporting small businesses and providing essential community services - particularly in our rural, regional and remote communities," she said.
"Australia Post is a cherished national publicly owned institution that provides invaluable services to Australian consumers and businesses."
The chief executive of Australia Post told a Senate estimates hearing last month that rules requiring the postal service to deliver letters five days a week should be reviewed in light of falling letter numbers.
Figures showed bills and bank statements made up nearly 98 per cent of letters delivered.
Public consultation on the discussion paper will be open until April 27.
