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Legislation prohibits anyone other than Australia Post delivering letters less than 250 grams and they must be carried at a uniform rate across Australia. This legislated monopoly is not necessarily a blessing. Standard letter postal services are labour intensive rather than capital intensive, making it difficult for Australia Post to cover costs with the price of a local postage stamp. Streamlining and minimalising expenses in standard mail delivery have long been a priority for Australia Post, the most notable adoption being the postcode system of mail sorting.

In 1967 four digit postcodes were allocated to every mail delivery area in Australia, and in 1968 Post Office-preferred size specification envelopes were introduced. By that same year Australians were addressing 75 percent of mail using postcodes. Seen at the time as a world leader in postal service mechanisation, Australia Post installed letter indexing equipment at its newly opened $6 million mail exchange at Redfern in Sydney.

Australia Post’s plan was to install the new sorting system at the Melbourne mail exchange a few years later. The system’s implementation at Redfern however was poorly handled, resulting in staff dissatisfaction and industrial relations problems. By 1972 Redfern had experienced a 10 percent fall in productivity while productivity at the non-mechanised Melbourne exchange had increased by 13 percent. The mechanisation rollout was put on hold but automation was persevered with at Redfern and industrial unrest continued into the 1980s, culminating in a mail strike in September–October 1985. Finally a modernisation agreement was reached between Australia Post and the union, the Redfern centre was decommissioned and a network of suburban and regional mail exchanges opened.