New Zealand Post has warned the Government its mail volume is falling faster than it anticipated last year when it negotiated a new deed of settlement.
Under that deed, the Government agreed the postal service could reduce its mail deliveries to three days a week from July 2015.
In the last financial year New Zealand Post delivered 63 million fewer letters than the year before, a much bigger slump in deliveries than it had forecast.
In a letter to its shareholding ministers the company says it will be increasingly difficult to operate commercially, even within the additional flexibility provided by the new deed.
The company is also considering the future of its service accepting payments for third parties, such as power companies, as more and more people switch to paying their bills online.
NZ Post chief executive Brian Roche says it's simply making ministers aware of the challenges the company faces.
Mr Roche told Radio New Zealand's Morning Report programme the three-day-a-week plan will not change for now.
"We can definitely guarantee it through to 2016-2017. We're not saying there are any changes in our planning assumptions.
"But our marketplace, similar to many other industries, is in a very volatile state so although our mail business is actually under real pressure we do have two other businesses in the form of packages and parcels."
The letter to Government makes clear online business is having a bigger and faster impact on some of its traditional services.
Although the rise in buying online and has led to rapid growth in the delivery of parcels, Mr Roche says it's a competitive market and won't fully fill the gap left by the decline in the delivery of letters.
The Labour Party is urging the Government to get its departments to use New Zealand Post for mail deliveries in an effort to offset the decline in the company's business.
