Australia Post chartered 17 planes a day to deliver parcels as online shopping exploded in the coronavirus pandemic.
Australia Post chief executive Christine Holgate said demand for processing passport applications had fallen 90 per cent, but the parcel part of the business had boomed by 90 per cent. The average weight and size of parcels was also up by 40 per cent.
"We've had 10 weeks operating like the size of Christmas," she said, speaking at a Committee for Economic Development of Australia state of the nation forum on Tuesday.
"These were massive operational challenges which brought huge costs."
Australia Post had seen a big increase in post redirection as people moved to work from home, she said. The agency also received special permission to carry medicines, and had transported food parcels.
It was forced to charter flights to get parcels around the country because Qantas had suspended most of its domestic flights. The agency also set up 16 pop-up parcel-sorting facilities, some the size of a football field, and staff had volunteered from around the business to help.
"We didn't want to stand down our employees because there's always that risk that if you don't operate in a crisis you can became irrelevant, so we wanted to keep working," Ms Holgate said.
She said 4500 staff had shifted to work from home within three days, and "lots of employees" had taken leave in April to keep costs down.
The agency faced huge extra costs due to the pandemic, including having to bring in contractors and outsource work, and cover extra expenses such as personal protective equipment and social distancing.
Many small businesses had come to rely on Australia Post to stay afloat as they turned to online shopping.
Ms Holgate said 200,000 households had shopped online for the first time during the pandemic, and, at the peak, 3 million people had visited the Australian Post website in one day.
Customers had been demanding, with the message: "Where's my parcel and I want it tomorrow, even though the volumes have just exploded."
Letters were only 20 per cent of Australia Post's business, she said.
In April, the government relaxed Australia Post rules so interstate letters could be delivered in an extended five days, it need only deliver every second day in cities, and didn't need to keep all its post offices open. It is no longer offering a priority letters service.
The Communication Workers Union accuses Australia Post of planning job cuts, saying staff have been briefed that one in four delivery jobs will disappear under a new system for delivering letters and parcels.