Next day delivery is on the cards for residents in Sydney, Melbourne and Brisbane as Australia Post launches a targeted metro service to keep up with demand.

The new service will offer a delivery time frame guarantee with extended lodgement times both for online stores and warehouses.

Currently available only to select retailers, Australia Post hopes to expand into more markets both geographically and online in the coming months.

“We’ve been listening to our customers, and know they expect more certainty, simplicity and speed when ordering online. The Australia Post Metro service raises the bar for customers – prioritising next day delivery in metropolitan areas,” chief executive Paul Graham said.

Delivery costs will be set by retailers and items for delivery will be prioritised for Metro Services customers across Australia Post’s warehouses.

Mr Graham said they would work with retailers to ensure distribution centres prioritised metro service orders.

It was essential Australia Post keeps up with surging demand, particularly in the busy summer period, federal communications minister Michelle Rowland said.

Australia Post is looking to modernise its service after posting a disappointing profit of $23.6 million for the six months to December 31, down 88.2 per cent from the 12 months prior.

“The Albanese government has consulted the community on modernising this trusted national institution so it can continue to meet the needs of Australians now and into the future,” Ms Rowland said.

“Improvements to the parcels business including increased frequency and choice was a strong area of feedback, and it is pleasing to see Australia Post continuing to innovate to meet the needs of customers.”

– AAP