Until 1928, Australia did not have an identification system for postal districts. An area was identified by suburb or post-town name only. In most instances, this was unique to the office concerned. However, in some instances, a suburb could be serviced by two post offices. For example, Mont Albert, a suburb of Melbourne was partly serviced from Surrey Hills and partly serviced from Box Hill.

At that stage, Melbourne had 64 separate delivery centres throughout the 27 municipalities. From February 1^st, 1928, each Postal Delivery Office in Melbourne received its own postal district number.

The Postmaster General's Department had decided to implement a Postal District identification system for the State capital cities. It was introduced, however, only in Melbourne and Brisbane. Based on the quadrants of the compass, the area was roughly divided into North, South, West and East. A further area covered the Central Business District. Melbourne also had a South East identifier. Each was then further subdivided into postal delivery areas. The Melbourne system was extended in 1961 to include the suburbs developed in the previous three decades.

The practice was also used in country NSW where the State was divided into a number of "Sorting Districts". The date-stamp for Byron Bay from 1956 to 1960 contained the code 4C designating area 4 of the Coast Sorting District. Yamba during the same period had the code 3C.

Each Sorting District was divided into seven areas numbered from 1 to 7. Albury on the NSW/Victoria border had the number 3S on its registration labels during this period. There were relatively few places that included the Sorting District code in their datestamp, postal stationery or registration labels. Those that do can be used as examples as precursors to the postcode system.

The whole system was similar to that introduced in London in 1858 when the London District Post was divided into ten areas identified by a compass relationship and post offices in each area were identified by a numeral. For example, WC2 covered post offices in the Charing Cross and Covent Garden in the West Central locality.

The purpose of the identification was twofold:

(a) to provide an unambiguous identification system;

(b) to simplify the labour intensive sorting process.

The Postal District numbering was not introduced into the Sydney metropolitan area though an opportunity certainly existed when the new mechanisation system was introduced in 1930. Instead, the Alphabetical Sorting System was in use throughout NSW including the Sydney GPO. Under this system, the primary sorting frames for both the suburban and country sections were divided into alphabetical sections. Additional sections were provided for City, Interstate and Overseas destinations.

All mail to destinations beginning with each letter was initially sorted and then passed on for secondary sorting to post-town. If the destination did not have a direct mail service, a re-sort was necessary to ensure a correct despatch. For example, a letter addressed to Canobolas would be initially sorted into "C" but would require a re-sort to "O" for Orange.

This deficiency was "handled" by using experienced sorters as far as possible for the primary sort.

Why the Alphabetical Sorting System was adopted is not known, as the system designers were aware of both the Melbourne and London Postal District systems.

However, the Postal District number was not nationally unambiguous, as a number would potentially be used in each city where the system was adopted. It was therefore necessary for the sorter to absorb additional information to enable the sorting process to be completed.

The use of postal district identifiers became well accepted over the next four decades. Its use, however, was limited to only identifying the distribution point for mail but did not lend itself to identification of smaller units. Its use was also limited to the metropolitan areas of Melbourne and Brisbane.