Keeping mail accessible, reliable and affordable

Running a national mail network comes with great responsibility. As the universal service provider (USP) in the Netherlands, it is our job to maintain country-wide mail coverage and deliver on specific quality targets, which do not apply to other postal companies. In 2019, we delivered 94% of consumer mail by the next delivery day, while we are required to deliver 95%. The decrease in quality occurred mainly in the fourth quarter, which was when we adjusted our sorting processes to accommodate Sandd's mail volumes in our network. We also began receiving increasing mail volumes from Sandd, although the employees needed to process these volumes only started in early February 2020. Delivery quality over the peak Christmas period was in line with previous years. While 2019 was an exceptional year, we will do everything possible to improve the delivery quality figure in 2020, including closer monitoring of our sorting processes and deploying additional mail deliverers.

In a declining market, one of our key challenges is securing accessible and reliable postal services at affordable prices. We continue to intensify our dialogue with customers so that we can meet their future needs, working to ensure that mail remains an attractive option alongside the digital solutions that our customers have at their disposal.

Further roll out of coding system (codeerregel)

During the year we continued to invest strongly in automation, with the aim of increasing delivery quality and efficiency. Our coding system helps us to simplify our preparation process and introduces more flexibility in our mail deliveries. We finalised the introduction of the 'codeerregel', which adds codes to envelopes, on all our mail volumes. This creates the potential for further automatic sequence sorting through our SMX (sorting machine extra) machines, which will improve delivery accuracy, save costs, and help with the integration of Sandd volumes.

Combibundel

We completed the roll out of the Combibundel in 2019, which involves sorting mail into two separate bundles: one containing small items of mail and one with larger items. This creates a more efficient sorting process as we no longer have to combine small and large mail items in the sorting centres. This, alongside the coding improvements mentioned above, are important enablers of the success of our new delivery model, the New mail route, and the integration of Sandd.

The New mail route implemented

In June 2019 we introduced a new delivery model across our mail operations. Called the New mail route, we now deliver non-time critical mail five days a week instead of three days a week. This 'equal flow' model removes the sorting and delivery peaks that occurred previously, and means customers now have their mail delivered over two consecutive days, such as Tuesday and Wednesday or Wednesday and Thursday. The result is that they can better manage their process flows, for example in the production of mailings or when handling calls following a direct mailing promotion.

For PostNL, the new model allows us to spread the workflow equally over five days, meaning we can make better use of our locations and resources, while improving the efficiency of our transport, thereby cutting costs and improving sustainability. And our mail deliverers have benefited through employment contracts with longer hours, and mail that is available to deliver earlier. By the end of the year, more than 85% of PostNL's non-24-hour volume had been transferred to the New mail route.

Preparing the integration of Sandd

We began working towards the integration of Sandd in 2019, which will take effect in 2020. This involved preparing our networks, through new route planning and sorting processes, for the additional mail volumes. Ultimately, merging both networks will help us keep mail accessible, affordable and reliable for our customers.

We will keep it accessible by operating through one network, enabling us to better manage capacity and coverage across the country. We will ensure it is affordable by aligning our operational changes with mail developments and the synergies realised from the integration. And we will be able to keep it reliable by operating one network, helping us to adapt, innovate for our customers, and be more future proof. More details on the Sandd integration can be found in the chapter 'Social value.'