Impact of Covid-19

The Covid-19 pandemic has had a profound impact on everything and everyone. Across PostNL, our focus has been on prioritising the health and safety of our people, partners and customers, while continuing to play a vital role in society by providing our broad range of services.

People

Our primary focus during the year was on ensuring that everyone at PostNL had a safe and healthy work environment. Our people worked with resilience and spirit throughout year, in what were particularly trying circumstances. They ensured that our mail, parcels and logistic services continued despite the limitations imposed by the pandemic.

We rolled out a range of health and safety measures in a bid to protect people against the virus at the beginning of the pandemic, then monitored Covid-19 developments on a daily basis and updated our measures throughout the year to adapt to changing circumstances. By monitoring infections across the company, we were able to introduce measures swiftly, such as mini-triage or our own contact investigations. For our people, this meant a limit on the number of workers in a facility, following flow patterns to limit the contact they had with one another, and working behind plexiglass walls. Our people also had to adjust their way of working to the new rules, incorporating the 1.5 metre social distancing and other safety measures. We also adjusted the layout of preparation centres, including placing floor stickers, signage and other forms of communication to help raise awareness. By introducing a range of measures across our sorting and delivery centres and our logistics' operations early in the process, we managed to avoid large Covid-19 breakouts and prevent temporary closures of facilities.

For office-based employees, the pandemic meant home working from March. While this involved its own challenges, we are proud of how everyone responded. We focused initially on providing everyone with the right resources at home, such as an office chair, computer and IT connections. We also organised webinars for employees on how to manage their work-life balance from home, and held virtual town hall meetings and remote stand-ups to keep everyone involved.

Our most recent employee engagement survey highlighted how much our people appreciated our response to the pandemic. They valued the quick and clear introduction of measures, the detailed and understanding communication from management, the telephone interviews and podcasts, and the many different ways we kept in contact with one another.

Despite the pandemic, and the additional stress it caused, our absenteeism rate showed a marginal increase since the beginning of the pandemic. We believe this underscores the success of the measures PostNL and our people took, providing insights into the safety of the workplace, and how seriously everyone focused on the national guidance.

Given the resilience and dedication of our people during the course of 2020, we chose to reward them with an extra net payment of €250 and a non-recurring payment of 0.5% of their salary in December 2020. Additionally, we have given them a performance-related bonus of 1% given the exceptional results of 2020, which is on top of the 2% performance-related bonus for 2020. We will also give our delivery partners €150 per route (in addition to the €100 previously announced), and will ensure our sorting and distribution partners at Parcels in the Netherlands can also reward those who are not directly employed by PostNL, but who have contributed to our excellent results.

Customers and consumers

The national and international measures taken to slow the spread of the pandemic led to a clear change in consumer behaviour, resulting in a sharp rise in online purchases. This change in behaviour was a key driver in us helping our customers grow their business.

We also experienced an accelerated decline in bulk mail volumes following the outbreak of Covid-19, which stabilised in the second half of the year. Many customers postponed direct mail campaigns until the fourth quarter of the year. And as countries closed their borders and flights were cancelled, we saw international mail import volumes drop. Driven by the lockdown measures, social distancing and a reduction in socialising became the norm. People started to sent more greetings cards and gifts using letterbox parcels in both the first and second wave of the pandemic, underpinning the value of connecting through physical mail.

For everyone's protection, we introduced contactless delivery to ensure deliverers maintained the required 1.5 metre distance from customers, maintained social distancing during pick-ups and deliveries, and all employees wore masks. Our services also became more visible during the first wave of the pandemic, and people increasingly relied on deliveries and reconnected with physical mail. Consumers identified with the value of delivering parcels, mail and other goods, and appreciated that we stayed outside so people could stay at home. This, in combination with our commercial and operational response to the huge rise in volumes, contributed to a sharp increase in our customer satisfaction scores, particularly in the initial measurement moment in May. For many during the first lockdown, our parcel and mail deliverers were the only contact they had beyond their family.

Parcels

From early in the pandemic, we saw a range of customers accelerate their digitisation programmes and increase their investments in e-commerce. E-commerce growth picked up significantly and the transition from offline to online accelerated. We saw a rise in the number of first-time online buyers and the share of existing medium and heavy online shoppers grew. To help small- and mid-sized shops move online, we provided a range of services through the MyParcels platform.

While in previous years we significantly scaled up our processing capacity at a few peak moments, in 2020 we had to introduce a more structural scale up. During the first wave of the pandemic we processed considerably more parcels than on average, while at peak moments towards the end of the year volumes were significantly higher than those at the beginning of the year. The end-of-year peak in 2020 also began earlier and lasted longer than we typically see. In total, we delivered a record 337 million parcels in 2020, of which we estimate around 25 million to be non-recurring and related to Covid-19. On peak days, we were processing 1.7 million parcels across the Netherlands.

For our B2B networks, such as Mikropakket, PS Nachtdistributie and Cargo, we saw a drop in volumes as shops and the catering industry closed during the lockdown periods. We used these networks to help process parcel volumes when needed.

The pandemic also had a profound impact on our international volumes. While international e-commerce rose, there was a drop in international mail volumes. At the beginning of the pandemic there was a reduction in available cargo space, as countries took preventative measures and some airlines stopped flying, while others only flew sporadically. We worked on finding other ways to reach countries that had shut down, such as using freight aircraft or chartering more trucks. And on a couple of occasions mail destined for the United States was delivered by ship.

Our efforts were appreciated by customers, and were reflected in the sharp increase in customer satisfaction scores at our international operations.

Mail in the Netherlands

At Mail in the Netherlands, performance was marked by accelerated volume decline in bulk mail volumes, especially direct mail, and a boost in greeting cards and mailbox gifts. Following the outbreak of Covid-19 in the first half of 2020, we saw bulk mail volumes decline, which stabilised in the second half of the year. Many customers postponed direct mail campaigns until the fourth quarter of the year.

Driven by the lockdown measures, social distancing and reduced socialising became the norm. People started to sent more greetings cards and gifts using letterbox parcels in both the first and second wave of the pandemic, underpinning the value of connecting through physical mail. On peak days during the last few weeks of the year, we were delivering 14 million mail items across the Netherlands.

To process the extra volumes, we added extra delivery days and post box collections, opened sorting centres on Sundays, and hired more people in our operations. We also spent around €4 million to provide additional support to retailers during the lockdown in December 2020 and €14.5 million in January and February of 2021, with over 85% of retail points remaining open. However, this volume increase, during what is already a particularly use period, put strain on the delivery quality of 24-hour mail.