Physical mail remained an important form of communication throughout 2021, as the pandemic saw people continue to connect with friends and loved ones through mail. Sending greetings cards and gifts using letterbox parcels remained popular throughout the year.
Throughout the year we sorted and delivered a range of letters as part of the Dutch government's drive to tackle the pandemic. These included invitations for the vaccination programme, letters informing the public on how to order self-tests, and delivering two self-tests, on request, to every household in the Netherlands.
For the Dutch national elections in March we sorted and delivered almost all 12 million voting cards and 6 million candidate lists. We also delivered a total of around 1 million postal votes to 352 municipalities. In a survey following the elections, the municipalities feeded back that they were 'very satisfied' with the way we dealt with incidents and the solutions we offered.
While bulk mail volume increased slightly during the year compared to 2020, partly due to (incidental) Covid-19-related mailings, as described above, the overall downward trend continues. We saw e-commerce customers begin to (re)discover direct mailing campaigns as a distinctive and effective form of advertising.
Direct mail has proven to be effective, and compared to online media it has some unique strengths. The attention time of recipients is longer, for example, which leads to greater interest and appreciation, and a higher response rate. However, we do not expect these benefits of direct mail to offset the overall declining trend of physical mail.
In 2021 we reviewed our bulk mail portfolio, reducing the number of bulk mail products from around 2,200 to 200. Previously, we offered a wide variety of tailored products at different price points, which added complexity when it came to doing business. A simplified product portfolio will directly benefit customers as it enables us to make bulk mail propositions simple, clear and digital. It also allows customers to prepare their business mail digitally and enables easier-to-read invoices. We can also create more efficient back-office and operational processes. The new portfolio was introduced to customers with an annual volume of up to 250,000 mail items at the end of 2021, and the products became active on 1 January 2022. The roll-out to other customers will take place over the course of 2022/2023.
Project Simplicity is about simplifying our overall mail customer proposition, including product range, pricing structure, terms and conditions, and associated systems. Portfolio manager Pierre van der Vliet explains how this is an improvement for customers without limiting their choices. “Customers had to choose from 2,200 different product codes for their bulk mail. That can be confusing. We have now made a list of 200 basic products. In four steps, customers select a product that suits their needs, for example based on size and weight or delivery speed. Although this seems to limit choice, using a smarter product set-up means most customer needs can still be fulfilled. So far 12,000 customers have switched to the new system, the rest will follow in 2022/2023.
As well as being more transparent, the new structure contributes to customer satisfaction in other ways. It allows customers to prepare their business mail digitally and enables easier-to-read invoices. While customers may need to get used to the new set-up, in the end it will save them a lot of time and effort.”
This involves performing a daily delivery round from Tuesday till Saturday, except on public holidays. We are also required to deliver urgent medical items and funeral notifications on Mondays. And at least 95% of all standard single-rated domestic letters under the USO posted the day before must be delivered in 24 hours. In a declining market, one of our key tasks is securing accessible and reliable postal services at affordable prices. Having delivered over 94% of consumer mail by the next delivery day in 2021, just short of our 95% target, we are constantly looking for ways to improve quality.
For example, we have been working on a programme in which each letter is uniquely coded and therefore easier to trace. This will enable us to track letters within the delivery chain, meaning we can identify where any issues are and solve them. And we are running additional recruitment campaigns, aimed at attracting mail deliverers, as a shortage of deliverers can impact our quality performance.
Retail also plays a vital role in the accessibility of our services. Through over 3,900 retail locations in the Netherlands we help consumers with sending and receiving mail. This is also why it was extremely important for PostNL that these retail locations remained open during the strict lock down both at the beginning and the end of the year. One part of our support in 2021 was providing retailers with additional payments totalling €17.5 million, with the last payment made in December.
On 28 October, we announced that stamp prices will remain unchanged in 2022 due to the positive contribution of Sandd volumes and the non-recurring volume increase in single mail, related to Covid-19 in 2020. For business mail, we continue our moderate pricing policy.
We continue to implement cost savings initiatives, as well as moderate price increases, to offset the expected volume decline. For example, in 2021 we improved our sorting and preparation process by introducing new mail sorting units. And, as mentioned above, we also now give each letter a unique code. We streamlined our staffing operations, optimised delivery routes and rolled out additional e-bikes and vehicles to make delivery more sustainable and efficient.
We also continued to innovate our services and solutions, for example through the expansion of the MyMail service in the PostNL app, which provides users with notifications and digital previews of the mail items that will be delivered. And to meet customers' future needs, we are intensifying customer dialogue and have introduced a variety of workshops and white papers with partners. This contributes to new customers discovering the value of direct mail, and shows that mail remains an attractive option alongside digital solutions.
We implemented additional cost savings initiatives across our Mail in the Netherlands operations in 2021, which included centralising our preparation locations. During the year we closed eight locations in the Netherlands, bringing the number of locations, including sorting centres, that we operate to 26. The current plan is to reduce the number by an additional four to six in 2022.
The introduction of e-bikes, e-cargo bikes and e-scooters in phase two of the New mail route means deliverers can now carry more mail than they could on a regular bike. This greater capacity means we are able to extend delivery routes and increase the efficiency of delivery routes.
And to provide deliverers with sufficient space to organise their deliveries, and charge their e-bike or e-scooter, we opened five larger, better-equipped depots across the Netherlands. We plan to open an additional 35 new New mail route depots in 2022.
Consumers want to see services traditionally offered at retail locations, such as the sale of stamps, available online, either through our app or website.
Our digital ambition is to run an integrator model in parallel with our existing physical services, which will enable us to grow the range of services we offer our customers, while managing our e-commerce-related networks and those of our partners as one. An essential aspect of this is Digital Next, a company-wide programme that enable us to accelerate the execution of our digital strategy, leading to a smarter, more agile company that can continue to exceed customer expectations.
To offer our customers and consumers distinctive digital customer experiences, we continuously improve the customer journeys to offer solutions that fit their individual needs. By utilising real-time, data-driven decision making across a fully smart supply chain, we improve efficiency and realise a faster, more accurate delivery process. An example is the greater digital data and control accross our Parcels, Mail in the Netherlands and International operations, developing interactive dashboards with our customers and introducing new channels aimed as small- and mid-size businesses. Also the roll-out of our smart, fully-automated parcel lockers across the Netherlands is a good example.
By using our data in logistics and operations, we can better predict peak times and improve our route planning, allowing customers to view and change their order status in real time. We also increase flexibility in the chain by further automating and robotising processes for example with the introduction of our small parcel sorting centre, see chapter 'How we create value'.
To meet the increasing expectations of customers and consumers, we innovate new business models, bringing novel value propositions to the market. This helps our customers grow their business and flourish, for example by investing in platforms that act as a marketplace and offer services to suppliers and customers. We are currently doing this successfully through the Shops United and MyParcels platforms, as well as across the health and food sectors.
Investing in our data foundation, strengthening our IT foundation, and driving our digital DNA enable us to provide customers and consumers with what they want and when they want it. For consumers, this can involve offering innovative digital services through the app. For customers, helping them increase the success of their business by translating our data into actionable insights. And for operators and (digital) service providers, it could involve an open ecosystem to integrate the services of third parties.
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