Our business model

Our business model is developed to maximise the value we create for customers through three essential logistic activities: collect, sort and deliver. Over time, we have built dense networks and state-of-the-art processes throughout the Benelux and beyond, while divesting non-core activities. As we operate in a dynamic market, we are continuously enhancing our business model to adapt to external developments, and collaborate with customers on implementing new, increasingly digital, solutions. We have successfully transformed from a business dominated by mail, to a full-service e-commerce logistics and postal provider. The acceleration of digitalisation helps us transform the way we do business and enhance our business model to improve our competitive position.

We are focused on offering consumers and customers the best delivery options, both within the e-commerce market and in mail delivery, while managing our networks to adapt to the growth in e-commerce and decline in mail. This involves remaining flexible, by continuously aligning our network capacity with volumes, as well as optimising routes, staffing and our fleet within the constraints of a tight labour market. This includes maintaining a staffing overcapacity, when necessary, to create a buffer, enabling us to maintain the necessary levels of flexibility to deal with peak seasons, thereby safeguarding customer and consumer service levels. Our committed people play a crucial role in fulfilling, and where possible exceeding, the promises we make to customers.

Parcels

Our ambition is to be the favourite deliverer for customers, consumers and across society. We are helping to shape the growth of e-commerce by creating a strong sending and receiving network, providing customers with data and insights to help them develop their e-commerce offerings. Our Parcels solutions range from delivering standard parcels to more tailored services, such as time-critical delivery. E-commerce is shaping the future of retail, and we help drive this vital sector through IT, network and infrastructure investments, such as processing small parcels. At the same time, our digital platforms enable us to offer e-tailers and consumers greater control over sending and delivery. Together, these factors enable us to focus on optimising our revenues while creating greater customer value by providing more data and insights, helping them develop their e-commerce offerings. Within logistics, we are broadening and strengthening the e-commerce logistics chain. For example, we help e-tailers grow online by supplying fulfilment solutions, we offer customers time-critical services, and we enable small- and medium-sized enterprises (SMEs) to collect and return parcels easily and efficiently. We provide customers with international delivery solutions through Spring, a provider of global e-commerce solutions. Spring is also providing customers with more options in logistics solutions. And we are increasingly using the integrator model, which enhances and strengthens our existing physical services and involves integrating operators' services into our own.

Mail in the Netherlands

Physical mail continues to have value for society. For many, physical mail provides a valuable connection between friends and loved ones, and especially when they receive greeting cards, personal letters, or presents, mail is an essential means of communication. At the same time, direct mail marketing enables businesses to focus on the sensory experience of their customers, with both look and feel impacting buying decisions and helping strengthen B2C connections, thereby unlocking a potential new customer base for e-commerce players.

As the designated universal service provider (USP) in the Netherlands, our duty is to provide accessible, reliable and affordable nationwide postal services with specific delivery quality targets, while also providing employment for many thousands across the country.

However, over the last decade we have faced mail volume decline of around 8-10% annually, fuelled by the ongoing rise of digital communication. Today, far fewer customers require and expect the 24-hour delivery window that was once the industry standard. Our current network and the costs associated with it are no longer in proportion to the current and expected 24-hour volume. At the same time, structural shortages in the labour market mean we are trying to fill over 1,000 mail delivery vacancies with a direct influence on, for example, quality.

For more than 10 years we have deployed a wide range of measures to improve efficiency, cut costs, and keep our mail business financially healthy. However, while we have done everything possible, we foresee this strategy of cost savings and price optimisation no longer being sufficient to provide the sound financial base we need to invest in our people, our network, and the future of postal services for our customers. If we want to keep mail reliable, accessible and affordable for everyone in the Netherlands, we need to look at changes to the current service framework, and both the universal service obligation (USO) and the entire mail business need to evolve with this. Without these changes the USO, as of today, and over time the entire mail organisation will be structurally loss-making, which is unsustainable. More information on PostNL's position can be found in the 'Our operating context' chapter.