Main risk events

We identify main risk events as specific scenarios or occurrences that could trigger those risks identified in the risk assessment. In the 'Our Operating Context' chapter, we identify and describe the external developments that had the greatest impact on PostNL in 2023, which were challenging geopolitical and economic developments and the tight labour market. These key risk events adversely impacted our performance and led to a strategic focus on reducing operational costs, adapting our network capacity, and managing our staffing capacity, which we outline below.

Reducing operational costs

Rising inflation led to cost increases in areas such as salary expenses, which we were not fully able to absorb through regular price increases. At the same time, rising energy and other costs made the transportation of goods more expensive. To help counter this, we are taking all necessary adaptive measures and implementing cost control measures across the organisation. During the year, this included implementing a reduction of 200-300 staff-function FTEs at our head office and Parcels, which we will finalise in 2024 with the desired €25 million - €30 million in cost savings. At Mail in the Netherlands, we continued to optimise our delivery and sorting process and extended efficiencies across delivery routes, both of which will help to reduce costs and boost efficiency. However, 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. More information on PostNL's position on the future of Mail in the Netherlands can be found in the 'Our operating context' and the 'Financial value'chapters.

Adapting our network capacity

One of the consequences of the challenging macroeconomic situation was reduced consumer confidence, which meant e-commerce growth domestically was below expectations in 2023. We had to continuously align our network capacity with volumes throughout the year, within the constraints of a tight labour market. Volume seasonality, with extreme peaks in the build up to and during the Black Friday to New Year period, means our network needs to be highly flexible. To deal with these changes, we continued to adapt distribution routes and scaled back operations across our sorting centres, helping to safeguard customer and consumer service levels.

Managing our staffing capacity

The labour market in the Netherlands remained tight in 2023, with an ageing population, greater segmentation in the labour market, and a higher percentage of the population that works part-time as the key causes. While this made it difficult for us to recruit in some regions, with Mail in the Netherlands particularly badly affected, we introduced a number of initiatives across the company to target new employees and keep existing ones, including offering more flexible working hours, broadening our recruitment campaigns, and offering a starter's premium.

More information on these topics can be found in the 'Customer value' and 'Social value' chapters of this Annual Report.