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More parcels and less mail delivery in 2016

The Netherlands has a growing delivery market: the parcel market is growing faster than the mail market is declining. In 2016, the total turnover from mail and parcel deliveries increased to nearly EUR 3 billion, the highest level since 2013. Most operators that transport mail, deliver parcels too. Postal operators and parcel couriers compete with each other for the favor of business senders, and make investments to improve their service. This has been revealed by the 2016 Postal and Parcel Markets Scan, which the Netherlands Authority for Consumers and Markets (ACM) has published today. This scan has been compiled using data from 28 postal operators and 6 parcel couriers in the Netherlands.

2.8 billion letters, magazines, and business mail

In 2016, business senders sent 2.6 billion letters, magazines, and business mail, which is 10 percent less than in 2015. The turnover in this category amounted to EUR 1.18 billion in 2016, which is 8 percent lower than in 2015. Consumers sent 196 million mailpieces such as letters and cards in 2016, an average of 12 mailpieces per person. In 2015, that average was still 13. PostNL raised the price of stamps in 2016 from EUR 0.73 to EUR 0.78.

350 million parcels

Businesses and consumers sent a total of 350 million parcels in 2016. Based on that volume, parcel couriers realized a turnover of EUR 1.8 billion. The number of parcels in 2016 is 12 percent higher than the number in 2015, which is an increase in turnover of 8 percent. Within the Netherlands, most parcels were sent by businesses to consumers: 152 million mailpieces. Businesses sent nearly 70 million parcels to each other. Consumers sent 7 million parcels.

Investments by postal operators

In 2016, postal operators invested in sorting machines, better software, and electric bicycles. By using machines to count, sort, and weigh mail, they are able to process mail faster and more accurately. With a special app for mail carriers, several postal operators check if their delivery operations run smoothly. By doing so, they are able to give their customers more certainty about the quality of the delivery of their mail. If a customer has a complaint, the postal company will also be able to use the data from the app to look whether something has indeed gone wrong. Several postal operators have introduced services and new products such as bicycle courier services, letterbox packages, and personalized Christmas stamps.

In 2016, regional postal operators also invested in the expansion of their own delivery networks. Wherever they do not deliver themselves, they are able to use the network of PostNL. Regional postal operators deliver over 60 percent of their own business senders’ mail themselves. They offer less than 40 percent via PostNL’s network. This share is lower than in 2015.

Investments by parcel couriers

Parcel couriers, too, made investments in 2016: in buildings, transport vehicles, and software. They are making their service more and more flexible. This can be particularly observed in the final stretch of the parcel delivery process, the ‘last mile’. For instance, automatic parcel machines are not only used to deliver parcels and to set them up for return shipments, but also to improve the internal logistics of large companies and universities. In order to decrease the number of rides in city centers, some market participants combine the delivery of parcels and retail inventories with collecting returns and with non-mail related services, such as waste paper collection.

Increasing competition on the postal market

Competition on the postal market is increasing. Overall, the market share of PostNL has declined slightly. The market share of regional operators in particular is increasing. Consumers are only able to choose next-day delivery for their letters, virtually exclusively from PostNL. There is basically no competition here. Business senders, however, can also choose 48-hour and 72-hour delivery for their mail. For these options, they can also choose from different operators such as regional operators. Business senders benefit from competition. Wherever there is competition, the tariffs increase less quickly. Next-day delivery for business mail has fewer competitors than slower mail. In 2016, PostNL’s competitors delivered 10 to 15 percent of the mail that arrives after one working day. Next-day delivery is increasingly becoming more expensive. However, the price increase of 2016 is less than in previous years. There is more competition in slower mail. 35 to 40 percent of this mail is delivered by other operators than PostNL. In the last few years, the average price of this mail has remained stable.

Parcels: switchers are the smaller customers

In parcel deliveries, PostNL has a market share of about 60 percent, which makes it the largest operator for domestic parcel delivery. The average turnover per domestic parcel slightly declined in 2016. In cross-border delivery of parcels, there are multiple operators that are more or less similar in size with market shares of approximately 25 percent. In the parcel market, several large clients are responsible for a large number of parcels: on average, a parcel courier’s top 5 customers generate 20 percent of its turnover. On average, big customers pay less per parcel than smaller customers. In 2016, the relatively smaller customers in particular were the ones switching parcel couriers.