In response to a continued lack of a solution to cover the high costs of providing a universal service, PostNL has formally requested the Dutch Minister of Economic Affairs to withdraw the designation.
According to the postal operator, its universal service obligation (USO) will lead to structural losses across the entire postal business from 2025 onwards. The post claims short-term relief measures have not materialized, that the subsidy request was rejected by the minister and that there is no legislative perspective offering sufficient improvement.
PostNL CEO Pim Berendsen commented, “For many years, all postal workers have done their utmost to ensure a responsible and high-quality postal service in the Netherlands. We have done so in the face of a structural mail volume decline of 8% to 10% annually. PostNL has continuously looked for ways to keep postal services both affordable and feasible, for example by closing locations and adapting operational processes. These measures have led to a substantial cost reduction over the years.
“We have now reached the limits of what PostNL can do within an outdated legal framework that no longer reflects societal needs. There is broad agreement on the urgent need to revise the legislation. However, a solution requires political will and decisiveness. And that is lacking right now.”
Postal service at risk
On September 5, the Administrative High Court for Trade and Industry (CBb) rejected PostNL’s request for an advance payment on subsidies of €30m (US$35m) for 2025 and €38m (US$44.5m) for 2026 to cover the cost of providing the USO, which creates “an unsustainable situation for PostNL and puts the continuity of postal service provision in the Netherlands at risk”, according to the postal operator.
In a statement on its website, PostNL said, “This is irresponsible for people who rely on post and for the thousands of people working in the postal sector. It is also unreasonable to expect a commercial company to absorb such losses when carrying out a mandatory public service. PostNL sees no other option than to request the withdrawal of the designation and urges the ministry to respond within two months.”
Minister’s proposal not viable
As part of the USO, PostNL is currently responsible for collecting and delivering mail from over 10,000 orange mailboxes five days a week, with at least 95% of items required to be delivered within one business day.
The Minister of Economic Affairs recently proposed extending the delivery timeframe to two days, and over time three days, but PostNL argues this “would not solve the structural cost issue that exists now and will continue in the years to come.”
The post added in its statement, “The proposed delivery standard of 95% is also unrealistic in practice, given the labor-intensive nature of mail delivery. The proposal offers no financial compensation for the substantial costs PostNL is required to bear, meaning the postal service as a whole will remain structurally loss-making. This is economically unsustainable. Furthermore, implementation is surrounded by political uncertainty, as highlighted once again in the recent roundtable discussion in parliament on the future of mail delivery.”
Difficult decision
The post emphasized that it has engaged in dialog for years to seek an acceptable solution for all parties. Berendsen said, “Filing this request was not an easy decision, but we are left with no alternative. Continuing in this way is no longer viable or responsible. The mounting losses caused by the USO obligations not only threaten the continuity of the postal service but also limit the development of our e-commerce business.”
PostNL has asked the minister to respond to the request within two months. This timeline aligns with the minister’s expected decision on PostNL’s appeal against the rejection of the subsidy at the beginning of November. It is now up to the minister to provide a clear perspective for the future of the postal market and to propose an adequate solution for the USO. PostNL will determine its next steps based on the minister’s decision.
In related news, UK regulator Ofcom has announced that Royal Mail will be allowed to cut its Second Class delivery service as part of its review of the universal service obligation. Read the full story