The Dutch postal market is at an impasse. PostNL holds a monopoly on letter mail delivery; service quality is deteriorating rapidly, and prices are rising sharply (in some cases by 150 to 300 percent). At the same time, the company claims that its letter mail service is loss-making and is demanding subsidies or seeking to shed its public service obligation altogether.
Dutch economists Marco Haan and Maarten Pieter Schinkel argue in a new article in ESB for a fundamentally different approach: a regional concession model that reintroduces competition into the postal market. Both professors are renowned academics with specific expertise in competition economics and have long had the postal market in their sights.
How did we get here?
The problems in the postal market are partly the result of a controversial policy decision in 2019. Then-State Secretary Mona Keijzer approved PostNL’s takeover of rival Sandd, in breach of a merger prohibition issued by regulator ACM. That decision was later overturned by the courts — but by then, PostNL had already dismantled Sandd. The only competing national letter mail network had ceased to exist.
Since then, PostNL has enjoyed a virtually unchallenged monopoly. The current Postal Act amendment threatens to entrench that position further: delivery requirements are being relaxed, regional postal companies’ access to the PostNL network is being abolished, and price regulation is being replaced by a return cap applied to the entire postal business. In short: less competition, less oversight, more market power.
The alternative: putting regions out to tender
Now that PostNL wants to hand back its Universal Service Obligation (USO) — the public duty to which the company historically owes its position in the letter mail market — it follows logically that it should also transfer the underlying postal infrastructure. The new Postal Act should lay the foundation for restructuring, opening up, and reintroducing competition into the letter mail market.
Haan and Schinkel propose a three-step approach. First, PostNL’s letter mail infrastructure — sorting centers, postboxes, and existing contracts — would be separated and brought into public ownership. PostNL would then continue as a pure parcel delivery company.
Next, the country would be divided into five regions, each linked to an existing sorting center: North, South, Southwest, Northwest, and Center. The government would retain ownership of the infrastructure while putting each region’s operations out to public tender, similar to how infrastructure manager ProRail owns the rail network, while NS and regional operators run trains on it.
Finally, concessions would be auctioned periodically, for example, every five years. Regional postal companies, foreign players such as BPost or DHL, and PostNL itself could all bid. To prevent a new national monopoly from emerging, any single party would be limited to acquiring at most two regions.
What does it deliver?
The model restores competition — both for and within the market. Large senders such as the Dutch Tax Authority could offer their mail to multiple regional carriers and select the best price-quality combination. Auction revenues would make the actual costs per region transparent, making subsidy claims far easier to scrutinize.
The economists acknowledge that the transition would be complex, but point out that the Netherlands has extensive experience with concession auctions — including for motorway service stations and radio frequencies.
Back to the drawing board
Haan and Schinkel’s conclusion is clear: the current amendment to the Postal Act must go back to the drawing board. Now that PostNL wants to return its public service obligation to the state, it is only logical that it also transfers the associated infrastructure. That creates the opportunity to restructure the postal market — making it more efficient, more transparent, and genuinely competitive.
For its part, the minister has deemed it “not opportune” to change postal carrier, just as the delivery requirements — at PostNL’s request — are being relaxed.
Walther Ploos van Amstel