This proposal concerns reordering the postal market, in which PostNL has a monopoly position and is asking for state aid.

The Netherlands postal service is under pressure. Fewer and fewer letters, cards, and business mail are being sent, while the costs of delivering the daily mail continue to rise. It is high time the 2009 Postal Act is modernised. The Committee on Economic Affairs discussed proposed amendments with experts.

Schinkel has been a critic of how the Dutch government gave mail service company PostNL a private monopoly position in the market by allowing PostNL to acquire its sole remaining competitor Sandd in 2019. In his view, services have deteriorated while prices have increased. PostNL has the universal service obligation to deliver consumer mail daily everywhere in the Netherlands for no more than the regulated stamp price. According to the company, the service is no longer profitable and the Dutch government needs to subsidize. The main objective of the amendment to the Postwet is to recreate a healthy postal market. The Roundtable considered this, as well as possible consequences for competitors, customers, and postal works.

‘Exceptionally bad’

The round-table discussions included members of parliament and representatives from industry competitors, trade unions and the Netherlands Authority for Consumers and Markets (ACM). Schinkel was critical of the proposed amendment, calling it ‘exceptionally bad’.

Schinkel explains his position in more detail: ‘The Ministry proposes to abandon the regulated low release rates for regional deliverers, which will further strengthen PostNL’s market dominance in letters’. Under the current Postwet, smaller postal companies that deliver mail regionally can hand over letters that need to go nationwide though PostNL’s monopoly network at a regulated, relatively low tariff (uittarief). The price cap was meant to help competitors survive next to PostNL. If the government drops it, regional players will likely have to pay much higher tariffs to use PostNL’s network. That makes it harder for them to compete, which in practice strengthens PostNL’s dominant position.

The Postwet also limits the maximum stamp price PostNL can charge citizens for sending a standard letter. The proposal is to allow PostNL unconstrained pricing,  as long as PostNL’s overall profitability on letters stays below a certain maximum. Schinkel criticizes this so-called ‘rate of return regulation’ as softer oversight, which induces strategic cost allocation and production inefficiencies. He warns too that a more dominant PostNL will continue to make demands for aid from the state.

Alternative

As an alternative market order, he and other experts advocate nationalising the letter delivery infrastructure that PostNL holds and auctioning off licenses to use it together with a lean form of the service obligation that is democratically chosen.

Shortly after the Roundtable, PostNL was denied a request for emergency subsidy by the Trade and Industry Appeals Tribunal (CBb). Upon hearing this decision, the company requested to be relieved of its mail service obligation. Treatment of the law has subsequently be postponed.

Schinkel's invitation to participate in this round table as an independent academic was based on his expertise in market regulation and competition. He has written extensively on the topic and contributed to the public debate on developments in the Dutch postal service, including in NOS Journaal, Financieel Dagblad, NRC, de Volkskrant, and Groene Amsterdammer.
A recoridng of the Parliamentary Committee hearing are available here (in Dutch), with Schinkel’s contribution from 1:42.