An Integrated Parcel Delivery Market for the Growth of e-Commerce in the EU

ecBy the end of November 2012, The European Commission published a green paper entitled “An integrated parcel delivery market for the growth of e-commerce in the EU“.

E-commerce is widely acknowledged as a key contributor to economic growth and increasing employment levels across the European Union. The Commission’s Communication on ecommerce and online services identifies the delivery of goods purchased online as one of the top five priorities to boost e-commerce by 2015 and its importance has been reiterated by the Council of the European Union and the European Parliament. Delivery is indeed critical as it has a substantial impact on facilitating e-commerce trade and is a key element for building trust between sellers and buyers.

The commercial and – more broadly speaking – economic relationship between e-retailers and consumers is characterised by a series of complex logistics operations. The term “delivery” as used in this document refers to the shipment of physical goods ordered on line up to the point of final delivery when they reach the end customer. Many operators play a role in this delivery process. In this document they are referred to as ‘delivery operators’ and they include: carriers, postal and express operators, and other logistics providers. For the purpose of this Green Paper, parcel is defined here in the broadest sense and includes all items weighing up to 30 kg.

The way goods are purchased and delivered in Europe is undergoing a rapid and fundamental change. As EU consumers increasingly look for and resort to online purchases, notably across borders, there is a growing need for a delivery system that meets their expectations and works smoothly to facilitate their daily lives, thereby generating greater confidence in, and increased use of, e-commerce. The performance and affordability of the delivery system is also a key driver of the sustainability of the business models of many SMEs and in particular of their ability to serve their customers. As SMEs are the driving forces of innovation and growth in Europe, improving the overall delivery system for goods ordered online in Europe can be expected to yield very significant results in terms of growth and jobs.

Many surveys and industry reports, as well as interviews with various stakeholders conducted during the preparation of this Green Paper converge and confirm the analysis of delivery services as presented in the Communication on e-commerce and online services.

Cross-border delivery is considered to be an obstacle by 57% of retailers, while 46.7% of consumers declare they worry about the delivery in cross-border transactions. Delivery concerns and those relating to products returns are the top two concerns of consumers in relation to online shopping. Delivery failure, damaged or lost items and high delivery costs are also among the top ten concerns of consumers, contributing to low consumer confidence in cross-border e-commerce. Confident consumers will be increasingly inclined to buy on line if they are confident that their purchases will arrive in good condition, within the announced time frame, and there are easy to use return procedures in place.The increased availability and use of new technologies offers a new range of opportunities to improve the quality of delivery services as well as customers satisfaction. The emergence and growth of social networks has also had a significant impact on the way consumers interact with brands and buy goods on line. Innovative means of electronic communication between e-retailers, service providers and customers can contribute to more efficient and convenient delivery and return processes and higher quality perception. A better functioning e-commerce market will deliver tangible mutual benefits to consumers and SMEs, as well as all actors and industry sectors involved in e-commerce activity.

The importance of shipment and delivery is further amplified in the international context. As more consumers buy from Asia-Pacific and North America, and more European e-retailers seek to export to these regions, trade flows between them are rising sharply. In this context, shipping and delivery elements are even more complex, evoke an additional set of concerns and security considerations and represent a major challenge, but also a unique opportunity for the development of European e-commerce, and notably for SMEs. A more appropriate design of the delivery chain for e-commerce in the EU would also have
positive implications for a number of policy areas such as:

􀂾 Cohesion: making e-commerce benefits accessible to all citizens and businesses, regardless of their size, via well-functioning delivery operations across Europe.
􀂾 Employment: ensuring responsible employment conditions in the delivery sector, which operates under intense pressures to reduce costs and increase flexibility.
􀂾 Innovation: promoting the widespread use of new information technologies in delivery systems having immediate benefit for all citizens and businesses, and adapted to the new social media environment.
􀂾 Environment: promoting sustainable development and optimised delivery logistics to allow for more energy savings and an overall reduction of negative externalities.
􀂾 Competitiveness of European industry: building on the strengths of the European industry (e-retailers and delivery operators) to promote investment in a European delivery network which faces intense competition in the international environment.

This Green Paper examines how the e-commerce and delivery markets in Europe are evolving, explores what is required for the creation of a Single Market for delivery, analyses the key challenges for the different actors, and highlights the opportunities for improving the delivery process to the benefits of citizens and businesses, in particular SMEs. On the basis of the information gathered through the consultation, the Commission will identify more precisely the issues to address and draw conclusions, in Spring 2013, as to the set of actions to take for completing the single market for parcels.

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