As previously explained there are exceptions to the standard delivery model, at least for some operators who choose to differentiate their logistical operations either in their entire cross border value chain or at least in some country destinations. For example, some NPOs who operate a parallel international network often use this broader cross border network to facilitate their international operations. Another example of differentiation to the standard model is when instead of contracting the NPO of the destination country, to contract private (alternative) operators in order to perform the cross border delivery. Reasons for this strategy are mainly pricing or QoS considerations of the NPOs of the sending country.

Most of the cross border transportation itself is outsourced. The motivation for that is not only to reduce the (higher) transportation cost by means of finding cheap(er) providers, but also by means of correcting costs occurred due to trade and network imbalances.

The consultation has confirmed that, at least in the NPO's cross border deliveries, the standard delivery model, as described by FTI (2011) is the most usual way for NPOs to fulfil the cross border delivery. The University of Antwerp (2015) in a study conducted on behalf of the European Commission show that in the case of European Postal Operators, even for cross border destinations as short as 10km away, such as from the Netherlands to Belgium, parcels still need to be loaded from the regional depot to the national sort hubs to be sent later for cross border delivery. However, on the basis of quality and pricing considerations, alternatives or exceptions to the standard delivery model, at least in a subset of countries, do apply.

National postal operators that maintain separate operations for parcels and letter markets include Royal Mail, La Poste, TNT and Deutsche Post, Where a National Postal operator does not maintain separate operators for letters and parcels, those products are collected together, but they are sorted separately. Priority products will of course follow the priority stream. Generally speaking parcels and express products are distributed separately from packets.

The traditional cross border parcel delivery route involves cooperation between 2 domestic national postal operations. FTI(2011) confirms that typically after collection and primary sortation in the originating country the cross border parcels are transported to a hub where they are sorted again according to their place of final destination. From there they are shipped to foreign countries either by air or land. Once in the destination country parcels are collected and again sorted then transported to the appropriate are of the country where they undergo a secondary sortation. They are then transported to the relevant delivery office and from there they are delivered to recipients.

In the COMP/M. 6570 merger case of UPS and TNT, the integrator's business model is very briefly described . The operational and information management infrastructure of the integrators is largely developed around the concept of hub and spoke system. It normally involves pick up from the premises of the customer, processing and sorting in the sorting centres and hubs, line haul or air transport (depending on the distance and the time sensitivity of the shipment) to the main hub, transport by trucks and vans in the local hubs sorting and final dispatching (by vans) to the final recipients. The network supporting this operational sequence is single and sophisticated, allowing visibility or even real time traceability. That allows the express segment to offer cross border delivery services of added value to their customers, although at a higher price.

As all four integrators either own or exercise full control over the infrastructure and the IT systems facilitating the cross border delivery, in this case there is no cooperation model in place, but a single-operator model that is managing the cross border delivery.

In the sections that follow we will try to shed some light on the operational characteristics of the cross border parcel operations. For this purpose we base our presentation on desk research, on the replies of the public consolation that was conducted in view of this Impact Assessment and on the results of a Study that was commissioned with the aim to explore the cost structure of the cross border delivery and its implication on the price setting and the overall profitability of the cross border products.

According to CE (2012) the choice of cross-border co-operation model designed by delivery operators to facilitate their cross border deliveries is driven by four main factors: price and quality of delivery, reciprocity, and the presence of own delivery networks. Information on prices and quality of physical delivery and associated data (e.g. information used for cross-border tracking of parcels) are of course decisive for delivery operators’ choice of co-operation partner. Although NPOs often co-operate with each other, they do not always do so if they get better quality and price offers from other operators. According to CE(2012) reciprocity is another factor that to some extent affects the choice of cross-border delivery partners, in the cases that a potential agreement involved the mutual cooperation for the cross border delivery in both directions (operator A distributes the parcels of operator B and vice versa). Finally, the choice of delivery partner is influenced by the presence of the delivery operator in the country of destination of the parcels. One has to note that the cooperation model and its characteristics are dependent on the type of parcel to be sent (packet, parcel, or express product) as in most of the cases there are separate streams to organise each specific delivery. Finally the operational characteristics are dependent on the urgency of the consignment. Time definite (express) and day definite (deferred) or standard parcels are generally handled by different operational streams.

With the possible exception of the 4 main network integrators (DHL Express, UPS, TNT Express, FedEx), who they either have a 100% ownership or full operational control over their cross border network, most of the other cross border delivery providers identified in the previous sections cooperate with other operators to be able to fulfil all legs of the cross border delivery. CE (2012) has identified the following cooperation models for the B2C e=commerce driven cross border delivery:

Operationally, the cross border B2C parcel delivery largely depends on the choice of the operator initiating the cross border fulfilment and its level of operational control and ownership over the cross border transaction.

The Universal Postal Union (hereafter UPU) headquartered in Switzerland, part of the United Nations, representing 192 member countries, with its national postal administrations worldwide, publishes a similar database that gives the following information for equally value-added parcels, standard parcels as well as insured parcels (this time broken down by inbound cross border and outbound cross border (expressed in Units):

We now present the data from the Postal Statistics Data base (reference year 2013) and refer to total inbound volumes of parcels circulated by the NPOs as well as the total amount of inbound ordinary (standard) parcels circulated by the NPOs, broken down by country, for year 2013, expressed in 000s.

The volumes and the market shares that each operator possesses depend on the relative strength of the Operator and on its penetration in each segment of the market. National Postal operators of the bigger markets often have stronger market position also in the cross border market segment than smaller ones do.

As we explained National Postal operators are also active in the CEP segment of the market, offering a quite diverse product portfolio, which ranges from a pure ordinary parcel to a more sophisticated service that depending on the Operator could be positioned either on the deferred or the pure express segment of the market.

Hermes is present in the UK , Austria , France, Italia , Great Britain, and Russia and a partner in Switzerland and Benelux. According to the corporate website, In Hermes UK delivers more than 200 million parcels per year through a network of 5.000 parcel shops and 10.000 self-employed couriers. In Austria the company offers 1.600 packet shops and a nationwide pick up drop off possibility. In Italy it owns a network of more than 1.000 drivers.

Hermes Logistik Gruppe (HLG) specializes in the B2C segment of the market offering CEP services in Germany and outside. It operates 14,000 ParcelShops in Germany offers alternative B2C solutions nationwide by relying in convenient opening hours and delivery times. According to the information published on the corporate website one in three B2C parcels in Germany are delivered by the Hermes Logistik Gruppe while the company offers a range of customer-oriented services such as three-hour delivery time slot, text messages for direct deliveries to a ParcelShop, Saturday deliveries, deliveries left with neighbours, holiday storage etc, through an owned information system "Shipping history". The company's network relies on a system of self-employed (life style) local couriers but has also approximately 11.000 employees, including the Hermes OTTO staff .

As we explained above Deutsche Post/ DHL Group provides through their Post - eCommerce - Parcel division, cross border parcel services . Apex Insight (2015) report that in November 2013 Deutsche Post announced their plans to expand their German division beginning with its takeover of its parcel delivery operations in other European Countries. Deutsche Post transferred its existing parcel delivery operations in Belgium, Netherlands, Luxembourg the Czech Republic and Poland and lately, Austria , from DHL to the Mail and Parcels division. The Mail division which in the past was focusing only to Germany is committed to focus on B2C delivery. Pursuing a 4 year strategy to target growth in the world’s emerging markets and by tapping the global e-commerce boom the company focuses to become the “number one provider” of cross-border logistics for the e-commerce sector on key international trade lanes, and gradually export its German e-commerce parcel “success model” to other countries in Europe, (including Asia and the American continent).

According to La Poste Annual Report (2014), GeoPost's broader international strategy aims at copying the company's national strategy, internationally; therefore, it strengthens a road network in Eastern Europe and Asia and develops a network in South-East Asia and in Africa.

GeoPost is operating under the brands "Chronopost" in France and Portugal, "Exapaq" in France, "SEUR" in Spain, "Interlink" and "DPD" in UK and "DPD" in the rest of Europe

In the Express segment they offer next day delivery in Europe, and express services in the rest of the world. Both segments are served through a range of different products each of which including different characteristics.

DPD, the international "brand" for Geopost, offers deferred and express services internationally covering Europe and 220 countries around the world. In the deferred segment they offer services with delivery times 1-4 days in Europe, and within 7 days in the rest of the world.

According to the Royal Mail Annual Report (2014) GLS experienced a growth in revenues and in volume (8%), and value (of 7%) balancing the Groups bottom-line in 2015 (estimated figures). According to Apex insight the total parcel volume circulated through the network of GLS was 404 million parcels in 2014.

GLS is the Royal Mail's Group European parcels business. GLS, founded in 1999, is established as a pan-European parcel network service, offering delivery services in 37 countries. Through acquisitions and partnerships and as well as direct investments the GLS network was created which currently covers directly 18 countries and indirectly (through partners) the rest of the Europe. It covers equally the B2B and the B2C segment, both domestically (within each country where it operates) and internationally (across Europe). It fulfils its deliveries through a road based network, offering deferred (less time sensitive) delivery services.

As we already discussed, FedEx plans to acquire TNT Express, offering a 4,4 bn€ bid in order to profit from the latter’s developed European ground delivery network and strong knowledge of the European market . This strategy is aligned with FedEx intention to strengthen its presence in the European market.

FedEx, a global logistics provider, offers an air, ground and sea network to link more than 220 countries and territories around the world. The company provides a broad portfolio of transportation, e-commerce and business services through companies operating independently under the FedEx brand. According to Effigy (2013), FedEx is strong in the B2B segment of the market. As all international integrators, FexEx provides three main product lines: Freight, Ground and Express services. Although FedEx presence is very important worldwide, in Europe its relative market share in the international express category is 10% according to the annual report of Deutsche Post/ DHL 2014. However, the company is determined to increase its presence in the European Market. According to the Annual Report 2014 FedEx Express has opened 100 stations across 11 European countries since 2011.

For the time being TNT is implementing a multiannual business strategy (initially called "Deliver!" And later "Outlook") focusing mainly on improving profitability. According to this strategy TNT Express, the company should focus on the areas where it has a strong position and can demonstrate tangible growth, improve efficiency and optimise its administrative structure. Recently TNT and FedEx announced their intention to combine forces. With an announcement on 30/6/2015, FedEx has reportedly requested EU's approval for its 4,4bn Euro bid for TNT .. The case is currently under examination from the European Commission and the Merger Procedure Regulation.

According to WIK(2013) the failure of UPS and TNT Express merger in 2011 has seriously affected the market position of TNT express, who has been trying to recover ever since. The uncertainty caused about the future of the business environment, has led many customers to switch to DHL Express who say its revenues increased by 9.3% in 2013.

The International Europe segment comprises of all TNT operations in Europe with the exception of the domestic businesses in France, Italy and the United Kingdom. These operations provide TNT with a strong position in the European international express market. According to the Annual report of Deutsche Post/ DHL (2014) the market share in value attributed to TNT Express amounts to 12%.

TNT operates in B2B segment of the market offering services addressed also to the B2C sub segment as well offering day definite and time definite services.

TNT Express N.V., the Dutch express operator, formerly owned by the national postal provider (formerly known as TNT Post) is the third largest express delivery operator across Europe, operating in about 200 countries around the world. The split-up of TNT N.V. which was announced in December 2010, took place in May 2011 when TNT Express and PostNL were separately listed on the Amsterdam Stock Exchange.

Yamato Holdings is the main Japanese operator and a new global player. Its cross-border flows are mainly deferred services and operational between Asian countries, yet it already has presence in the EU. Their express deliveries are performed in agreement with UPS . According to the Statistica database it reaches a global market share of 4% in the total express and courier market in 2014.

Traditionally, as all international integrators, the company was serving the B2B segment of the market. As we already discussed, the company refocused their operations to better serve the B2C e-commerce driven segment of the market. According to Apex Insight (2015) in 2005 when it had established operations in most major markets, it extended its focus to include the larger domestic markets, through acquisitions (for example Lynx in the UK and Stolica in Poland). According to its annual report, UPS is expected to have more than 20,000 locations worldwide to facilitate their customers, who can opt to pick up or drop off their parcels at convenient retail locations. In Europe, the acquisition of Kiala S.A. (rebranded later as UPS Access Point) was intended to serve as a platform to enable e-commerce retailers to offer consumers the option of having goods delivered to a convenient retail location.

In the International package (CEP) segment the company offers both express (time definite) and deferred delivery services (day definite). According to UPS Annual Report (2014), several factors provide significant additional opportunities in Europe, including the highly fragmented nature of the market and the fact that exports make up a significant part of Europe’s GDP. The company believes that there is a strong potential for growth in small package exports in Germany, the U.K., France, Italy, Spain and the Netherlands. To accommodate this strong growth, the company will continue investing in its air hub in Cologne (to develop the capacity to to process 190,000 packages per hour).

According to its own annual report (2014) its international package segment represents 22% of the company’s total revenue globally. Europe, the second largest region globally is responsible for roughly half of the international revenues in the package (CEP) segment and it's the main driver for growth.

UPS, the American based provider, which links with its operations around 220 countries in the world, is, according to all estimates, the second largest express provider in the Time Definite Express segment in Europe, following DHL Express. According to Effigy (2013) it holds between 30-40% of the market share in value in 2013, according to Deutsche Post/ DHL Group annual report (2014) it holds 30% of market share.

In the European Express Market DHL is the most strong express alternative representing 40-50% of the market in value .

DHL Express brand is a division of Deutsche Post AG. The Group progressively acquired DHL as global air express service provider from 1998 to 2002 and expanded its presence in the express segment by purchasing other leading logistics companies, e.g. 1999 acquisition of Danzas, 2004/2005 acquisition of a majority stake of Indian express company Blue Dart (75% stake currently held), end of 2005 acquisition of Exel . DHL’s family of divisions offers an portfolio of logistics services ranging from national and international parcel delivery, international express, road, air and ocean transport to industrial supply chain management. With a presence in over 220 countries and territories worldwide, it provides solutions for markets and industries including ecommerce, technology, life sciences and healthcare, energy, automotive and retail. The main product offered by this stream in the CEP segment is International Time definite, Day Definite and Same Day delivery services (targeting mainly business customers). The company is also targeting SMEs by providing custom support and personal services. In 2015 the company published the following statistics:

As we described earlier, this term is meant to describe those delivery operators that are committed to provide time/ day definite (express) domestic and cross border end-to-end delivery services mainly through an owned (integrated) network (or a network where they maintain 100% of operational control) that use air freight based transportation systems as well as ground/ sea networks to fulfil international shipping.

Finally all national postal operators are active in the cross border segment of the market, most of them by establishing a collaborative model of cooperation for the fulfilment of the cross border delivery.

In the express segment of the cross border market there are 4 main players in a combined market share of more than 90% . Other operators who can be considered to offer services in this segment according to a report of Research and Markets (2015) are: Aramex, BTA Transport, Burns Express, Cargo Express Delivery, DPEX Europe, Express Transport, GeoPost (DPD), GLS, Hermes Group, Interlink Express, Manston Express, Transport SDA Express, Simpex Express and Tuffnells Parcels Express. According to AT Kearney, network players (FedEx, TNT Express, UPS and DHL Express) appear to have a have a combined market share of 52% in the international standard (deferred) segment.

In this section, we will present the most important operators that we identify in the cross border CEP market and we will briefly present some basic figures on their relative importance in the European CEP total market.

Within this sub-segment we can also identify the standard product/ customer segmentation that applies to the overall CEP market i.e. B2B, B2C, C2X, and standard vs. deferred and express product categories (for definitions see section 4 above).

According to CE (2012) cross border deliveries account for up to 15% of total volumes, 80% of which refer to shipments within the EU. WIK(2013) stipulate cross border shipments account for 30% of total revenues and approximately 10 % of volumes in Europe.

Of course, not all operators are equally competing with each other in all segments of the market (as identified in section 3 of this Annex). The higher the degree of segmentation the more different the mapping and the market shares one can identify in each country. However the level of analysis of this Annex does not require additional level of detail on the competitive landscape that has been developing during the recent years.

According to Apex Inside, the Competitive landscape of the EU CEP parcels market can be summarized to the following:

WIK(2014) report that K-EX is an independent delivery operator providing national mainly delivery services mainly targeting in the express and day definite segment of the market.

As previously described, the company, part of Integer.pl Group, had predominately provided parcel collections via its self-service locker terminals. On the 1/6/2015 it announced that the launching of courier services to deliver parcels either to the door or to parcel lockers across Poland. Services include guaranteed next day delivery before 12pm and 5pm, tracking and a free returns option. InPost claims that its new offerings are particularly suitable for e-commerce retailers, with major Polish e-commerce platform Allegro already on board. InPost said it will be making use of its 8,300 customer service points throughout the country, including 1,300 parcel locker terminals, and 10,000 couriers in providing nationwide courier services. According to corporate information the company's parcel lockers handled in 2014 90% more volume than the year before.

Poczta Polska S.A. is the National Postal Operator in the country. Its primary concern is the provision of postal (letter and parcel) services as well as the provision of domestic courier and EMS international courier services through Pocztex. According to the corporate information published in the Annual Report there has been a 12% increase in sales of parcels and courier shipments serviced by the Poczta Polska S.A., despite slower than expected market growth and greater price pressure from competitors which lowered profit margins. The highest increases were achieved in the case of Pocztex courier shipments (volume growth of 60%). According to the latest annual report the company delivered over 44 million parcels and courier shipments in 2014.

Poland perhaps is the most interesting country example of the Eastern European countries. Given the size of the country and its nature of economy has managed to be considered among the top seven in size among the European total. Effigy (2013) estimates it to be about 4% in volume (but 2% in value) of the European total. However, the country shows impressive growth rates and growth potentials. The rates presented in Effigy (2013) show a domestic increase of about 8% and an international increase of more than 12%. Those growth potentials are reflected in the report of Ecommerce Europe which indicates Poland as one of the top five emerging ecommerce countries with a total e-commerce related turnover of 5.2 billion Euros in 2013., showing (according to Posta Polczta Annual Report) growth rates of more than 20%. According to a local delivery operator (Inpost), the e-commerce industry in Poland generates about 155m shipments a year, for around PLN 4.4bn (€ 1.06bn) a year in revenue for shipping firms .

All main operators with pan European presence are established in the Belgian Market (namely UPS, DHL, GLS, FedEX and TNT). However we will present their business model and their basic business information in a separate section that follows.

As explained in the previous section, PostNL through its section PostNL Benelux provides directly parcel delivery services in the Belgium territory using its own private distribution network.

To accommodate the needs of ecommerce users, since November 2014 Bpost launched Saturday parcels’ delivery, delivery to parcels lockers, online parcel preparation (labelling, payment) and direct drop-off and pick-up in one of its 1,250 parcel points, hoping to improve the delivery experience for its users. As regards the international activities Bpost has integrated its different operations into one combined structure hoping to better serve the parcels’ distribution needs of the global e-commerce marketplace. The new organisation operates under the brand name “Landmark Global, a Bpost company”.

BPost, the Belgian national postal operator is a strong player in the national CEP market. Regarding its share in the CEP market and according to the annual report of 2014, parcels grew by EUR 57.6 million in 2014, to EUR 307.2 million, changes mainly driven by the performance of its international parcels, due to the increase in parcels volumes generated from the universal and the parcels activities from exporting ecommerce activity. In terms of volumes BPost reported that there is an identifiable and solid domestic parcels volumes growth of 7.0%, which was mainly attributable to increased volumes in B2C as a consequence of the further development of e-retailing activities.

According to Apex (2015) the Belgian CEP market completes the list of the most important European country segments since it concentrates that altogether are responsible for 75% of the European total parcel volumes and 79% of the total European parcel revenues. According to ecommerce Europe Belgian e-commerce has been rising steadily these past few years. In 2014, there were 6.0 million e-shoppers in Belgium. On average they each spent about €722 online that year, which amounts to a total B2C e-commerce turnover of €4.3bn. This represents an increase of 14.3% in comparison with 2013. Apex Insoght (2015) forecasts a compound average annual growth rate of 3,5% for the Belgian Parcels market until 2019.

All main operators with pan European presence are established in the Dutch Market (namely UPS, DHL, GLS, FedEX DPD and TNT). However we will present their business model and their basic business information in a separate section that follows.

TNT Express N.V., the Dutch express operator, formerly owned by the national operator (formerly known as TNT Post) is the third largest express delivery operator across Europe, operating in about 200 countries around the world. The split-up of TNT N.V. which was announced in December 2010, took place in May 2011 when TNT Express and PostNL were separately listed on the Amsterdam Stock Exchange. Due to the international nature of TNT Express operations, it will be analysed in the next section of this presentation.

Post NL is the National Postal Operator in the Netherlands. The PostNL Group operates mail and parcel networks also in other countries namely in the UK (Whistl), Germany (PostCon), Italy (Nexive) and also cross border (Spring Global Mail). According to corporate information published in the Annual Report of 2014, the PostNL delivered in the Netherlands only over 142 million parcels fact that contributed with over 854 million Euros turnover to the company's bottom line. The company invested in early morning pick-up points, in evening and Sunday delivery, and in launching ‘before 10am’ and ‘before noon’ delivery options for their business customers. As explained in the county's assessment, also for PostNL E-commerce volumes continued to grow strongly in 2014, expanding by around 10 percent. According to the Annual Report fo 2014, B2C parcels volume growth was slightly lower, at between 6 percent and 8 percent, due to a decline in non-e-commerce volumes, digitisation and bundling of shipments. In this changing market environment, PostNL managed to maintain its market share in the B2C market, and grew its B2B market share. In recent press release the company announced a 7,1% increase in their parcels volumes, confirming the positive outlook for year 2015 .

According to Effigy (2013) the Dutch delivery market, independently or the relatively small size of the country's population, is among the 6 biggest in Europe both in volume and in value, accounting for 4% and 5% of the European total respectively. Both segments of the market (domestic and international) are experiencing a moderate growth, although the increase in the international CEP market is more intense, reaching levels of 5% in 2013. Contrary to the situation of Italy and Spain, the B2C segment in the country is more developed (accounting for a total of 37% vs. 63% compared to the B2B segment) illustrating the impact that the developed e-commerce activity exercises in the structure of the sector in the country. According to E-Commerce Europe the Netherlands is the 5th more mature market in Europe, even in absolute terms, with an estimated total market for 10, 5 billion Euros. According to Apex insight (2015) the Dutch market is expected to experience a moderate growth of 2.5% in the coming years.

All main operators with pan European presence are established in the Italian Market (namely UPS, DHL, GLS, FedEX, TNT and Hermes). In particular TNT has a strong presence in Italy as, according to Apex Insight (2015) it is one of the company's largest markets for express parcels. However we will present the operator's business model and their basic business information in a separate section that follows.

Bartolini, or BRT SpA, is the Italian express provider, offering CEP services within and outside the country. After its initial expansion that included several European markets it currently serves 25 countries, and implements a strategic partnership together with DPD and EuroExpress Courier services . According to corporate information, it delivers more than 80 million parcels per year, domestically and internationally.

Nexive, the Italian private delivery operator, owned by Post NL, covering 80% of households in the country, is also active in the CEP e-commerce delivery market. According to the company figures Nexive distributed in 2014 more than 750.000 parcels in the country ..

Posta Italiane's Subsidiary, SDA Express Courier SpA, contributed positively in the group's results as it grew (according to the Annual Report of 2014) both in revenues and in volumes by 12.8% and 6.1%, respectively, compared with 2013 (deliveries increased by 6.9 million, and revenue by €22.8 million). Those improvements reflect the positive developments in the B2C segment and e-commerce. The international Express Delivery segment also performed well (volumes increased by 2.4 million, and revenue by €7.9 million), benefitting from the partnership agreements with UPS and Network Eurodis.

The Italian government has recently announced that about a stake of about 38% would be offered for sale which could raise up to €3.8bn euros, excluding fees and other costs .

Poste Italiane, in fact, only uses SDA Express Courier (through Consorzio Logistica Pacchi ScpA) for the distribution of all domestic and international Paccocelere, and Paccocelere J+3 products.

Poste Italiane is the country's national postal operator that holds a non-negligible position in the express delivery and parcels segment of the national market. The business relating to express delivery products to retail and SME customers is offered by Poste Italiane SpA and the segment targeting business customers is offered by its subsidiary SDA Express Courier SpA. The provision of standard parcel services falls under the Universal Service obligation (USO).

According to Effigy (2013) the Italian CEP market accounts for 7% in terms of value and 5% in terms of volume of the European Total. The Italian market, always according to the same study, presents a marginal growth in both the domestic and international segment, of a level of below 2%. The B2B segment is considerably bigger in absolute and relative terms (in relation to other European countries) compared to the B2C segment with the first representing nearly 90% of the market.

All main operators with pan European presence are established in the Spanish Market (namely UPS, DHL, GLS, FedEX, SEUR (DPD) and TNT). However we will present their business model and their basic business information in a separate section that follows.

Unipost is the private mail operator providing mainly direct letter mail services within Spain and across Spanish borders. However, according to WIK (2013), due to the growing importance of the CEP parcels market in Spain and given the network that the company had already established in the country, the Unipost has lately invested in the parcels segment as well, mainly in the small package segment.

REDUR is an operator specialised in e-commerce B2C, B2B, and C2C with headquarters in Spain and deliveries in Portugal and Andorra with its own logistics network.

TIPSA uses a franchised network to transport and deliver parcels across all regions of Spain, including destinations in Portugal and Andorra. Apex insight reports that it generated revenues if 215million Euros in 2013.

MRW is a parcel delivery network that works through franchising. Apart from Spain it maintains operations in Portugal and Andorra and Gibraltar. Apex Insight (2015) reports that it delivers around 50 m parcels per year, and it estimates that it produces revenues of about 140m.

Correos Express is the subsidiary of Correos dedicated to advanced express delivery mainly in the Iberian Peninsula, offering time and day definite delivery services. It is responsible for the delivery of the ‘Paq 14’ and ‘Paq 24’ products described above.

According to the group's Annual Report (2014) the economic recovery in 2014, the growth of’ international activity and the growth in e-commerce reversed the declining trend in the parcel market.at least in terms of volumes. The development of new business models such as private shopping clubs, the launching of online shops by major Spanish companies or public support for the development of the sector, have all contributed to this recent growth. The response of Correos Group in this growth came in 2014, when it branded its parcel service under the name Paq, with five products aimed at responding to customers’ needs in terms of speed and flexibility: ‘Paq 48’ and ‘Paq 72’ provided by Correos, and ‘Paq 10’, ‘Paq 14’ and ‘Paq 24’, supplied by Correos Express. Chronoexpress offers international services, mainly through agreements with other express operators .

According to Effigy (2013) the Spanish CEP market represents about 5% of the total European total in volume and 8% in value, after France. Although the country presents a non-negligible decline in its domestic CEP market (of about 3%), the Spanish market still grows internationally (about 2%). According to the same study the B2B segment is exceptionally big compared to the B2C segment (91% vs. 9% respectively). As in all big markets, we also observe most of the important delivery providers present in the market, offering domestic and cross border delivery services. E-commerce Europe identifies Spain as one of the main emerging ecommerce markets (with a total turnover attributed to ecommerce of 15 bn Euros in 2014. According to Correos Grupo Annual Report (2014) e-commerce market in Spain represents an 18% annual increase in 2015.

All main operators with pan European presence are established in the French Market (namely UPS, DHL, GLS, FedEX and TNT). However we will present their business model and their basic business information in a separate section that follows.

A CEP operator targeting the B2C (ecommerce driven) segment, has reportedly delivered in 2015 over 35 million parcels offering flexible delivery solutions and innovative product offer. Established in 1993, the company now comprises of 2 independent national platforms and 18 regional agencies covering the territory of France . It offers express 24 h and 48 h delivery services using, according to Apex Insight, 1700 subcontracted couriers and a network of lockers. According to Apex Insight and to recent publications in the economic press in 2014 Amazon acquired 25% of Colis Prive.

Heppner Transport, a company specialised in logistics, operates as well in the CEP market targeting mainly the B2B segment, in France and internationally, by offering transit times 24-48h throughout France and 24-72 hr internationally. According to Apex insight (2015) the company has one of the biggest networks in France.

Mory Global is an independent company providing a range of transport, logistics and CEP services through a network of 49 branches in France. In 2015 the company published the following information :

SNCF Geodis is a French logistics operator, owned by SNCF rail operator delivering parcels in the CEP Market, with a focus on the B2B segment. According to Apex Insight (2015) it holds third place among the parcel delivery companies present in the country. It is an important logistics provider in France and it is ranked among the 4 most important ones in the rest of Europe . It has a direct presence in 67 countries and covers indirectly 160 countries .

Geopost Operations as regards the international segment of the market will be covered analytically in the sections that follow

Pickup, experts in PickUp and DropOff delivery: The PickUp and DropOff network in France expanded significantly in 2013, with parcel traffic up between 80 and 100% compared with 2012, and new e-commerce players, who wanted to enable their customers to benefit from this service

Exapaq, focuses on express service. Exapaq was founded by 19 independent French freight and express delivery companies in 1995 and was acquired by GeoPost in 2006; the company delivers parcels primarily to the BtoB segment. Exapaq delivered 55 million parcels on behalf of over 100,000 business and private individuals in 2013.

Chronopost International, focuses on premium express services, for parcels both in the BtoB and BtoC segments. Chronopost is the only express service provider offering coverage throughout metropolitan France for next day home delivery before 1:00 p.m. Chronopost delivered 102 million parcels in 2013. International express delivery accounted for 25% of its revenue. The share of BtoC deliveries represented 33% of its flows. It includes the Chrono Relais service.

GeoPost implements a combined model: it is primarily positioned on the BtoB express market, but is also expanding on the BtoC segment, to profit from its rapid growth. GeoPost generated revenue of €4.5 billion in 2013; 26% of its revenue is generated in France and 74% outside France. International (incoming or outgoing) parcels account for roughly 20% of GeoPost’s revenue. GeoPost delivered 814 million parcels in 2013, an increase of 12% compared to 2012.

Coliposte specialises in delivering parcels within 48 hours to private individuals (BtoC and CtoC segments) in France (domestic), with home delivery services six days a week. It reportedly delivered over 277 million parcels in 2013.

La Poste is a public limited company responsible for the provision of the Universal Service Obligation in France. Operating since 1984 it was the first (incumbent) postal operator to enter the express market . Currently it operates in the Parcels and Express Markets through the following divisions: ColiPoste, (its Parcels division) and through GeoPost’s Exapaq, Chronopost and Pickup subsidiaries (in the express and pick-up point markets respectively). In the international market the company is present through GeoPost (branded as DPD in most of the cases), a fully-owned subsidiary that operates all parcel and express subsidiaries in Europe and worldwide. Geopost/ DPD division will be covered separately in the sections that follow. The parcels and express segment accounts for about 26% of the groups' revenue and according to the Group's annual Report, the group has collectively handled about 1 billion items in 2014 . The results that were published in 2015 claim that the increased revenue generated by the activities in the CEP market offset partially the decline in the Group's profits that were mainly caused by the decline in the letter mail volumes.

According to Effigy (2013) the delivery market in France accounts for 14% in terms of value and 12% in terms of volumes in the European total. According to the same study the CEP market in France grows more internationally than domestically in terms of revenue, however, as in most of the Western Member States, the market has grown in volume in both segments. As in all large CEP markets, all integrators (DHL, FedEx, TNT, UPS) as well as GLS are established in the country and compete with domestic couriers to deliver parcel and express services from, to and within the country in order to profit from its size and growth potentials. The French ecommerce market is the second largest market in Europe, and was expected to grow to 54bn Euros, according to the forecasts of ecommerce Europe of 2013. More recent data show that E-Commerce in France grew by 11% to spending of €57bn in 2014 and is predicted to break through the €60bn barrier in 2015, according to new figures from the country’s e-Commerce association Fevad .

All main operators with pan European presence are established in the UK Market (namely UPS, DHL, DPD, Fedex, Hermes and TNT). However we will present the different operator's business model and their basic business information in a separate section that follows.

Amazon, the online retailer, currently delivering their parcels in the UK through the networks of Royal Mail, Yodel and Whistl has recently implemented an own-delivery strategy. According to the Financial Times Amazon is believed to have already absorbed 3 % of the UK parcel delivery market, accounting for about 70m parcels annually. According to the 2014 Annual Report of Royal Mail, the growth of e-commerce related delivery market will largely depend on the extent of Amazon's rolling-out of the own-delivery network and its commercial success. The company recently announced a Same day Delivery service (under the brand "Pass my Parcel") utilising a network of delivery locations, using Connect Group (a newspaper distributor). It has recently announced an innovative one-hour delivery service, however available for free only for customers under subscription, and only in a specific postal codes in London Metropolitan area for the moment. Financial Press, published information of the company's intention to take stake in Yodel's capital through an option which offered a considerable discount form Yodel's market value .

Whistl, is former TNT post UK, is a fully owned subsidiary of PostNL, former TNT Group. In 2011, the group split to form TNT Express and PostNL . TNT Post UK became a subsidiary of PostNL, and was rebranded as Whistl in September 2014. They reportedly handle 60m parcels each year .

UK Mail, one of the competitors of Royal Mail in the traditional letter mail segment, is currently active in four segments: Mail, Parcel, Courier and freight. On the parcel segment, they focus equally on the B2B, B2C segment . The company, originally called Business Post, was founded during a postal strike in 1971.

Hermes as explained above, owned by a DE-based distance selling company (Otto Group), operates in the UK primarily in the B2C segment (e-commerce focused). In 2012 it reportedly handled 165m parcels . As from 2012 the company improved their network capacity (expanding its network of Parcel Shops form 2000 to 3000, including additional hubs) in order to accommodate the increase in volumes and facilitate the consumer needs. Hermes secured a four-year contract extension with the fashion retailer Next in one of the biggest ever home delivery deals in the UK.

City Link, a private equity parcel company that has been in the competitive landscape of the UK market since 1969, with the parcels contributing about 60% of its profits and 40% of its revenues was declared bankruptcy on Christmas Day, 2014. The company was at the time going through a period of change, trying to overcome administrative problems initially motivated by the IT incompatibility following the merger with Target Express in 2007. Although the sector and the company experienced a volume growth , they could not cope with the extra costs of dealing with the Christmas deliveries, so the equity holders decided to put the company into administration. A part of their market share was absorbed by Royal Mail Group .

Yodel's recent joint venture with Paypoint, Collect+ is a parcel collection, delivery and returns service which is available from 5,800 stores in the UK. The number of Collect+ parcel transactions has risen from 7.7 million in 2012/13 to 13.6 million in 2013/14 to 18.8 million in 2014/15.

Yodel is a delivery operator targeting businesses and individuals sending parcels to the UK, Ireland or internationally (Europe and abroad) that weigh up to 25 kg. Similar to GLS, it also operates in the deferred (standard) parcel segment, i.e. international delivery times 3-5 days, times not being guaranteed, and with optional insurance coverage. Yodel was launched in 2010, following the merger of Home Delivery Network Ltd and the domestic B2B and B2C businesses of DHL UK. However, Yodel has been focusing their efforts to integrate the two networks formerly distinct networks. Its £535m annual revenue is split currently into 30% B2B and 70% B2C . It currently cooperates with some of the UK's large retailers (including Amazon, Argos, Boots and Tesco Direct).

Royal Mail plc is UK's national postal operator. Royal Mail, when handling parcels, utilises a composite business model: Royal Mail's core network (UKPIL), ParcelForce Worldwide (a dedicated parcel division) and GLS (RM's subsidiary, which we will cover separately). According to Royal Mail's Annual Report, in 2014, the parcels handled by Royal Mail's network exceed in number 1 billion items (991m handled by the core network and 77m through Parcelforce). This is equal to a 14% share of the total CEP market in Europe, in terms of volumes. In the domestic market, Royal Mail (together with Parcelforce) holds a 52% share (in terms of volume) and 38 % in terms of value . Although total volumes continue to experience a steady growth, revenues from parcels are flat (grew by only 1%) reflecting, according to Royal Mail analysis, a change of mix (towards B2C vs. B2B) and pricing (volumetric based pricing vs. weight based pricing). Out of the 77m parcels handled by ParcelForce, almost 7m ( a rough 10%) cover the international segment. In Europe Royal Mail is present using the brand name GLS. GLS will be covered separately in the sections that follow.

The UK's e-retail market is one of the largest in the world. It is said to account for 13% of all retail sales fulfilled online and is expected to grow by a further 16% by 2019 . Although the UK's e-commerce market is thriving, resulting in tangible growth rates in volumes, we observe a competitive pressure that is transforming the landscape of the delivery business in the country. As we will explain below, some companies have had to transform their operations to meet consumer needs in view of the increasing competition. This pressure is also reflected in some recent e-retailers decisions with respect to the administration of their online retail streams . According to Apex Insight (2015) the UK parcel delivery market is expected to continue to grow in the next 5 years, to exceed 13bn by 2019.

According to PWC , in 2012 the UK total (inland) parcel market amounted to about 1.7 billion items. Effigy (2013) estimates that the UK market is about 14% in terms of turnover of the total EU market. According to Effigy (2013) UK's international parcel growth reaches a growth rate of 10% compared to a 5% of domestic growth. B2C and C2C segments represent two thirds of the total CEP market in the UK and these segments are expected to grow at approximately 4.5-5.5% in the medium run . All large European parcel operators have a presence in the UK market in order to profit from its size and growth potential. In this market we also observe a series of interesting developments in relation to delivery (notably the decision of Amazon to pilot its own delivery network).

All operators with pan European presence are established in the German Market (namely UPS, GLS, DPD, FedEX and TNT). However we will present their business model and their basic business information in a separate section that follows.

Hermes Logistik Gruppe (HLG) specializes in the B2C segment of the market offering CEP services in Germany and outside. Due to the fact that the company offers cross national delivery services, we will present it in the section that follows. On the domestic German market however, Hermes Germany has very recently bought a 28.5% stake in start-up Liefer Factory GmbH, which offers same-day and time definite delivery through its Liefery service. The objective was, to expand its portfolio with a same-day delivery option for e-retailers and other shippers. The company's network comprises around 50 metropolitan areas in Germany where more than 2,500 couriers deliver shipments to recipients. Hermes intention is to focus on offering the “Same Day Service powered by Liefery” increasingly to business shippers and online retailers. By the end of 2015, Liefery aims to cover 100 German towns and cities. .

The other domestic parcel business in Europe performed equally well, according to the 2014 Annual Report of Deutsche post. The worldwide e-commerce activities continue to expand. Revenue increased in 2013 year, mainly due to the growth identified outside Europe.

Worldwide online retailing continues to have a positive impact on the company's parcel business. In 2013 revenue in the ecommerce - parcel business unit was €5,6 billion, presenting an increase of 6.5 % compared to the previous year. The volume in the German parcel business rose in 2014, by 7.0 %. Revenue exceeded the 2013 figure by an even wider margin due to changes in the product mix.

Through their Express division the company offers time-definite courier and express services to business and private customers in more than 220 countries. In the domestic parcel market, Deutsche Post/ DHL holds around 43% of market share in the domestic market (in terms of value). In the European International Express Market DHL Express holds a 41% of market share. The Cross border Markets will be covered in the next sections.

Deutsche Post AG is a listed corporation headquartered in Bonn. The company is the provider of the Universal Service Obligation in Germany. In the CEP Market they operate through their Post – eCommerce - Parcel division inside and outside Germany. Outside the country, in particular, the company offers domestic parcel services in other markets and is constantly expanding their portfolio of cross-border parcel and goods shipping services. The main offer with respect to the ecommerce - Parcel segment, as described in Deutsche Post Annual Report, is concentrated on the following product categories: domestic parcel services, cross-border shipment of goods, fulfilment services and special services.

Germany is the largest CEP market in Europe. The volumes generated in the country account for 28% of the European total according to WIK (2013). AT Kearney estimates the figure to be 23% and Effigy (2013) calculates the total at 26% in volume and at 36% in value. According to the same study the market is still growing in value at a rate of around 5% internationally and 4% domestically. According to Deutsche Post Annual Report (2013) the German parcel market increased by nearly 5,1 % compared to the prior year and was estimated to be more than 8 billion Euros. According to Apex insight (2015) the size of the DE market is reflecting its extensive manufacturing base and advanced logistics infrastructure. As in most of the large CEP markets, also for Germany, e-commerce was an important driver of growth, although the size of the market is also linked to the characteristics of the country's economy in general. The volume in the German parcel business rose sharply in 2014, according to the 2014 Annual Report of Deutsche post surpassing the prior-year figure by 7.0%. According to Apex Insight (2015) the German market has a positive outlook with a compound annual growth rate of 2.9% from 2015 to 2019.

The international integrators (namely DHL, UPS, TNT Express, FedEx) as well as the main pan-European operators (namely GLS, DPD and Hermes) have been established in nearly all 8 countries of reference. For the purposes of this analysis, however, and since those operators base their business model in offering CEP and logistics services across European and non-European countries, we will analytically present them in section 8 below.

In this section we will present the 8 largest CEP markets in Europe. According to E-Commerce Europe the UK, Germany and France, account for 61% of the total ecommerce sales in Europe. At the same time the Netherlands, Austria, Spain Italy and Poland are also identified as big (or emerging) e-commerce markets. According to Effigy (2013) Germany, the UK, France, Italy and the Netherlands are responsible for about 75% of the EU total CEP market.

In order for national postal operators to organise their international strategies they have the opportunity to conclude (apart from the bilateral agreements briefly described above) international agreements. One opportunity is the e-Parcel Group (EPG), a cooperation of 29 European NPOs plus USPS (the USA counterpart). Another possibility is to directly use the framework of the UPU agreement (which is particularly the case for the cross border services outside the territory of the EU).

Following the failed merger ot TNT with UPS, FedEx has requested EU's approval for its 4,4bn € bid for TNT . FedEx has made strategic investments to strengthen their position in the European market. WIK (2013) report that FedEX has acquired in Tatex-FR and Opek –PL, to build up its own facilities and slightly repositioned its brand image to cover the deferred B2B segment of the market (in response to the changing market needs).

In March 2012 UPS and TNT announced their intention to establish a global express and logistics company . The Commission expressed serious doubts as to its compatibility with the internal market. The European Commission finally decided to block the 5.4bn merger on the grounds that it would seriously affect competition in the express small package segment of the markets within the EEA and 15 MS .

DPD pursues a growth strategy, according to WIK (2013), by planning a gradual expansion of access points with a focus on emerging parcel markets. DPD Poland took over courier company Siódemka and this acquisition brought DPD to be the leading provider in the country. DPD UK started building Europe’s largest parcel hub in Leicestershire. GeoPost took control of the British logistics provider WinDirect, which allows it to develop its position in the international market with dedicated solutions for e-retailers .

Following a similar strategy with UPS, GLS collaborated with Mondial Relay in order to improve their delivery quotes and the delivery experience for the final consumers. Mondial Relay points are on average a 12 minute drive away of all households in France; therefore they offer a wide and valuable B2C network coverage, facilitating the expansion of GLS in their domestic market . Modial relay offers an easy delivery alternative in case of failure of first delivery attempt, reducing delivery costs and increasing efficiency for GLS offering a network of 4300 points collect in 2013. Mondial Relay has collection points also in Belgium. DHL, in order to facilitate their expansion strategy in France, has also concluded in a partnership agreement with Mondial Relay in the end of 2013 .

According to WIK(2013) DPD and GLS, the subsidiaries of La Poste and Royal Mail respectively, offering cross border services through a ground based logistics network, implement a strategy of establishing partnerships with companies already organised at the local level, to be able to utilize a delivery network in the countries wishing to operate in.

In an effort to transform operations to meet the needs of the B2C consumer segment, an reposition it brand image from a primarily B2B express logistics provider to a parcel (cross border) business, UPS has acquired Kiala in 2012 – a technological platform that allows customers to choose a convenient retail store as delivery location. The Kiala network is comprised of more than 7,000 “Kiala Points” that handle up to 145,000 parcels per day, with more than 300 retail companies, including H&M, Esprit, and BrandAlley, among others, using its services . Kiala was active in 5 European countries (BE, FR, ES, LU, NL). UPS is now combining Kiala points with its own network and rebranding all outlets as UPS access points.

The B2C segment of the market, and especially the cross border one, is difficult and costly to serve as it usually demands big network investments that handle low volume shipments (per delivery) in the final mile. Operators respond to the need for network optimisation for capacity on parcel business (and notably in the cross border sector) either by concluding with strategic alliances with affiliate operators, by announcing mergers and acquisitions, or by creating new delivery networks in Europe. Examples of these are provided below.

An interesting marketing development is the newly established business model that promises to deliver cross border shipments who travellers willing to transport something to the country of their destination. Collaborative shipping is a newly developed concept that follows the logic of crowdsourcing the impact of which in the structure of the market needs to be further analysied in the future .

According to IPC Flash Report, DPD will launch a UK parcel shop network with up to 2,500 locations under the PickUp brand in June 2015 to step up its expansion in the fast-growing B2C market, highlighting the companiy's corporate strategy to expand in the Pick Up and drop-off business model that already includes 7,000 outlets in France, 5,000 in Germany and nearly 2,000 in other countries.

According to the Annual Report of LaPost (2014) in January 2014, GeoPost signed an agreement with Neopost ID to set up and operate an automatic and secure consigned delivery network for delivering and returning parcels in France. An initial rollout of 1,500 consignment points has been scheduled up for 2016, followed by the installation of 3,000 consignment points over the longer term. The agreement provides for setting up a joint venture, Packcity France, which will be jointly owned by GeoPost and Neopost, while the consignment points will be operated under the Packcity brand.

lnPost: 650 parcel locker stations in Poland. 400 parcel locker stations in Russia. 200 parcel locker stations in the Ukraine. 100 parcel locker stations in in the Czech Republic and Slovakia. 170 parcel locker stations in Ireland (in cooperation with Nightline). Plan to install 2,000 parcel locker stations in the UK by the end of 2013.

According to WIK (2013) apart from delivery operators parcel lockers are also being rolled out by several retailers (the most prominent of which being Amazon).

‘Homepaq’ is a new service rolled put by Correos Group in Spain that aims to provide more convenient parcel delivery services by providing free installation of an automated terminal in resident communities, for sending and receiving packages 24 hours a day, seven days a week. In 2015, Correos intends to install the first ‘Citypaq’ boxes (similar to ‘Homepaq’ boxes but with a greater capacity) in underground and train stations, transport interchanges and other highly frequented public places facilitating the collection of packages.

InPost parcel lockers are currently the biggest network in the world enabling its clients to send and collect parcels 24/7. So far, over 3 500 parcel lockers have been launched in Poland and on global markets .

Doddle is a new parcel service with stores based in railway stations and major hubs across Britain. Currently there are 32 train station locations and the number is still growing .

A company called SmartPOST runs a network of self-service parcel terminals in Finland and Estonia. The terminals are located in shopping centres and other public premises. They enable clients to send and receive parcels and pay for them at the collection point.

The Austrian Postal Service introduced a virtually identical service called Post.24-Station in November 2006. In Vienna, Stations have been installed in supermarkets, petrol stations, and post offices that can easily be reached by public transport. WIK (2013) report that in 2010 there were 24 parcel stations in Vienna.

This network established by Deutsche post/ DHL provides automated booths for self-service collection of parcels and oversize letters as well as self-service dispatch of parcels 24 hours a day, seven days a week. Packstation started as a pilot project in 2001 and was quickly expanded. By November 2011 there were 2500 Packstation machines in Germany .

In an effort to improve delivery experience and provide more convenient solutions to consumer and reduce the instances of unsuccessful delivery, operators elaborated on the concept of alternative delivery streams. In most of the cases operators invest in building delivery networks in their domestic territory although several of them have been expanding in other countries.

In response to the requirements of the EC Green paper “An integrated parcel delivery market for the growth of e-commerce in the EU”, and also in an attempt to accelerate the development of new services and solutions for cross-border delivery in the context of e-commerce, NPOs (within the collaborative platform of IPC and with Post Europe ), have developed a set of lightweight parcel products and improved delivery services addressing the cross border segment of the market. This project is currently work-in-progress and will be covered separately in this Impact Assessment.

Royal Mail has launched a free-of-charge mail and SMS delivery notification services to help online retailers keep their shoppers updated on the delivery of their goods to contract customers or on items delivered via tracked services .

With this service DPD is able to provide parcel recipients with a one hour delivery window, notified by SMS and email. It also includes a re-routing option en-route. if the customer prefers to receive the consignment in an alternative delivery date, if they opt for delivery to a nominated neighbour, if they prefer to have the parcel left in a specified place or even collect the parcel from a local DPD Pick up Shop.

In 2013 UPS launched the innovative service “My choice” enabling users to stay up to date with proactive Delivery Alerts (text, email, and voice) and to know when parcels will arrive, and in most instances, providing an estimated delivery time. “MyChoice” offers apart from delivery real time information the possibility to reroute the shipment to a new destination or to a UPS delivery point.

In the paragraphs below we will be presenting very briefly some illustrative examples of the trends mentioned above:

A trend towards optimising network operations (through mergers and strategic alliances) on the cross border deferred segment in particular, with an aim to cut down costs.

The creation of innovative services and targeted marketing strategies to meet the needs of the B2C segment, especially with respect to the delivery (and return) experience.

Operators are designing new delivery services and creating innovative strategies to cover the B2C market segment with an aim to improve the delivery experience for the final individual consumers. Two general trends illustrate this trend:

Against this background of continuous ecommerce growth, operators are trying to respond to the changes in the market conditions and in consumer preferences. Total internet retailing nas now reached 400bn in value, showing growth rates of 15% , which create in turn a growing demand for delivery services. According to Ecommerce Europe's statistics, the value of e-commerce in Europe in 2015 accounts for 430bn Euros in Europe and is translated to over 4 billion parcel items annually .

Effigy (2013) reports that the domestic CEP market has been growing faster in volume (+4.5%) than in value (+3.1%). This is mostly due to the B2C development with a lower profit margin. This effect is even stronger on the International Intra EU segment with a volume growth of +7.2% versus a value growth of 4.6% due to expanding cross-border e-commerce activities (that produce standard/ deferred type of shipments).

Network operators (integrators) have developed their offer of international low(er) value services to reach a combined market share of 52%, as previously stated. BCG (2012) considers that a traditional postal operator business might be better placed to service this "new" low-value B2B segment of the market, due to its network structure and existing product offer.

The same study shows that the low value B2B segment holds a share of 55% within the total B2B segment. That means that part of the B2B market, traditionally served by the high-value express operations, could instead be served by a slower and lower value but equally reliable delivery service.

According to the same analysis, the B2C segment of the market is 25% of the total CEP value [but 56% in terms of volume according to CE (2012)], leaving the remaining 75% of total value to the (still growing) B2B segment (which is less than 30% of the total in terms of volume according to CE (2012 ) a segment that still shows growth however at a slower pace (of 4% of annual growth).

BCG (2012) in their study confirm that the cross border, B2C standard (low cost) part of the market is increasing, being the focus of the strategy of many national postal operators and also alternative delivery operators. As a result, the projected growth in the total value of parcel delivery business attributed to ecommerce only is 7% at a compound average rate, and is estimated to grow until 2020, with the same pace. It is also highlighted that the revenue from relatively higher weight parcels (above 2 kg) is expected to grow in the expense of the revenue generated form parcels below 2kg. WIK (2013) quoting GeoPost related research also states that the B2C segment is expected to grow at higher rates than the B2B segments (6-8% vs. 2% respectively) estimating that by 2020 30% of total B2C parcel trips will be across the borders.

In addition, according to the same study, most European countries are experiencing stronger growth in the non-express segment of the market than in the express one (in particular in the domestic segment but also cross border). Cross border B2C shipments are expected to grow by an average of 12% per year (although in 2011 they accounted for only about 10% of the total CEP market in terms of volumes). Network players (FedEx, TNT Express, DHL, UPS) have managed in view of this evolution to rise their combined market share in the international standard (deferred) segment to 52%.

According to AT Kearney the cross border segment showed growth figures higher than the domestic CEP one (8% in volume and 6% in revenue vs. 6% in volume and 3% in revenue) between 2009 and 2011. In addition, emerging markets (like the Polish market) show bigger growth rates and growth potentials compared to the more mature CEP ones (UK/ DE/ FR) both domestically as well as internationally.

According to CE (2012) 60% of all B2C volumes (and about 2bn items in 2011 ) are related to Ecommerce, a percentage that increases to 68% when we zoom in on the best ecommerce performing countries, i.e. Denmark, Finland, France, Sweden, UK, Germany, and the Netherlands.

An increase in the demand for lower value (standard and/ or deferred) and an equivalent shift of the focus from the express segment of the market equally for the B2B and for the B2C segment.

There are three main observable trends that most analysts highlight in their recent studies on the European CEP (as well as global) markets:

There is nothing more constant than change and this particularly true for the global CEP markets. In the last years European delivery operators have experienced a constant pressure to transform their operations, to meet the changing consumer needs, to better respond to the pressure for efficiency and technological improvements, and of course to adapt in the global economic and commercial context. In this environment a key role has been playing the take up of ecommerce which created in turn a need for efficient, better, cheaper and more accessible B2C delivery services, both domestically and cross border. The B2C high-cost low-margin cross border parcel, from an unattractive business segment became the focus in the operational transformations of national postal operators and network operators alike.

Cross-border parcel & express services are still dominated by B2B shipments. A.T. Kearney estimated that B2C accounted for more than 90 % of domestic volumes but only 10 % of cross-border volumes in 2010. The B2C segment however is experiencing a tangible and steady growth overall which we will further explore in the sections that follow. However, this relatively low share of cross-border B2C volume reflects the comparatively lower importance of cross-border distance selling (ecommerce + catalogue) compared to its role in national markets , a trend however that it is expected to change if one takes into account the developments in ecommerce activity presented briefly in the introductory chapter of this Annex and explained in the section that follows .

In terms of volumes, international express shipments, according to WIK(2013) outperformed domestic parcel & express business , although regarding the total CEP market, domestic shipments still account for approximately 70 % of total revenues and approximately 90 % of volume in the total European parcel & express market.

In small countries cross border parcel & express services are more important than in large countries (e.g. in the Netherlands and Belgium compared to Germany and U.K.).

WIK(2013) also stipulate that although express services only account for one quarter of domestic shipments in cross-border market segments, express accounts for more than half of the shipments.

The international market is concentrated. According to AT Kearney (2012) the integrators alone (DHL Express, TNT Express, FedEX, and UPS account for 87% of the international express markets), a trend that is likely to continue in view of the announcement of the potential merger between TNT and FedEx . The share of network players in international standard is estimated at 52% in 2012 .

According to CE (2012) cross border deliveries account for 15% of total volumes, 80% of which are shipments within the EU.

In this segment one could envisage a further breakdown – relevant for an EU type of analysis- into intra and extra EU. It describes a situation when the sending operator and the final recipient customer (individual or business) are not residing in the same country.

This describes the situation when both the sending operator and the receiving customer (individual or business) are based in the same country (individual or business).

Statista (2012) reports that the share of the NPOs in the total B2C market reaches a maximum of 10% of the total segment in terms of volumes.

Apex insight (2015) reports that the CEP market leaders are the postal operators of the largest three countries (i.e. Germany France and the UK), including their express subsidiaries. The integrators follow with FedEx being the weakest of all. The total market owned by this leading group accounts for two thirds of the total CEP market in Europe leaving a non-negligible 1/3 to the smaller national operators and the independent carriers.

According to Effigy (2013) the top 10 European operators covering the B2C segment are the following, in terms of value and volume respectively. They either draw their power from the domestic segment and/ or the international segment.

Regarding the type of products the B2C segment covers, it is generally acknowledged that B2C types of deliveries involve the standard (deferred) type of shipments at levels that reach about 90% in total, when the express related deliveries (in the meaning of time definite) in the B2C segment are confined to only 10% of the total .

Although within the B2C segment external competition has developed throughout the years, the national postal operator (especially in the largest European CEP markets) continues to play a very important role in this segment. Exploiting the domestic national coverage and the combined delivery networks for letter and parcels in the rural areas (co-production), the former incumbents reach market shares in the B2C segment which exceed 50% in many European countries. Characteristic examples of this observation are Austrian Post, Post NL holds over 70% of the domestic B2C market, Deutsche Post-DE over 50% and French La Poste about 60%. Of course this dominance is not global, and the geographical location plays a role. WIK(2013) observes that although in the western part of Europe, former incumbents are strong in the national B2C market, in the southern and eastern EU countries, not only is the presence of the NPO in the B2C segment small but also that the B2C segment itself is small in relative and absolute terms. CE (2012) estimates that on average the market share of NPOs in the B2C segment is 35% (compared to a total of 27% in the total CEP market). An analytical presentation of the national postal operators' competitive position in the countries' competitive landscape will be presented in the sections that follow. In any event Copenhagen Economics reveal that out of all those shipments, roughly 35% fall under the Universal Service Area where certain requirements apply .

Note: Only a subset of operators is included in the table. Number of operators in each are potentially larger and/or with limited scope. Multinational operators UPS, DHL, TNT Express, FedEx (Integrators) serve most countries, also for domestic deliveries.

According to La Poste (2014) B2B continues to account for the major share with 70% in relation to B2C in terms of value. According to CE (2012) however, in terms of volumes the picture is reversed: B2B shipments are responsible for nearly 30% of the total shipments in Europe when B2C volumes are about 60% of the total. C2X volumes account for the remainder.

The segmentation presented above is of course relevant in the sense that the volumes related to specific customer groups as well as the prices each consumer group is likely to pay is closely dependent on the customer category. Other categorisations involve additional breakdowns (like C2G, i.e. citizen to governments, and vice versa) which however are not directly relevant to the analysis with which this Annex is engaged.

A second level breakdown for market segmentation is the nature of the sender and recipient. This breaking down the market according to the nature of the parcel flow:

According to ERGP (2015) "Report on the Courier, Express and Parcels Market" most countries in their regulatory framework define weight thresholds to distinguish the postal, the CEP and the freight sector; however these weight steps are not always aligned nor consistent across countries. In addition, the legal definitions of the CEP products -inspired by the regulatory framework of each country- also vary.

A specific categorisation of the CEP market is courier services. According to the DHL Logbook "Courier services transport spontaneously sent shipments that are highly valuable - e.g., watches, jewellery, and high-quality replacement parts. Characteristic features are permanent personal supervision of the shipment and the courier’s access to the shipment at any time in order to make arrangements. Another feature is that couriers provide seamless transport and delivery documentation. The shipments usually weigh an average of 1.5 kilograms. For national shipments, delivery is usually made on the same day or by 10 a.m. on the following day. The market consists of many small companies. Courier services are available both nationally and internationally". Courier services are not necessarily regarded as postal services in some MS and are often excluded from the legal act .

According to CE (2012) the express segment of the market represents roughly a 14% of deliveries in the total CEP market. It usually focuses on B2B shipments (and notably the international ones). According to AT Kearney (2012), the express segment is normally stronger in countries with poor quality of standard services, in remote areas, as well as in areas with high share of volumes originating from non-EU countries.

According to the Glossary for Postal statistics express services are services featuring, in addition to greater speed and reliability in the collection, distribution, and delivery of items, all or some of the following supplementary facilities: guarantee of delivery by a fixed date; collection from point of origin; personal delivery to addressee; possibility of changing the destination and address in transit; confirmation to sender of receipt of the item dispatched; monitoring and tracking of items dispatched; personalised service for customers and provision of an à la carte service, as and when required. Customers are in principle prepared to pay a higher price for this service. It can contain any postal item (the distinction with freight transportation is made in consideration of the upper limits for parcels).

According to a report commissioned by the Express Delivery Association for Oxford Economics (2010) the express services include value-added, door-to-door transport and deliveries of next day or time-definite shipments across the globe . Time definite shipments normally incur a transit time of less than 1 day within Europe, and between 2 to 5 days for extra-EU shipments, depending on distance.

According to La Poste Annual Report (2013) an express product is picked-up before 6 pm for delivery the next day before noon or 1 pm, in the national territory. This service is subject to various levels of guarantees depending on the operator and on the specific service/ product offered.

Deferred delivery services: in the boundaries between a typical ordinary parcel and a value added parcel, we can find the deferred parcel product. Usually transferred through a ground based network, a deferred parcel is usually picked up before 6pm for delivery in principle by the next working day before 6 pm for a domestic delivery, however, delivery times are not guaranteed.

Ordinary parcels are defined as items normally containing merchandise and sent by a standard/ordinary service, i.e. non-express and non-courier , and are carried by the designated USP or other postal operators. An average delivery time of this service can be 24-72 hours, that can be longer for cross border shipments, however the delivery time is not guaranteed. Those services can be a part of universal service specifications.

A first criterion for segmentation is per product, which can divide the market into the following segments:

Nonetheless, for the sake of the analysis we present segmentation that is relevant for our analysis, following the traditional way to study the CEP market.:

As it is often mentioned in related research , it is very difficult (often artificial) to segment the CEP market, given the heterogeneous nature of the sector and the observation that –especially nowadays- customer and product segments are often blurred due to the continuous transformation of the CEP competitive environment to meet the changing consumer preferences that in many instances converge.

The global competitive landscape according to BCG(2012) using however 2010 market data, and excluding the growing DHL Parcel division of Deutsche Post and the equivalent one for Post NL, as well as ColiPost for the domestic FR market, when comparing Europe with the other geographical regions in other parts of the world gives a comparable, though not identical environment. In general, in Europe, National Postal Operators are stronger in their national CEP markets than their foreign counterparts (the global estimate is at 14%, yet in Europe, the figure raises to 25 %). Another observation is that in Europe, there is more pluralism, with more operators being active in number (and value) in the various CEP segments creating a complicated, therefore more fragmented, competitive landscape, that what we observe outside Europe.

Now that e-commerce presents a growing importance, and the need for cheaper B2C Delivery solutions becames more obvious than ever, alternative business modes have been steadily developing integrating the delivery and e-retailer world, with the aim to offer tailor made delivery solutions at prices that are more affordable for both the e-retailer and the final consumer. Parcel consolidators offer an alternative business model to the CEP business. They have wholesale agreements with operators where the parcels originate (often with more than one operator ath the time) and offer to their customers (e-retailers in our case) the most appropriate solution what suites their individual needs. Parcel consolidators are present in the large CEP markets. FTI (2011) reports that they are not present in the Czech Republic, Slovenia, Slovakia, Malta and Luxembourg. Examples according to CE(2012) are: courier express, BTB Mailflight, IMX, my-ship.it etc., Parcel brokers are offering cheap delivery rates by re-buying slots in bulk and reselling them according to demand. Examples of parcel brokers in the EU are: Interparcel, , Parcelmonkey etc . Fourth Party logistic providers offer to their customers full integration and logistics fulfilment services. Examples according to CE(2012) are PFS Europe, Katoennatie, CEVA Logsitics etc. Software Solution Provides provide e-retailers and delivery operators with software solutions that can improve efficiency, which can include EDI, tracing, labelling, push notifications to recipients etc. Examples of those service providers are MetaPack, GFS, EDI – soft etc .

3) Express and Courier Operators with predominantly domestic presence: Apart from the operators above, we identify a number of medium-sized CEP operators (eg. Hermes - DE, Yodel – UK, Nightline –IE, MRW –ES etc.), who focus on the domestic and/ or cross border CEP services (but often not via their privately owned cross border delivery network). In addition to this, it needs to be noted that some alternative letter mail providers, traditionally optimising their networks to offer delivery letter mail services (eg. UniPost- ES, Sandd-NL) they are also expanding their business operations to cover parts of the CEP business , exactly as NPOs do, as we explained in the previous paragraph.

Although the NPOs where traditionally optimising their business operations to serve the letter mail segment, according to a survey conducted form BCG using IPC data, it is expected that until 2017, the parcel business (after the NPOs having followed a targeted strategy) will outweigh (in terms of value) the letter mail business for most European national operators. From a predominately letter mail delivery business, as from 2107 all national postal operators are highly likely to be transformed into a parcel delivery business .

Table below summarises the role of the national postal operator in the overall CEP markets in the EU. According to WIK(2013) the national postal operator accounts on average for about 20% of the corresponding national CEP markets. However this level is explained by their important role in the B2C segment of the mainly domestic market than by their role the B2B business segment (and B2B cross border segment in particular) where express operators draw their market power from.

Irrespectively of the direct international coverage they are able to offer, all national postal operators offer cross border delivery services within the framework of international or bilateral agreements with other partner national postal operators .

Other national postal operators have built up regional networks that enable them to offer delivery services in this specific region. PostNord AB –SE&DK, through is business division Posten Logistic, offers services in Denmark, Finland, Norway and Sweden. PostNL–NL, offers delivery services directly in Belgium and the Netherlands. CTT Correios –PT, offer services in Portugal and Spain (via its subsidiary Tourline Express) and Eesti Post –EE, offers delivery services in the entire Baltic Region .

Some of the biggest national postal operators have developed pan-European networks (either predominantly road based: Geopost, a subsidiary of La Poste- FR, GLS a subsidiary of Royal Mail -UK DHL Parcel, a business division of Deutsche Post-DHL -DE- or, predominantly air-freight based: DHL Express, a business division of Deutsche Post DHL- DE). Through these networks those operators are able to offer delivery services in Europe (and sometimes outside Europe).

In the table below, we present the list of the 28 National Postal Operators established in the European Member states as well as in the EEA/ EFTA countries.

2) National Postal operators (NPOs): This term describes the national (former incumbent) postal operators, that are offering letter as well as parcel services- (predominantly but not exclusively) in the country where they are operating (Royal Mail in the UK, La Poste in FR, Deutsche Post in DE, Correos in ES, Poste Italianne in IT etc.). Those companies are typically subject to universal service type of obligations (that are meant to ensure the provision of letter as well as parcel services to a certain quality standards at the national and cross border level). On top of this they often offer additional (value-added) services in their territory and/ or outside;

1) International Integrators (DHL Express, TNT Express, UPS and FedEx): This term is meant to describe those delivery operators that are able to provide time/ day definite domestic and cross border end-to-end delivery services mainly either through an owned (integrated) network or a network where the company has full operational control that (predominantly) uses air freight based transportation systems, but also complimentary ground operations.

The competitive landscape in the European CEP Market is quite fragmented and largely dependent on the business segment each operator focuses on. More information on which operators serve exactly what segment of the market will follow on the analytical country and operator presentation, in the sections that follow. However, in this introductory chapter, we can already identify the main categories of players (operators) of the European CEP markets:

Apex Insight (2015) reports the following growth rates for the EU28 as well as for the important national markets in the EU.

Independently of the estimation of the absolute CEP market size (that of course it is largely dependent on the countries participating in the market definition and the scope of products each definition includes), all studies confirm that the total CEP market is experiencing a growth in the last years that ranges from 3.2% - 5.7% in value and 4.8% - 6% in volume. This continuous annual growth helped the market to restore the market size to levels prior to those before economic downturn already in 2010, and as from then, the sector maintains a positive outlook . The three largest countries in terms of CEP turnover remain Germany the UK and France, followed by Spain, Italy and the Netherlands. According to WIK (2013) the Western European countries are responsible for 86% of CEP parcel volumes in the EU. A focused country by country presentation of the largest CEP countries will follow in the next sections.

Effigy (2013) identifies Germany UK, France, Italy and the Netherlands to be responsible for about 75% of the EU total CEP market (that according to their estimates reaches 42b Euros. The other countries follow with shares below 5%.

A.T. Kearney (2015) estimates the size of the CEP sector to be about 43.1bn Euros. They estimate that the total shipments related to the CEP market in 2011 account to 5.4 bn items . WIK (2013) believes that the sector's market size is considerably less (37bn Euros) in 2011 and that the sector is responsible for a total of 6.5bn shipments. La Poste (Annual Report, 2013) estimates the CEP market to be 42.8bn Euros . Apex Insight (2015) believes that the European parcels market was over €53.5 billion in size in 2014 . CE (2013) estimate that the European CEP market in in 2011 was valued at 46bn Euros. BCG (2012) estimates that the total CEP market (domestic European and cross border combined) is 37bn using however data of 2010, and estimated this total to be responsible for the 20% of the global CEP market . According to Apex Insight (2015), in most of the European counties, the parcels markets represents between 0, 3% and 0, 5% of GDP.

There is no commonly agreed definition among researchers for the CEP sector nor is there any standard way for measuring the sector's market size. Relevant market size estimates produce total market sizes ranging from 37-53.5 bn Euros.

According to data from Eurostat , in Europe there are over 296.000 companies active in the postal and courier sector, the vast majority of those being SMEs, with less than 450 companies employing more than 250 persons.

Source: WIK-Consult, Main Developments in the Postal Sector (2010-2013), p163. Based on WIK survey and WIK-Consult and ITA Consulting, Evolution of the European Postal Market since 1997 and AT Kearney, Europe's CEP Market: Growth on New Terms.

Between 2007 and 2011 the value of the EU postal sector decreased slightly from EUR 94 billion to EUR 91 billion (now accounting for 0.71% of EU27 GDP). However this decline is mainly caused by the decline in the demand for letter post services. Therefore, according to WIK (2013) , in 2011 it was already the turning point where the structure of the sector had changed. Today the CEP market is responsible for more than half of the postal sector's turnover in Europe.

The CEP market is identified as a distinct segment that naturally belongs in the postal and courier activities sector (postal sector for this analysis) . In EU28 in 2011, together with the letter post segment of the market they are responsible for a total of € 94bn of turnover, and 91 billion of shipments and for a total employment that is estimated to reach 1.5m employees .

In the sections that follow we present the CEP sector in Europe, and give emphasis to the B2C and also the cross border segments of the sector as, according to the analysis above, those segments seem to be particularly dependent on and affected by the trends and the dynamics we observe in the e-commerce markets. We nevertheless do not ignore the B2B and the domestic part of the operations, as analysts agree that is still relevant also for both e-commerce operational activities, as well as for today's market reality of delivery operators.

These barriers have already been highlighted by the European Commission in the Green Paper on an integrated delivery market to boost e-commerce in the EU and in the Commission’s roadmap for completing the single market for parcel delivery . In these documents, the Commission analyses the delivery related obstacles around five areas of potential inefficiency: lack of information, high costs for low volume cross border shipping, delivery services which do not meet the consumer needs, and lack of interoperability between the different delivery operators involved in cross-border delivery. Cross-border delivery has been also identified as a main priority in the Digital Single Market communication published on 6 May 2015 .

Copenhagen Economics, in their report on E-commerce and delivery identified three layers of barriers that relate to delivery. A first set of inefficiencies are created by information gaps, in the sense that consumers and e-retailers do not have access to adequate information to inform their decisions on the online transactions (15% of the consumer have abandoned their shopping cars because information was not clear enough). Service gaps are the second problematic area in relation to delivery. Service gaps occur as the service offer from the delivery operators is not meeting users needs, especially as regards convenience of the delivery experience and returns, as well as the affordability of the delivery service. The last set of gaps related to the delivery are performance gaps in the sense that delivery operators and e-retailers do not always manage to fulfil their contractual obligations in terms of quality of service (delivery times, home delivery etc.), problems mainly resulting from operational inefficiencies in the delivery leg.

ComScore (2014) in a survey conducted on behalf of UPS also highlighted the problems created by the delivery related barriers on the overall e-commerce activity. They also confirmed CE(2013) finding that more than 58% of consumers have abandoned their shopping carts due to high shipping costs and 50% was due to long delivery times. According to ComScore (2014) high shipping costs was the most common reason for abandoning the online purchase .

Copenhagen Economics. (2013) found after conducting a survey among 3000 e-shoppers that problems related to delivery are a key reason for not buying online. Delivery related problems are responsible for 68% of the situations where e-shoppers have abandoned their shopping charts before finalizing their order. The primary problem, according to Copenhagen Economics is that e-shoppers face suddenly unexpectedly high delivery costs and that delivery times are considered to be too long. In general e-shoppers have reported dissatisfaction levels at a rate of 38%, fact that could influence their decisions to continue buying online.

The recent survey of online consumers on DSM obstacles indicates that indeed concerns with respect to various delivery aspects were amongst the top consumer concerns in relation to purchasing online cross-border (27% high delivery costs, 24% high return shipping costs, 23% long delivery times, 15% non-delivery). Amongst online buyers who reported their most recent problem(s) when purchasing a tangible good/offline service in the last 12 months cross border within the EU, long delivery times (the highest ranked consumer problem overall) was reported by 14% of respondents (by 24% of those shopping outside the EU), while non-delivery and delivery of the wrong product were reported by 13% and 12% of respondents respectively (by 25% and 13% of those shopping outside the EU respectively).

To better interpret those results, one has to take into account that according to Eurostat data it is estimated that although over 296.631 enterprises are active in e-commerce and distance selling business in EU28 in 2012 only 220 of those companies are not SMEs.

Retailers often complain about a lack of transparency in information about cross border delivery, the lack of inter-operability between the different operators typically involved and the excessive costs of low volume shipments. These problems make it difficult for e-retailers to offer to their final consumers a satisfying e-commerce experience. On cross-border prices, studies show that listed tariffs for cross-border parcel delivery charged by national postal operators are estimated to be two to five times higher than domestic prices . University of St Louis, in a recent study commissioned for the European Commission also confirmed that cross border parcel list prices tend to be almost 5 times as high as their domestic equivalent (for details see chapter 8). A recent Eurobarometer on obstacles to cross border e-commerce, found that out of all companies interviewed who currently do not sell online but are currently trying to do so, 62% find delivery costs an obstacle .

Delivery related barriers are considered, amongst many others, an obstacle for both e-retailers and consumers, hindering their participation in e-commerce growth, particularly cross-border.

The IPC in their global postal industry report of 2014, believe that in the baseline of e-commerce developments postal operators are expected to benefit from the positive ecommerce trends. E-commerce flows in and around Europe should account for 25% of postal revenues in 2025.

The World Bank highlights that the importance of good logistics performance for economic growth is now established . E-commerce activity affects predominantly the B2C segment of the CEP sector, as it will be defined in the sections beelow. Pure B2B e-commerce also exists, but it is highly automated in nature, following perhaps the patterns of traditional B2B logistics operations and certainly without facing the challenges met in B2C e-commerce , described in the section that follows .

The figure below according to WIK (2014) provides a simplified illustration of the e-retailers supply chain and indicates the points where delivery requirements are involved in the ecommerce value chain.

However, in the cross border ecommerce delivery of physical goods tends to be even more important as overall, consumers seem to be more likely to buy products cross-border goods than services. In a survey among 4,135 European consumers 95.5% of experienced cross-border shoppers reported that they had bought a product compared to only 55.8% who reported that they had bought a service.

It is also clear that not all e-commerce purchases involving physical goods will lead to actual deliveries. Examples are groceries (supermarkets have naturally their own delivery operations to handle the demand) and two-man delivery (that involves heavy items that are naturally delivered through the freight and logistics sector). Click and Collect type of services bypass parcel statistics as parcels are normally delivered to the retailers distribution network for a direct pick up from the customer .

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