GREEN PAPER An integrated parcel delivery market for the growth of e-commerce in the EU
Date: 2012-11-29
Institutions: European Commission
Subjects: consumer information, delivery, economic growth, electronic commerce, fixing of prices, provision of services, retail trade, small and medium-sized enterprises

EUROPEAN 
COMMISSION 

Brussels, 29.11.2012  
COM(2012) 698 final 

GREEN PAPER 

An integrated parcel delivery market for the growth of e-commerce in the EU 

(Text with EEA relevance) 

EN 

   EN 

 
 
 
 
  
 
1.  Introduction 

E-commerce is widely acknowledged as a key contributor to economic growth and increasing 
employment  levels  across  the  European  Union1.  The  Commission's  Communication  on  e-
commerce and online services2 identifies the delivery of goods purchased online as one of the 
top five priorities to boost e-commerce by 2015 and its importance has been reiterated by the 
Council of the European Union and the European Parliament3. Delivery is indeed critical as it 
has  a  substantial  impact  on  facilitating  e-commerce  trade  and  is  a  key  element  for  building 
trust between sellers and buyers4.  

The commercial and – more broadly speaking – economic relationship between e-retailers and 
consumers is characterised by a series of complex logistics operations. The term "delivery" as 
used in this document refers to the shipment of physical goods ordered on line up to the point 
of  final  delivery  when  they  reach  the  end  customer.  Many  operators  play  a  role  in  this 
delivery process. In this document they are referred to as 'delivery operators' and they include: 
carriers,  postal  and  express  operators,  and  other  logistics  providers.  For  the  purpose  of  this 
Green Paper, parcel is defined here in the broadest sense and includes all items weighing up to 
30 kg5. 

The way goods are purchased and delivered in Europe is undergoing a rapid and fundamental 
change. As EU consumers increasingly look for and resort to online purchases, notably across 
borders, there is a growing need for a delivery system that meets their expectations and works 
smoothly to facilitate their daily lives, thereby generating greater confidence in, and increased 
use of, e-commerce6. The performance and affordability of the delivery system is also a key 
driver  of  the  sustainability  of  the  business  models  of  many  SMEs  and  in  particular  of  their 
ability to serve their customers. As SMEs are the driving forces of innovation and growth in 

1 The internet economy has brought about 21% of the growth in GDP in the last five years. It also generates 2.6 
jobs for every job cut and at times accounts for 25% of net employment creation (COM (2011) 942 final). 

2  "A  coherent  framework  for building  trust  in  the Digital  Single  Market  for  e-commerce  and  online  services", 
COM (2011) 942 final. 

3 Council of the EU, Conclusions on the Digital Single Market and Governance of the Single Market, 31 May 
2012; Resolution (P7_TA82010)0320) of 21 September 2010 on completing the internal market for e-commerce. 

4  42  %  of  online  businesses  in  UK  prioritize  improved  delivery  services  compared  to  18%  for  investment  in 
faster broadband. 

5 In short, any small items and goods that can be handled by one person. 

6 66% of all "cart abandonments" are due to delivery factors, '2011 consumer trends in multi-channel retailing', 
by Royal Mail. 

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Europe7,  improving  the  overall  delivery  system  for  goods  ordered  online  in  Europe  can  be 
expected to yield very significant results in terms of growth and jobs8. 

Many  surveys  and  industry  reports9,  as  well  as  interviews  with  various  stakeholders 
conducted  during  the  preparation  of  this  Green  Paper  converge  and  confirm  the  analysis  of 
delivery services as presented in the Communication on e-commerce and online services.  

Cross-border delivery is considered to be an obstacle by 57%  of retailers10, while 46.7% of 
consumers  declare  they  worry  about  the  delivery  in  cross-border  transactions.  Delivery 
concerns  and  those  relating  to  products  returns  are  the  top  two  concerns  of  consumers  in 
relation to online shopping11. Delivery failure, damaged or lost items and high delivery costs 
are also among the top ten concerns of consumers, contributing to low consumer confidence 
in cross-border e-commerce. Confident consumers will be increasingly inclined to buy on line 
if they are confident that their purchases will arrive in good condition, within the announced 
time frame, and there are easy to use return procedures in place12.The increased availability 
and  use  of  new  technologies  offers  a  new  range  of  opportunities  to  improve  the  quality  of 
delivery  services  as  well  as  customers  satisfaction.  The  emergence  and  growth  of  social 
networks has also had a significant impact on the way consumers interact with brands and buy 
goods  on  line.  Innovative  means  of  electronic  communication  between  e-retailers,  service 
providers and customers can contribute to more efficient and convenient delivery and return 
processes and higher quality perception. A better functioning e-commerce market will deliver 
tangible  mutual  benefits  to  consumers  and  SMEs,  as  well  as  all  actors  and  industry  sectors 
involved in e-commerce activity. 

7  According  to  estimates  from  FTI  Consulting,  small  retailers  account  for  22%  of  cross-border  e-commerce 
volumes. Eurostat estimates that over a quarter of all enterprises send e-commerce orders to other EU countries: 
of these, 23% are small enterprises, 41% are large and 33% are medium enterprises. 

8 A study carried out by Civic Consulting estimates that the EU is missing out on the potential of e-commerce: 
the total welfare gains for EU consumers from a hypothetical situation where the share of e-commerce in total 
retailing would be 15% (instead of the 2010 level of 3.5%) is estimated to amount to 204.5 billion Euros per year 
or 1.7% of EU GDP. 

9 "Focus on the Future" by BCG, May 2012; IMRG; ACSEL; "Intra-community cross-border parcel delivery", 
FTI  2011;  Set  of  national  On  line  barometers  by  E-bay;  "The  evolution  of  the  European  Postal  market  since 
1997", ITA/ WIK 2009; IPC Cross border E-commerce report 2010, Eurobarometer, "Consumer market study on 
the functioning of e-commerce and Internet marketing and selling techniques in the retail of goods", Civic 2011.  

10  Eurobarometer,  Business  attitude  Towards  cross-border  sales  and  consumer  protection,  Analytical  report, 
Flash Eurobarometer 224, July 2008, Chapter 2, section 2.1, page 21. 

11 "Consumer market study on the functioning of e-commerce and Internet marketing and selling techniques in 
the retail of goods", Civic Consulting, September 2011, pages 132, 40. 

12 A recent UK survey indicates that almost 65% of the respondents mentioned that the risk of failed delivery 
(due to no-one at home to receive the item) would prevent them from shopping online. Too vague timeslots and 
the risk that the item may not arrive on time are also a concern for about 43% of the respondents ("A study of 
online fulfilment requirements", IMRG UK Consumer Home Delivery Review 2012). 

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The importance of shipment and delivery is further amplified in the international context. As 
more  consumers  buy  from  Asia-Pacific  and  North  America,  and  more  European  e-retailers 
seek to export to these regions, trade flows between them are rising sharply. In this context, 
shipping and delivery elements are even more complex, evoke an additional set of concerns 
and security considerations and represent a major challenge, but also a unique opportunity for 
the development of European e-commerce, and notably for SMEs13. 

A more appropriate design of the delivery chain for e-commerce in the EU would also have 
positive implications for a number of policy areas such as: 

(cid:190)  Cohesion:  making  e-commerce  benefits  accessible  to  all  citizens  and  businesses, 

regardless of their size, via well-functioning delivery operations across Europe. 

(cid:190)  Employment:  ensuring  responsible  employment  conditions  in  the  delivery  sector, 

which operates under intense pressures to reduce costs and increase flexibility. 

(cid:190)  Innovation:  promoting  the  widespread  use  of  new  information  technologies  in 
delivery systems having immediate benefit for all citizens and businesses, and adapted 
to the new social media environment. 

(cid:190)  Environment: promoting sustainable development and optimised delivery logistics to 

allow for more energy savings and an overall reduction of negative externalities. 

(cid:190)  Competitiveness  of  European  industry:  building  on  the  strengths  of  the  European 
industry  (e-retailers  and  delivery  operators)  to  promote  investment  in  a  European 
delivery network which faces intense competition in the international environment. 

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

13 Communication "Small Business, Big World — a new partnership to help SMEs seize global opportunities" 
COM(2011) 702 final. 

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2.  Current market situation and perspective 

2.1  The European e-commerce market and the importance of delivery 

E-commerce markets in the EU are highly diversified, and at different stages of maturity, due 
to  different  consumer  practices,  taxation  considerations,  product  availability,  broadband 
access and competitive delivery markets. The trading profiles of national markets14 also have 
major implications for delivery15 while cross border delivery in Europe remains a challenge 
for consumers and e-retailers16. In addition, an efficient cross border delivery will sustain the 
growth potential of new market niches, thanks to the "long tail" effect17. 

The e-commerce market is evolving quickly and is increasingly demanding both in terms of 
innovative business solutions and consumers expectations. The delivery-related needs of the 
sector are increasingly diverse because of the growing number of product segments covered 
(such  as  books,  DVDs,  clothing,  small  electronic  items,  home  electronics,  furniture, 
household  appliances)  with  different  value,  different  weights  and  size  of  packages.  Social 
networks,  instant  information  technologies  and  the  generalisation  of  mobile  and  handheld 
devices  have  also  heightened  consumer  expectations  of  solutions  based  on  real  time 
information and flexible delivery options.  

E-retailers are under time pressure. New concepts and ideas need to be quickly implemented. 
The  viability  and  success  of  their  business  depends  on  the  ability  of  the  logistic  sector  to 
deliver at low cost, and in a convenient manner18. This applies in particular to smaller players 
on  the  e-commerce  market,  which  neither  have  the  bargaining  power  to  obtain  substantial 
discounts  from  delivery  operators,  nor  the  capacity  to  invest  in  a  logistics  network  of  their 
own.  In  an  environment  characterised  by  economies  of  scale,  this  risks  reducing  their 
competitiveness  vis-à-vis  larger  e-retailers,  as  consumers  increasingly  expect  "delivery  for 
free" offers when buying online19. 

14 E-commerce in the Nordics 2012, Postnord. 

15  Different  models  are  in  place  for  cross  border  shipments  notably  via  co-operation  between  national  postal 
services, via direct injection into the national postal system or via other agreements with logistic operators.  

16  In  the  EU-27  only  9%  of  EU  consumers  and  18%16  of  EU  retailers  use  cross-border  e-commerce;  48%  of 
consumers  reported  they  are  more  confident  in  buying  online  domestically  than  cross-border  (European 
Commission, Consumer Conditions Scoreboard, Consumers at home in the single market, March 2011).  

17 The total sales of products for which demand is low or whose sales volume is  low can equal or exceed the 
market shares of best-selling products if sellers can offer a wider choice. 

18  For  example,  57%  of  retailers  consider  cross-border  delivery  an  obstacle  (Flash  Eurobarometer  224,  July 
2008). 78% of eBay sellers identify delivery costs as the main obstacle to cross-border e-commerce, 42% refer to 
bad quality of delivery services (FreshMinds, Crossborder trade survey in the UK, Germany and France). 

19  In  a  survey  in  the  UK,  free  delivery  was  the  most-cited  factor  by  67%  of  respondents  for  making  them 
continuing  or  increase  their  usage  of  an  e-retailer  (Delivery  Matters,  2011  Consumer  Trends  in  multi-channel 
retailing _Royal Mail). 

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2.2 The European delivery market 

The EU parcel market was estimated to be worth € 42.4 billion in 2008 with the Business to 
Consumers segment representing 15 % of this market20. Over the last 5 years, and due to the 
growth of e-commerce, the B2C segment of the parcel and packet markets has grown rapidly. 
Estimates  of  today's  volumes  indicate  that  this  segment  now  represents  between  20  %  and 
40% of total volumes in more mature e-commerce markets such as the United Kingdom. 

The market is traditionally divided into express and standard parcel delivery. However, these 
current  definitions21  do  not  reflect  the  complexities  and  relative  importance  of  the  different 
offers  (standard,  deferred,  express  or  same  day  delivery,  tracking,  proof  of  delivery, 
registered)  and  the  reality  of  the  e-commerce  sector  which  also  refers  to  the  use  of  packets 
(small items below 2kg). 

Eurostat estimates that over a quarter of all enterprises send e-commerce orders to other EU 
countries.  Of  these,  23%  are  small  enterprises,  whilst  this  percentage  is  41%  for  large  and 
33% for medium enterprises22. Those small, infrequent customers who have low volumes and 
therefore have limited bargaining power with operators are confronted with far fewer delivery 
options. According to FTI estimations, published cross-border parcel prices (for non account 
customers)  charged  by  national  postal  operators  are  on  average  twice  as  high  as  domestic 
prices.  

Postal  networks  only  handle  part  of  the  parcel  volumes  (with  very  different  market  shares 
per  country)23,  and  only  a  small  percentage  (5  to  10  %)  of  these  volumes  is  subject  to  the 
universal  service  obligations  under  which  Member  States  need  to  ensure  both  national  and 
cross-border basic package delivery at all points in their territory at affordable prices for all 
users 24. As those obligations were agreed long before the advent of e-commerce, there were 
not designed with the specific objective of satisfying the current needs of this fast developing 
sector.  The  parcel  division  of  the  postal  networks  has  been  traditionally  organised  to  move 
parcels between 2 to 30 kg, but without the flexibility and capacity required by the growth of 
on line sales25. In recent years, some operators have nonetheless been able to reorganise their 

20 ITA/WIK 2009. These figures refer to 2008 and include parcel and express market. Another study from IPC 
indicates  the  value  of  the  EU  CEP  market  in  2008  to  be  €37.38  billion  (excluding  packets)  while  the  B2C 
segment represented 26% of the total EU CEP market.  

21 In the Postal Directive (Directive 97/67/EC, as amended by Directives 2002/39/EC and 2008/6/EC), items of 
correspondence or documents up to 2 kg are considered as letter, goods up to 20 kg are considered to be parcels. 

22 Eurostat (Isoc_ec_ebuyn2) Fig 11. 

23 Universal Service Provider’s market share varies significantly across member states: less than 10% in Member 
States like Bulgaria, Spain, the UK; between 10%-15% in Member States like Hungary or Italy; and more than 
25% in Member States such as the Czech Republic Denmark, France, Estonia- The Evolution of the European 
Postal Market since 1997, ITA/ WIK 2009. 

24 See Chapter 4 for more information on the Postal Services Directive. 

25 And notably for consumers and SMEs: the lack of a low cost option for packets (below 2 kg); service features 
such as track and trace options exist but may be offered only in combination with higher added value features.  

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parcel network, or are in the process of doing so, as they face high levels of competition in 
this sector in their domestic market.  

Express  operators  have  built  their  success  and  infrastructure  on  a  dedicated  integrated 
network  designed  to  deliver  for  the  business  to  business  segment  by  offering  premium 
services  (speed,  track  and  trace  options).  Recognizing  the  opportunities  of  e-commerce 
growth and the lack of satisfactory solutions for e-commerce players across Europe, they are 
now increasingly active in the Business to Consumers segment.  

Other logistics players in the field - such as consolidators, brokers, fulfilment services, third 
party logistics providers26 play an increasing role to fill in the gap between the e-commerce 
and  delivery  operators  in  terms  of  innovation,  flexibility,  stock  management,  transport  and 
return of parcels. The solutions that they offer are not yet widely known, in particular among 
SMEs.  With  more  visibility  they  could  play  an  increasing  role  in  facilitating  logistics 
operations for e-retailers in the future. By consolidating different sources of low volume, they 
could also be in a position to obtain more favourable terms/deals for delivery that could then 
be passed on to their contractors, and ultimately to consumers. 

Some  niche  players  are  emerging.  These  are  the  operators  who  have  designed  specific 
solutions  for  a  particular  product  segment  (for  example,  dedicated  shipment  and  delivery 
services for clothes ordered on line). In addition, more recently some leading e-retailers are 
also becoming increasingly involved in logistic and delivery, and are expanding their logistic 
services to include smaller e-retailers. 

Parcel  kiosks  (automated  lockers  where  parcels  are  deposited  for  the  consumer  to  pick  up 
using a special code) are being tested by operators in different countries and their generalised 
use  will  depend  on  whether  consumers  find  them  sufficiently  convenient  and  if  sufficient 
volumes are delivered in this manner. 

Relay points (network of shops supported by a technological platform where consumers can 
collect  their  parcels)  have  been  used  historically  for  the  distance  selling  segment.  Those 
networks have been upgraded with new information systems and form an alternative to more 
costly  home  delivery  services.  Their  success  depends  on  local  preferences  and  historical 
practices  but  there  are  indications  that  they  form  a  viable  and  promising  alternative  for 
e-commerce delivery. 

26 Third party logistics provide assistance to customers for outsourced services for part, or all of their logistics 
(such as, pick and pack, warehousing, documentation, labelling procedures and distribution). Online brokers and 
parcel consolidators offer discounts on single shipments by integrators, or national operators.  

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2.3 The interconnection between e-commerce and delivery markets 

Delivery  operators  recognize  the  opportunities  presented  by  e-commerce.  Creating  new 
delivery  models  for  the  Business  to  Consumers  segment  may  require  significant  investment 
and an extensive re-design of their operations. However, operations become complex27 when 
the  goal  is  to  reach  all  points  in  the  territory  against  a  background  of  volumes  that  are 
inconsistent and hard to predict.  

Additional choices for final delivery, such as office delivery or at a neighbour's residence are 
being  offered,  with  better  information  and  choice  progressively  being  introduced,  thus 
allowing consumers to decide where and when they want to receive parcels. Also some new 
business models are now emerging which offer better services for return products. 

Nevertheless,  these  new  solutions  are  slow  to  emerge  and  are  still  often  accompanied  by 
costly  added  value  features  which  are  not  always  required.  There  is  a  demand  for 
individualised small packets, with simple tracking solutions28 and affordable price29 which is 
currently not being met. 

From  an  operational  point  of  view,  delivery  services  are  complex  and  subject  to  many 
constraints. Traditional parcel services (with basic features, and high cross border charges) or 
high  added  value  express  operations  (historically  designed  for  the  Business  to  Business 
segment)  are  not  yet  adapted  to  the  specific  needs  created  by  the  e-commerce  world. 
Interconnection  between  postal  operators  in  cross  border  delivery  is  improving,  notably 
through  the  European  Parcel  Group30.  However,  only  a  part  of  the  flows  are  going  through 
this channel, and no alternative is offered for tracked packet services or non-priority parcels. 

27  Volumes  estimations  and  capacity  planning,  time  schedules  where  volumes,  routes  as  well  as  consumer 
expectations have to be taken into account. 

28 A survey by IRMG for their UK Consumer Home Delivery Review 2012, showed that 85% of the respondents 
listed access to online tracking information as the single most important way to make deliveries more convenient 
("IRMG UK Consumer Home Delivery Review 2012 – a study of online fulfilment requirements"). In a 2011 
survey  on  European  e-commerce  conducted  by  Accenture  for  the  European  Retail  Round  Table,  supply  chain 
and  delivery  issues  are  identified  as  a  barrier  to  market  entry  by  34%  of  the  respondents,  while  42%  of  the 
respondents indicated shipping infrastructure problems (European Cross-border E-commerce – the challenge of 
achieving profitable growth", Accenture January 2012). 

29 FTI (2011); Civic Consulting (2011); Mystery Shopping Evaluation of Cross-Border e-commerce in the EU 
(2009). 

30  Postal  operators  delivering  their  priority  parcel  products  through  the  European  Parcel  Group's  integrated 
delivery network benefit from a track-and-trace system and an automated customer service system linking each 
postal operator’s call centres. 

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In effect, two different worlds co-exist side by side, one is driven by marketing (e-commerce) 
while  the  other  (logistics)  is  driven  by  a  series  of  operational  demands.  Both  have  different 
business timeframes, different backgrounds, different usage of IT systems and solutions and 
different performance indicators for their businesses. Both e-commerce and delivery markets 
are therefore confronted with major and fundamental challenges: the e-commerce model has 
not yet fully stabilised while the logistic sector has yet to fully adapt to the requirements and 
demands  of  e-commerce.  In  such  a  rapidly  changing  environment,  investment  choices  and 
decisions are difficult to make.  

3.  Key challenges for the different actors 

3.1 Consumer experience and expectations 

Consumers want more convenient deliveries: more delivery options with the ability to decide 
their  preferred  one,  better  advance  information  on  the  delivery  process,  easier  return 
procedures  and  user  friendly  services  using  new  technologies  to  anticipate  delivery  (smart 
phones, tablets, SMS alert)31.  They  expect  more  transparency with  respect to the conditions 
under which their orders are shipped and most notably when packages are delayed, damaged 
or  lost.  At  the  same  time,  they  expect  transparency  with  regard  to  the  clarity  and 
comparability of prices as well as the level of competition.  

As  a  receiver  of  goods,  the  consumer's  decision  to  buy  is  heavily  influenced  by  the 
availability of free – or low cost – delivery (and return). Consumers also look increasingly to 
other national markets, but the complexity of and lack of transparency in cross border delivery 
is  a  major  hurdle.  As  a  sender  of  parcels,  and  notably  when  they  return  the  goods  ordered, 
consumers represent a relatively captive market, and high cost delivery is mentioned as one of 
the  main  reasons  for  their  dissatisfaction  with  on  line  shopping32.  Overall,  the  price  factor 
remains the most dominant driver when it comes to choosing a cross border delivery service 
option33. 

Convenience  varies  between  national  markets  and  type  of  products  delivered.  Surveys  of 
consumer preferences show that convenience aspects may relate to the entire delivery process.  

31 A number of surveys have been undertaken to identify the needs of consumers vis-à-vis the delivery of goods 
ordered on line. For example, "Home delivery in the UK 2011" by Snow Valley, IPC Cross border E-commerce 
report 2010; IRMG (2012), CIVIC (2011). 

32  A  study  on  consumer  experiences  with  online  shopping  shows  that  the  majority  of  problems  consumers 
experience when buying goods concern delivery: long delivery times (28% of consumers reporting a problem), 
damaged  product  delivered  (20%),  non-delivery  (17%),  wrong  product  delivered  (14%),  and  delivery  costs  or 
final price was higher than displayed on website (7%).  

33 IPC Cross border e-commerce report. 

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For example, a survey in the UK identified six main areas of customer preferences: flexible 
delivery options, affordable delivery charges, flexibility on where the order can be delivered, 
effective  communication  about  their  delivery,  fast  fulfilment  and  a  good  doorstep 
experience34.  In  particular,  the  provision  of  real  time  information  is  becoming  increasingly 
important, notably for the younger generation35. They want to be in control of their delivery, 
and expect to be offered tracking and texting (i.e. SMS alert) solutions36. 

3.2 Challenges faced by e-retailers when delivering goods to their customers 

E-retailers  want  to  respond  to  the  needs  and  expectations  of  consumers,  with  simple, 
transparent,  reliable  shipping  services37.  They  are  acutely  aware  of  the  fact  that  consumer 
feedback is heavily conditioned by the delivery experience which in turn has a direct impact 
on their brand name and image. 

They need more options, which a more competitive delivery market (i.e. one with more actors 
providing  different  offers  and  alternative  delivery  options)  should  be  in  a  position  to  offer 
them.  They  may  have  specific  delivery  needs  for  particular  products  (e.g.  medicines,  fresh 
products,  or  high  value  goods).  Yet  even  in  the  most  competitive  markets,  the  gap  between 
marketing driven e-commerce offers and operation-driven logistics processes still persists. 

The  logistics  part  is  critical  to  the  sustainability  of  the  business  of  e-retailers,  and  notably 
SMEs.  The  availability  of  affordable  and  efficient  delivery  solutions  is  particularly  relevant 
for those SMEs and micro-companies that operate from remote areas or peripheral regions. 

In  a  very  competitive  environment,  pressure  on  prices  is  a  key  determinant  of  who  gains 
market  share.  SMEs  looking  for  revenue  earning  opportunities  across  borders  are  heavily 
dependent  on  an  integrated  European  delivery  system  which  has  yet  to  emerge.  They  are 
looking  for  growth  in  other  national  markets  but  are  confronted  with  higher  costs,  greater 
complexity and a lack of transparency when it comes to cross border shipment38. Large sellers 
are far better placed to negotiate tariffs and conditions with delivery operators. 

Both large and small e-retailers need more flexibility from delivery services in general, and 
notably in terms of carriers' capacity and level of technological innovation. E-retailers have a 
specific challenge during peak periods such as before Christmas where carriers' capacity may 
not  be  sufficient  to  meet  demand.  This  is  a  major  issue  for  growth  and  sales,  due  to  the 
importance of this period for annual turnover.  

34 The 2011 online retail delivery report, Snow Valley. 

35 Consumer Focus.  

36 More and more UK consumers would like to receive a text to confirm information on delivery status: 80% of 
online shoppers say they like to receive updates at every stage of the delivery, Delivery matters, 2011. 

37 IPC Cross border E-commerce report 2010. 

38  Top  2  barriers  to  cross  border  shipping  in  France  are  the  high  cost  of  shipping  (78%)  and  poor  shipping 
services (42%), compared to 28% for lack of demand, or 12% for cultural differences (eBay report).  

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E-retailers  increasingly  want  to  be  in  control  of  the  shipment/delivery  process,  and  are 
entering  into  partnerships  with  delivery  operators.  Whether  they  choose  to  keep  the 
management  of  logistics  operations  in  house  or  sub  contract  it,  they  still  need  far  more 
information  and  transparency  from  their  delivery  service  providers.  They  also  need  more 
commonly  agreed  performance  indicators  for  their  shipments  to  help  adapt  their  business 
models to real time needs (management of stocks, payment, returns).  

Further  development  of  their  businesses  is  hindered  by  the  absence  of  a  delivery  network 
structured around their specific needs (as opposed to a mere adaptation of the historical parcel 
or  express  logistic  models).  More  integration  is  needed  to  avail  of  growth  opportunities. 
Better sharing of information and more flexible solutions to respond to their marketing offers 
would greatly improve their operations. 

3.3 Challenges faced by delivery operators 

Delivery operators are all those actors who play a part in the shipment of goods ordered on 
line  up  to  the  final  delivery  to  the  consumer  and  include  e.g.  carriers,  parcel  and  logistics 
operators, other logistics services providers, postal and express operators for the Business to 
Consumers segment. The logistics sector traditionally operates with low profit margins within 
a  high  fixed  cost  structure.  Delivery  operators  are  under  enormous  pressure  from  big  e-
retailers (large senders) to negotiate low tariffs.  

On the  other hand, delivery operators need sustainable  tariffs  in  the  long  term  to  be  able  to 
cope  with  the  high  fixed  costs  of  their  network39.  The  negotiated  price  regimes  granted  to 
large  senders  cannot  be  extended  to  senders  with  low  volumes,  let  alone  to  individual 
consumers. 

Delivery operators are increasingly confronted with the demands of e-retailers to offer, within 
a very short period of time, new services and options, at low cost. However, they need time to 
adapt their logistics operations which are complex and subject to many external constraints. 
The  degree  of  flexibility  which  is  expected  from  them  (and  their  workforce)  is  also  very 
demanding. 

Moreover,  the  lack  of  integration  between  the  electronic  communication  systems  of 
enterprises  along  the  transport  and  logistics  chain  is  a  key  stumbling  block,  notably  for 
smaller  shippers,  and  seriously  limits  their  choices  regarding  the  available  transport  and 
logistics  choices.  Increased  interoperability  could  speed-up  information  exchange,  ease 
consolidation of  transport needs, parcel delivery and invoicing, facilitate  co-modal transport 
and reduce administrative and IT implementation costs40. 

39 Including the costs for renewing the fleet in order to keep it updated to meet environmental standards. 

40 As in the demonstration action DiSCwise, (http://www.discwise.eu/). 

11 

 
                                                            
4.  The adequacy of the current regulatory and institutional framework 

The delivery sector is subject to a variety of rules and regulations which have an effect on the 
way  shipping  and  delivery  can  be  arranged.  The  most  relevant  ones  are  described  and 
assessed below: 

•  The  Postal  Directive41:  The  provisions  of  the  Postal  Directive  are  focused  on 
guaranteeing  a  (basic)  universal  postal  service.  Most  of  its  provisions  are  only 
applicable to the small part of the parcel market which falls under the universal service 
obligation (around 10% of parcel volumes) 42. 

The  rules  concerning  the  provision  of  a  (minimum)  quality  standard,  principles 
concerning costs and prices, price regulation, and information and data collection, are 
directly  and  in  most  cases  exclusively  linked  to  the  universal  services  obligation 
(USO). 

A few provisions – notably Article 19 on complaint procedures - allow for additional 
regulatory measures concerning parcel delivery outside the scope of the USO. Those 
provisions could in theory be appropriate for addressing concerns relating to quality of 
service.  However,  most  of  the  problems  which  have  been  identified  (inappropriate 
delivery times, lack of pick up/collection services, track-and-trace options and return 
procedures; lack of clarity concerning liability in cases of loss, theft, damage or delay 
and  lack  of  transparency/information  on  services),  would  not  be  covered.  In 
conclusion,  the  current  regulatory  framework  for  postal  services  is  not  designed  to 
address the needs of consumers who buy online.  

•  The consumer protection framework: Further improvements with regard to quality 
of service and consumer protection (notably in the area of online shopping) are to be 
expected following the full application of national rules implementing the Consumer 
Rights Directive (CRD) by 13 June 2014. Several provisions of the CRD will increase 
information  and  transparency,  such  as  (a)  the  elimination  of  hidden  charges  and 
greater price transparency for distance and off-premises contracts;(b) a longer period 
for the  right of  withdrawal (14 days); (c) better refund  rights  (e.g. reimbursement of 
delivery costs where applicable); (d) the possibility for the consumer to use a model 
withdrawal  form  (where  contact  details  and  returning  address  have  to  be  clearly 
specified);  (e)  clear  information  requirements  concerning  the  costs  of  return  of  the 
purchased item in case of a withdrawal.  

41 Directive 97/67/EC, as amended by Directives 2002/39/EC and 2008/6/EC.  

42 Only 36% of the parcel market is held by universal service providers; and of those 36% only a small amount 
fall under the universal service obligations. The minimum requirements in the Postal Directive entail the 
provision of over the counter or basic parcel services. Minimum universal service obligations are spelled out in 
article 3 of the Directive but Member States can go beyond these requirements. 

12 

 
                                                            
The CRD will also have an impact on parcel delivery services, because these services, 
specifically  with  regard  to  the  delivery  of  items  to  consumers,  form  part  of  the 
distance  and  off-premises  contracts  covered  by  the  CRD.  The  CRD,  once 
implemented,  has  the  potential  to  increase  consumer  confidence  in  cross-border 
purchases.  It  does  not,  however,  address  concerns  about  parcel  delivery  prices;  nor 
does the CRD provide a basis for clarifying the potential liability of delivery operators 
or for additional quality features (track-and-trace options, pick up/collection services, 
etc.) which online consumers might expect. 

The  proposal  for  a  Regulation  on  a  Common  European  Sales  Law  (CESL)43 
establishes a self-standing uniform set of contract rules applicable in cross-border B2C 
and  B2B  contracts.  It  contains  rules  on  delivery  of  goods  and  digital  contents,  in 
particular for sales contracts which involve the carriage of goods by a carrier. These 
rules  would  only  apply  when  the  Common  European  Sales  Law  is  chosen  by  the 
parties.  Like  the  Consumer  Rights  Directive,  a  future  CESL  will  not  address  parcel 
delivery concerns relating to excessive prices or certain quality features. 

The  new  Commission  proposal  for  alternative  dispute  resolution44  (ADR)  for 
consumer  disputes  aim  to  further  improve  consumer  protection  in  terms  of  dispute 
resolution.  Existing  provisions  on  consumer  protection  dealing  with  (postal)  parcel 
delivery (Article 19 of the Postal Services Directive) will be further enhanced by the 
ADR legislation45. 

•  Competition  law:  Prices  of  parcel  delivery  outside  the  universal  service  are  not 
subject to sector-specific regulation, but are subject to competition law. Articles 101 
and  102  of  the  TFEU  are  directly  applicable.  In  the  intra-EU  cross-border  parcel 
market, EU competition law (here: Article 102 TFEU) would for example be violated 
if  a  dominant  (cross-border)  parcel  delivery  operator  would  engage  in  predatory 
commercial behaviour in order to prevent entry to the cross-border parcel market. 

Article  101  TFEU  prohibits  any  agreement  between  undertakings  which  may  affect 
trade  between  Member  States  and  which  has  as  its  object  or  effect  the  prevention, 
restriction or distortion of competition within the internal market. 

43 COM (2011) 635final 11.10.2011. 

44 Commission proposal for a Directive of the European Parliament and of the Council on alternative dispute 
resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC 
(Directive on consumer ADR), COM(2011) 793 final adopted on 29 November 2011. 

45 Article 19 of the Postal Directive calls upon Member States to encourage the development of independent out-
of-court schemes for the resolution of disputes. 

13 

 
                                                            
•  Within  certain  limits,  the  delivery  sector  is  also  subject  to  the  provisions  of  the 
Services  Directive46  and  respective  national  implementing  measures.  The  following 
two  aspects  deserve  special  emphasis  in  the  context  of  e-commerce  and  related 
delivery: 

o  In its Article 20, paragraph 2, the Services Directive contains a prohibition of 
discrimination in the general conditions of access to a service on the basis of 
the place of residence of the recipient. It thus seeks to facilitate the delivery of 
services  on  a  cross-border  basis.  On  8  June  2012,  the  Commission  services 
issued guidance on the application of this obligation of non-discrimination by 
national  authorities47.  This  should  result  in  enhanced  transparency  on  the 
application of delivery restrictions (in advance of the obligation laid down in 
Article  8  of  the  European  Consumer  Rights  Directive)  and  reduce  consumer 
frustrations when being denied a supply on grounds of residence. The guidance 
also  clarifies  that  the  argument  by  a  business  that  there  are  no  options  for 
delivery  can  rarely  be  invoked  as  a  legitimate  reason  to  refuse  supply  of  a 
purchased  good  to  a  given  Member  State  because  of  the  existence  of  basic 
universal postal services. 

o  Article 22 of the Services Directive, which relates to information requirements 
for  service  providers,  aims  to  ensure  that  particular  information  is  always 
provided in an easily accessible manner to the service recipients (e.g. name and 
contact  details  of  the  provider;  general  terms  and  conditions;  price  of  the 
service).  

•  Transport and logistics-related issues at EU and international level are covered by a 
number  of  rules,  notably  in  the  context  of  the  completion  of  an  internal  market  for 
transport,  environmental  (e.g.  de-carbonisation  of  the  supply  chain,  reducing  air 
pollution from motor vehicles) and security issues. Key policy initiatives are set out in 
the Commission's White Paper "Roadmap to a Single European Transport Area" and 
the upcoming e-freight initiative48. 

•  Other relevant rules that may affect the sector include those dealing with issues such 
as urban planning, market surveillance, VAT, working conditions, and, in the case of 
external trade, customs, security and other international issues: 

o  Urban  planning:  Recently  many  Member  States  have  started  to  introduce 
specific rules on traffic in city centres (or even beyond these areas) in order to, 
for  example,  reduce  air  pollution  as  part  of  their  broader  policy  on  better  air 

46 Directive 2006/123/EC. 

47 http://ec.europa.eu/internal_market/services/docs/servicesdir/implementation/report/SWD_2012_146_en.pdf. 

48  EC-White  Paper:  Roadmap  to  a  Single  European  Transport  Area,  COM(2011)  144  final  and  the  e-Freight 
initiative: http://ec.europa.eu/governance/impact/planned_ia/docs/2013_move_001_e_freight.pdf. 

14 

 
                                                            
quality49 or to preserve their cultural heritage. Such national rules may affect 
the business solutions of delivery operators who need to adjust their collection 
and delivery times to time-slots available or even to ensure delivery by other 
means (e.g. bikes) as urban traffic may be prohibited at certain times. 

o  Market surveillance for products: the delivery sector is also subject to market 
surveillance  provisions50.  They  apply  irrespective  of  the  distribution  channel, 
including  distance  and  electronic  selling,  and  make  provision  for  controls  of 
products  entering  the  EU  market  by  customs  and  market  surveillance 
authorities. For example, where the market surveillance authorities find that a 
product entering the EU through a delivery operator does not comply with EU 
legislation,  the  authorities  must  take  appropriate  action,  which  may,  if 
necessary,  include  prohibiting  the  product's  being  placed  on  the  market.  This 
has  a  direct  impact  on  the  delivery  operator  which  may  have  to  return  the 
products or which, in some cases, may find themselves in a situation in which 
the products are destroyed by market surveillance authorities. 

o  VAT: National VAT rules and rates may have an influence on purchasers and 
on the choice of delivery services. If a delivery service is part of public postal 
services, it will be VAT exempt, if not, users of such services (may) have to 
bear  VAT  costs51.  VAT  rates  for  delivery  services  also  vary  across  Member 
States. This may have an impact on intra-EU trade flows.  

o  Working  conditions:  Delivery  sector  is  traditionally  regarded  as  a  labour 
intensive one, where the largest share of costs relates to the final mile delivery 
itself.  In  view  of  this,  many  "pay  for  the  delivery  service"  solutions  have 
developed in the delivery sector (e.g. fixed charge for delivery; pay per piece 
delivered), depending also on the applicable regulatory framework52. 

o  Customs and other international issues: There is variety of other rules resulting 
from  either  international  trade  agreements  or  EU  law,  which  may  have  an 
impact  on  cross-border  delivery  solutions,  including  intra-EU  flows.  For 

49  For  example,  Directive  2008/50/EC  of  the  European  Parliament  and  of  the  Council  of  21  May  2008  on 
ambient air quality and cleaner air for Europe, OJ L 152, 11 June 2008 provides for a regulatory framework in 
relation to air quality objectives in the EU. 

50 As laid down in Regulation (EC) No 765/2008 of the European Parliament and of the Council of 9 July 2008 
setting out the requirements for accreditation and market surveillance relating to the marketing of products and 
repealing Regulation (EEC) No 339/93 and Directive 2001/95/EC on general product safety. 

51 More on the scope of VAT exemption in the postal sector: see the preliminary ruling of the CJEU in case C-
357/07, The Queen, on the application of TNT Post UK Ltd v The Commissioners for Her Majesty’s Revenue 
and Customs, ECR [2009] I – 03025, paragraphs 36 – 40. 

52 For example, point 19 of Article 2 of the Postal Services Directive identifies compliance with the terms and 
conditions  of  employment  as  one  of  the  possible  essential  requirements  for  the  postal  service  providers  when 
applying for the authorization. 

15 

 
                                                            
example,  delivery  operators  exporting  to  and  importing  from  third  countries 
are  subject  to  customs  procedures  and  security  requirements  that  result  from 
international agreements (e.g. rules of the Universal Postal Union (UPU); rules 
of  ICAO)  or  from  the  EU  law  (e.g.  Community  Customs  Code53;  Regulation 
2320/2002 on air aviation security).  

o  Furthermore,  national  postal  operators  are  subject  to  specific  rules  of  the 

Universal Postal Union.  

Questions:  the  regulatory  and  institutional  framework  for  the  EU  parcel  delivery 
market 

1)  For the purpose of this Green Paper, 'parcel' is defined in the broadest sense and includes 
all  items  weighing  up  to  30  kg.  Are  there  particular  elements  which  in  you  view  are  of 
crucial relevance for the qualification as 'parcel' in the context of the ambition to achieve a 
more integrated, well-performing parcel delivery market in the EU54? 

2)  Is, and if so to what extent, the existing framework an obstacle to the creation of a truly 
integrated  European  parcel  delivery  market  that  meets  the  needs  and  expectations  of  e-
retailers, consumers and workers in the sector? 

3)  What  are  the  top  three  challenges  posed  by  the  regulatory  framework?  What  could  be 

done to help you respond, in the short and long term, to these challenges?  

4)  Do you consider there are regulatory gaps or a need for additional measures/regulation? If 

so, please specify. 

5.  Towards a truly integrated EU parcel delivery market  

Based  on  an  analysis  of  the  existing  regulatory  and  institutional  framework,  the  following 
chapters  will  focus  on  three  main  issues  that  are  considered  instrumental  in  creating  an 
integrated EU parcel delivery market that provides both e-retailers and their customers with 
the delivery solutions that they need: 

•  Convenience: Greater convenience and transparency for consumers55. 

•  Costs: More cost effective delivery solutions notably cross border. 

53 Regulation (EEC) No 2913/92 of the Council of 12 October 1992 establishing the Community Customs Code, 
OJ L 302, 19.10.1992. 

54 Please note that your replies to the subsequent questions should at any rate be based on the definition as set out 
in the Green Paper.   

55  47%  of  consumers  indicate  that  the  lack  of  delivery  convenience  may  prevent  them  from  shopping  online 
(Consumer Focus research on consumer needs, November 2010). 

16 

 
                                                            
• 

Interoperability:  A  greater  level  of  interoperability  between  operators  along  the 
delivery chain, and better coordination between e-retailers and delivery operators. 

In the following sections, different aspects of these three objectives are being tested in order 
to  best  identify  possible  solutions  towards  improving  the  current  situation.  In  addition, 
consideration  is  given  to  evaluating  the  extent  to  which  efficient  markets  might  be  able  to 
deliver desired results, or whether changes to the current supervisory or regulatory framework 
might have to be envisaged. 

5.1 Improving consumer experience and convenience  

5.1.1  Increase transparency 

When shopping on line, one  would expect customers to be provided with more  information 
about  possible  delivery  options,  their  associated  prices  and  service  levels,  and  the  practical 
modalities of delivery (i.e. time and place of delivery)56. 

56 In addition to the requirements in EU consumer legislation that oblige traders to provide clear and transparent 
information to consumers, notably their rights to withdraw from distance contracts. 

17 

 
                                                            
During and after the delivery process, customers should be able to share their judgement on 
the  actual  quality  of  the  delivery  services  received.  More  transparent  information  about  the 
actual  performance  of  deliveries,  especially  for  cross-border  purchases,  can  serve  several 
purposes. First and foremost, it will allow consumers to make more informed choices for their 
subsequent purchases, choosing – where this is possible – the delivery option that they most 
trust and that are best suited to their needs. Second, enhanced transparency will also create an 
incentive for delivery operators to further improve their performance. Third, opening up this 
delivery  "black  box"  will  also  help  change  customer  perception  of  actual  delivery 
performance in cases where such perception has been erroneous or unrealistic.  

Different  options  are  being  tested  to  increase  transparency  with  respect  to  delivery 
performance for packets and parcels.  

Questions: improving consumer experience and convenience- more transparency 

5)  Information on delivery options and modalities 

a) 

b) 

Which information57 should be made available to consumers on the e-retailer's website 
(name and contact details of the delivery operator(s), the delivery price, the time and 
place  of  delivery,  information  about  complaint  handling,  track  and  trace  options, 
return options)? 

Taking into account the risk of information overload, what could be done to provide 
consumers at the right moment with clear, transparent and comparable information on 
delivery? 

6)  Information on the quality/performance of delivery 

a) 

Performance indicators relate, for instance, to the speed of delivery, the geographic 
coverage  of  the  delivery  operator,  delays,  damaged  or  lost  items.  How  can  such 
performance-related  information  be  measured  and  gathered?  Would  publishing  the 
results  of  such  performance  indicators  create  added  value  for  consumers?  Is  there  a 
need to develop standards to monitor such performance levels? 

b)  Would trust labels (e.g. a certificate given by an industry association that the delivery 
process of an operator can be trusted as they meet requirements based on best practice) 
offer a more efficient way to increase consumers' confidence?  

c) 

Would  ISO  certification  of  a  quality  process  aiming  at  efficient  delivery  be  an 
appropriate tool to increase consumers' confidence? 

57  In  addition  to  the  information  requirements  in  the  EU  consumer  legislation  and  the  Services  and  the  E-
commerce Directives (2006/123/EC and 2000/31/EC). 

18 

 
                                                            
7)  Independent supervision: 

Who  should  take  the  lead  to  monitor  performance:  an  industry  organisation,  an 
independent body, a regulator?  

5.1.2 

 Providing better service and more safeguards to consumers  

While  consumers  attach  importance  to  the  delivery  of  their  parcels,  they  do  not  necessarily 
know  much  about  the  type  of  delivery  operator  providing  delivery  services.  What  matters 
most to them is, to whom they can turn when they have questions about delivery and who will 
give  them  quick  answers  and  accurate  information.  This  is  particularly  relevant  in  cross-
border situations, which usually involve several delivery operators.  

The  existing  regulatory  framework  only  covers  part  of  the  delivery  needs  of  consumers 
buying  on  line.  The  EU  Postal  Services  Directive  was  not  designed  for  the  e-commerce 
environment, and postal operators are only one of the numerous actors in parcel delivery. The 
Consumer Rights Directive provides for many safeguards for consumers buying on line such 
as the notification of price, delivery delays and return process. Specific issues with delivery 
may remain a concern for consumers and more specific safeguards may be needed. 

The  current  universal  postal  service  only  provides  a  'safety  net'  for  occasional  senders  of 
parcels. Some stakeholders have argued that the growth of e-commerce in the B2C segment 
and  the  importance  of  a  convenient  last  mile  delivery  might  require  a  new  definition  (of 
universal  service)  which  needs  to  be  more  closely  aligned  with  on-line  consumer 
expectations. Such a "new" universal service should meet the demands of consumers in terms 
of a minimum level of convenience – notably in terms of information on the delivery process 
and options for returning items – and meet the demands of e-retailers in terms of tracking and 
affordability of their marketing offer. It is argued that, when consumers want features that go 
beyond such minimum quality standards; markets would offer alternative options and services 
to meet those more advanced needs.  

19 

 
 
Questions: increasing consumer experience and convenience – better services and more 
safeguards 

8)  Possible need and scope of a universal delivery service for parcels: 

a) 

b) 

c) 

Is  there  a  need  for  a  new  universal  service  obligation  to  address  the  ubiquity, 
affordability and quality of parcel delivery services? 

If so, what could be the main characteristics of this 'new' universal service (in terms of 
service levels, convenience and affordability)? 

From a delivery operator perspective, do you think a universal (parcel) service would 
be feasible in terms of cost/profitability? If so, at what level? 

d)  What would be the best tools to implement such a concept (e.g. guidelines; revision of 
the Postal Directive; new regulatory instrument with enhanced powers of the national 
regulatory authorities)?  

9)  Improving consumer experience  

a) 

b) 

c) 

Taking into account the existing set of consumer rights, how could consumer concerns 
and complaints about delivery be addressed most effectively58? 

Do  you  have  any  concerns  about  liability  regimes59  in  the  event  of  lost  or  damaged 
parcels? What could be done to improve the situation? 

Could the e-commerce industry and delivery operators come up with more proactive 
solutions  to  better  respond  to  consumers?  What  actions  could  be  taken  quickly  to 
improve the situation in the short term? Which medium to long term solutions could 
be envisaged? 

5.2 More cost effective and competitive delivery solutions 

Consumers and e-retailers consider generally current price levels to be too high. By contrast, 
operators  argue  that  they  already  work  with  low  margins  and  that  sustainable  prices  are 
necessary to ensure their long-term economic viability.  

58  See  Article  19  of  the  Postal  Service  Directive  establishing  transparent  complaint  procedures,  mediation 
services and alternative dispute resolution systems. 

59  On  the  specific  subject  of  multimodal  liability,  the  Commission  is  awaiting  the  outcome  of  the  ratification 
process of the Rotterdam Rules by Member States. 

20 

 
 
                                                            
5.2.1  Controlling costs 

As  outlined  above,  prices  for  cross-border  parcels  are  considered  too  high  in  particular  for 
senders of small volumes. This section explores options that might enhance the cost efficiency 
of  delivery  services,  which  would  allow  for  cost  reductions  to  be  passed  on  to  the  users  of 
these services. 

Cost  structures  vary  considerably  between  operators,  as  geographical  and  individual  factors 
(such as density, volumes, timing constraints) may differ. Published tariffs are typically based 
on average weight, insurance levels and speed, but these do not necessarily match actual costs 
incurred  by  operators60.  B2C  delivery,  notably  for  packets,  is  considered  costly  by  delivery 
operators.  Solutions  envisaged  to  ensure  the  success  of  the  first  delivery  attempt  (such  as 
more  up-to-date  address  database,  pre-information  on  delivery)  can  reduce  extra  costs.  A 
different design of delivery operations (such as relay points or parcel kiosks) may also have 
the potential to limit the costs of delivery.  

Increased  consolidation  of  small  volumes,  notably  from  SMEs,  also  offers  the  potential  for 
overall cost reduction. More synergies between operators would generate increased efficiency 
in  a  market  driven  by  economies  of  scale.  In  the  cross  border  context,  they  would  also 
enhance the fluidity of parcel flows.  

Questions: more cost effective and competitive delivery solutions- controlling costs 

10) Different options could be envisaged to control costs: 

a) 

b) 

c) 

Are  there  any  outstanding  examples  of,  or  best  practices  for  alternative  delivery 
solutions allowing for a reduction of costs?  

Are there any outstanding examples of best practices to increase efficiency61? 

What type of technology can or could reduce the cost of delivery?  

d)  What  could  be  done,  in  your  view,  to  remove  or  alleviate  current  regulatory 
constraints without putting the attainment of their underlying objectives at risk62? 

60 For cost allocation purposes, "weight, insurance levels and speed" are not necessarily cost drivers which are 
associated  with  all  postal  activities  (collection,  transport,  sorting  and  delivery).  Additionally,  the  allocation  of 
common costs to the various postal products usually involves the use of a general allocator (such as EPMU – 
Equally proportionate mark-up price), where the different cost attributes such as weight are not directly relevant. 
This  means  that  this  cost  calculation  based  on  the  above  mentioned  cost  allocation  principles  does  not 
necessarily yield the same result as using weight, or other single attributes, as a proxy for cost. 

61  E.g.  an  increased  level  of  harmonisation  of  delivery  process,  efficiency  gains,  consolidation  and  sharing 
facilities 
initiative: 
http://ec.europa.eu/governance/impact/planned_ia/docs/2013_move_001_e_freight.pdf. 

e-Freight 

logistic 

hubs. 

local 

also 

See 

at 

62 See Chapter 4 on the current regulatory framework.  

21 

 
                                                            
5.2.2  Competitive but sustainable prices 

The need for sustainable tariffs 

Parcel  operators  are  concerned  by  potential  increases  in  costs  which  might  have  to  be 
reflected in higher prices to customers. At the same time, consumers are getting used to "free 
shipping"  offers,  as  a  result  of  which  they  might  underestimate  the  true  operational  and 
societal costs linked to delivery operations. 

Large  e-retailers  are  able  to  negotiate  tariffs  because  of  their  volumes.  The  pressure  on 
margins of operators may be significant, whilst these operators need to make new investments 
to adapt their operations to the demands of e-commerce. 

The notion of "sustainability" of prices in this section refers to  prices that would reflect the 
true costs of the underlying service arising both to service providers (i.e. ensuring their long-
term  profitability)  and  to  society  at  large  (e.g.  in  environmental  and  social  terms)  –  on  the 
assumption,  however,  that  national  and  cross-border  delivery  markets  are  sufficiently 
competitive and hence efficient. 

Questions: competitive but sustainable prices – sustainability and transparency of tariffs 

11) Sustainability of tariffs: 

a) 

b) 

c) 

Do you think that the current level of tariffs charged to consumers for home delivery is 
sustainable in the medium and long term? If not, what should be done to mitigate this? 

Should the actual cost of delivery incurred by e-retailers be made more transparent to 
consumers? If so why?  

Should the true costs of delivery to the society at large be made more transparent? If 
so why? And how?  

More competitive delivery markets 

Consumers often perceive the choice of delivery solutions to be very limited due to the lack of 
transparency of the market, and the actual state – or perceived state – of competition on the 
market. In some cases, the relevant delivery markets may be dominated by a small number of 
operators whose behaviour prevents e-retailers and consumers from reaping the full benefits 
of truly competitive markets. 

Specific  ex  ante  regulatory  solutions  could  be  envisaged  to  the  benefit  of  consumers  by 
making delivery markets competitive on a sustainable basis.  

22 

 
Questions: competitive but sustainable prices - more competitive delivery markets 

12) Level of competition in delivery markets:  

a) 

b) 

In which markets, or market segments would more competition be essential?  

Publishing  price  comparisons  would  provide  more  clarity  to  consumers  and  SMEs. 
How could this be done? What would be the pro and cons? 

13) Oversight and regulation:  

Ex ante regulatory measures (such as transparency obligations, obligations to provide access 
to delivery networks, and obligation for tariffs to be cost oriented, etc.) imposed on delivery 
operators with significant market power can lead to more competitive markets. 

a) 

Which would be the relevant markets to consider in this respect? 

b)  What  are  the  specificities  of  cross-border  operations  which  could  justify  cost 

constraints? Please specify.  

c) 

d) 

Should  the  regulator  have  more  information  on  cost  accounting  data  of  operators  to 
better assess the cost-price structure of packets and parcels? 

Should regulators and/or competition authorities play a more active role in overseeing 
the national markets or market segments concerned?  

More competitive prices for cross border delivery services 

Prices for cross border services are a particular concern for consumers and e-retailers, notably 
SMEs.  Tariffs  vary  significantly63,  even  for  orders  containing  the  same  range  of  goods  and 
sent to the same destination. Hence there is a need to identify solutions to limit the impact on 
delivery prices of crossing border and to close the existing gap between the domestic and the 
cross-border price, where it is not objectively justified. 

63  FTI,  CIVIC  (2011),  Eurobarometer,  Accenture  "European  cross  border  e-commerce"  (2011),  YouGov 
Psychonomics  "Mystery  Shopping  Evaluation  of  Cross-Border  e-commerce  in  the  EU"  (2009).  YouGov 
Psychonomics  reports  that  the  delivery  price  charged  by  e-commerce  and  distant  vendors  to  consumers  is  on 
average  twice as  high for  cross-border  than  for domestic deliveries:  the average  cost  of  shipping  for domestic 
offers was €8 whereas for cross-border it was €16.

23 

 
 
                                                            
 
Questions: competitive but sustainable prices - more competitive prices for cross border 
delivery services 

14) How can more competitive and transparent cross-border tariffs be ensured?  

a) 

Should it be left to market forces to provide the tariff levels and levels of transparency 
that are demanded by e-retailers and consumers? 

b)  Would  more  regulatory  supervision  contribute  to  achieving  sustainable  prices  for 

consumers? 

c) 

Do  you  think  that  applying  some  type  of  price  cap  for  single  piece  cross  border 
packets and parcels would be a feasible and effective option to address the needs of e-
retailers  and  consumers?  What  would  be  the  impact  of  such  a  price  cap  on  market 
offer and competition? 

5.3 Improving interoperability along the delivery chain  

More  transparency  and  better  partnerships  are  required  in  order  to  address  the  need  of  e-
retailers,  to  better  understand  what  constitutes  best  logistic  and  delivery  practices  and  to 
effectively  communicate  the  delivery  options  that  are  available  to  consumers.  Successful 
partnership  within  and  between  these  two  sectors  will  be  decisive  for  the  future  of  e-
commerce.  

5.3.1  Investment to increase the use of technology 

A more generalised use of tracking could empower clients, enabling them to dictate the place 
and time of delivery. This would improve the success rate of first delivery attempts and thus 
bring  down  costs.  At  the  same  time,  e-retailers  would  obtain  appropriate  and  pertinent 
information, and would thereby be in a position to better manage stocks, optimize refund and 
return processes and simplify administration processes.  

Questions: improving interoperability - investing in technology 

15) Levels of investment required:  

a) 

To  what  extent  is  it  possible  to  evaluate,  both  at  micro  and  macro  level,  the 
approximate cost of a generalised track and trace system for parcels? Which would be 
the most relevant parameters to take into account? 

b)  What specific pilot projects for delivery of e-commerce products could be promoted, 
possibly within broader programmes aimed at fostering investment in information and 
communication technologies64?  

64  Competitiveness  and  Innovation  Framework  Programme,  Digital  Convergence  Operational  Programme,  or 
other initiatives to develop specific technologies, such as, the use of Radio Frequency Identification Data. 

24 

 
 
                                                            
5.3.2  Enhanced partnerships between e-retailers and delivery operators 

Operators  tend  to  focus  on  their  big  clients  with  large  volumes  and  have  less  incentive  to 
invest in marketing their services to smaller shippers, although they would in principle have 
the  potential  to  increase  their  business.  Also,  e-retailers  are  not  always  aware  of  possible 
alternative solutions and available offers. 

Questions: improving interoperability - enhanced partnerships 

16) Partnerships and cooperation: 

a) 

b) 

c) 

Is better co-operation between e-retailers and delivery operators likely to increase the 
interoperability of operations? If yes, what specifically could retailers and operators do 
to build new or improve existing partnerships?  

Should contingency capacities be jointly developed to deal with peak periods? If yes, 
how could this be done? 

Would  you  need  the  services  of  facilitators  and  third  party  logistics  providers?  How 
can those –new or existing- services develop, become better known and more visible?  

5.3.3  Interconnected networks and platforms 

E-retailers depend on the completion of the Single market for the delivery of e-commerce 
purchases. The lack of integration and the inability to transfer data between different 
information systems is a major hurdle to cross-border trade65, and significant investments will 
be needed to adapt current systems.  

However,  when  postal  operators  shipping  goods  internationally  were  put  under  pressure  by 
airlines  and  customs  authorities  to  meet  higher  security  standards  after  the  identification  of 
significant security risks, they were successful in finding solutions to exchange the required 
data. A similar effort may be necessary to ensure that e-commerce needs are addressed in a 
joined up fashion with e-retailers.  

The Commission services have already launched a number of demonstration actions aiming to 
improve the competitiveness of the transport and logistics sector in Europe, through the smart 
use  of  information  technologies  and  connect,  in  particular  smaller  enterprises  to  digital 
transport and logistics value chains66. 

65 On the one hand, there are differences between domestic and cross-border IT platforms, which may even differ 
for  those  delivery  operators  which  have  a  cross-border  presence  in  the  EU.  On  the  other  hand,  there  is 
information which could be shared between e-retailers and delivery operators so as to improve capacity planning 
on both sides. For example, e-retailers have the data regarding the products bought online and know when and 
how much will be put in the delivery pipeline. As for returns, it could be useful for e-retailers to be informed 
about  the  volume  and  time  of  returns  in  real-time,  which  would  allow  for  proactive  customer  care  and  for 
effective stock management. 

66  The  DiSCwise  project  (http://www.discwise.eu/),  funded  by  DG  ENTR,  aims  to  get  stakeholders  more 
connected,  by  assisting  their  integration  into  efficient  co-modal  supply  chains.  It  allows  transport  &  logistics 

25 

 
 
                                                            
Questions: improving interoperability - interconnection 

17) Better interconnection: 

a) 

b) 

c) 

d) 

e) 

Could logistics platforms67 for groups of operators better meet the needs of e-retailers? 
If yes, how? 

Could an industry task force68 contribute to promoting innovation and increasing   the 
use of new technologies to facilitate greater level of interconnection? If so, how? 

Should  the  processes  used  to  return  goods  (both  domestically  and  cross  border)  be 
improved? If so, how? 

Are interoperability requirements and the promotion of new technologies difficult for 
SMEs  operating  in  the  delivery  chain?  What  actions  could  help  mitigate  such 
difficulties? 

What are (if any) the main three actions which could improve interoperability across 
EU borders for moving goods ordered on line69? What could be done to improve the 
situation in the short term, what initiatives could be taken in the medium to long term? 
Also what needs to be done to improve interoperability at the international level? 

6.  Governance for an integrated European parcel delivery market 

The  future  landscape  of  European  e-commerce  will  be  shaped  notably  by  the  delivery 
capacities and networks which will be put in place in the near future. These changes and their 
impact  on  the  e-commerce  sector  need  to  be  monitored,  and  efforts  to  promote  an  efficient 
and  sustainable  European  delivery  environment  for  e-commerce  orders  should  be  co-
ordinated.  

service users and providers, in particular SMEs, to more easily participate in transport planning and execution, 
making use of sustainable transport alternatives. 

67  Ideally,  those  platforms  would  streamline  delivery  for  e-commerce,  integrate  logistic  services  with  shared 
information  systems,  improve  coordination,  and  use  a  common  or  agreed  carrier  for  delivery  (limiting 
environmental impact and facilitate handling of returns and management of stocks). 

68 An example of such a task force was the former US Mailing Industry Task Force which was created in the 90's 
and brought together senior technology officers from key industry stakeholders to find innovative and intelligent 
solutions to better deliver mail. 

69 Currently about 30% of online shoppers in the UK indicate they buy goods from foreign websites (also outside 
Europe).  The  intra  -EU  average  for  on  line  cross  border  is  at  around  10  %.  Against  that  background,  the 
importance  of  agreeing  on  European  and  international  standards  and  ensuring  a  higher  degree  of  connectivity 
becomes clear, notably for SMEs and consumers who are disproportionally affected. 

26 

 
 
                                                                                                                                                                                          
Some  actors  already  have  platforms  for  co-ordination,  for  example  the  European  Parcel 
Group70  which  brings  together  incumbent  postal  operators.  As  for  regulators,  the  European 
Regulators  Group  for  Postal  services71  aims  at  facilitating  coordination  and  cooperation 
between  independent  national  regulatory  authorities  with  a  view  to  ensuring  the  consistent 
application of the Postal Services Directive. Currently their activities and roles do not cover 
the  full  range  of  e-commerce  activity.  New  fora  could  play  a  role  in  building  a  single 
European delivery market for e-commerce.  

More focused cooperation, supervision and enforcement is needed to push the coordination of 
efforts  to  promote  the  delivery  sector  for  e-commerce.  This  will  add  to  the  momentum  to 
facilitate improved delivery of e-commerce goods.  

Questions: governance  

18) Are  there  areas  which  could  be  effectively  tackled  by  the  industry  to  address  the  issues 
identified  in  this  Green  Paper?  How  could  this  be  promoted72?  How  to  involve  both  e-
commerce and delivery industry associations? 

19) How  should  current  governance  aspects  of  standardisation  and  interoperability73  be 
addressed?  Is  there  a  need  to  increase  involvement  of  representatives  of  e-commerce, 
notably SMEs, and consumers?  

7.  Follow up and next steps: 

All  interested  parties  are  invited  to  submit  their  views  in  response  to  the  above  questions. 
Contributions should be sent at the latest by 15 February 2013 to the following addresses:  

markt-delivery@ec.europa.eu 

or 

European Commission 

DG Internal Market and Services  

On line services unit 

Rue de la Loi 200 

70 See footnote 17. 

71 Commission Decision 2010/C217/07. 

72  For  example,  the  promotion  of  best  practices,  partnership  agreements,  codes  of  conduct;  standards  for 
electronic data transfers, labels, address databases; developing a European delivery label. 

73  At  present,  standardisation  issues  are  dealt  with  in  the  CEN  Technical  Committee  for  postal  services,  and 
interoperability issues among some postal operators are handled by the European Parcel Group. 

27 

 
                                                            
1049 Brussels 

Contributions  do  not  need  to  cover  all  questions  raised  in  this  Green  Paper.  Accordingly, 
please  indicate  clearly  the  questions  to  which  your  contribution  relates.  If  possible,  please 
give specific arguments for or against the options and approaches presented in the paper. In 
your  contribution,  you  are  also  invited  to  give  views  on  whether  there  are  any  other 
aspects/issues that need to be addressed to achieve an integrated parcel delivery market in the 
European Union. 

Contributions  will  be  published  on  the  website  of  DG  Internal  Market  and  Services.  The 
responses  received  will  be  available  in  the  Commission  website  unless  confidentiality  is 
specifically requested. 

As  a  follow  up  to  this  Green  Paper  and  on  the  basis  of  the  responses  received,  the 
Commission will identify, in spring 2013, the set of actions to be taken to complete the single 
market for parcels.  

28