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European Commission

MEMO

Brussels, 29 November 2012

Green Paper consultation on cross-border parcel delivery – frequently asked questions

1. Why is the European Commission adopting this Green Paper?

With this Green Paper, the Commission aims to support the development of e-Commerce by identifying policy options to improve cross-border parcel delivery.

E-commerce has tremendous potential to boost growth and create jobs.1 Companies that exploit the full potential of the Internet create more than twice as many jobs as companies that do not. In Europe, the EU Single Market for e-commerce is still not working as it should. This is due to a number of barriers, including problems with delivery systems which need to be addressed urgently. The European Commission's Communication on e-commerce and online services2, published in January 2012 (see IP/12/10), highlighted the fact that delivery systems are still inadequate for both businesses and end consumers3, and are particularly unsatisfactory when it comes to cross-border parcel delivery.4 The delivery market is currently failing to provide a basic reliable and affordable service for consumers buying online and the market is not adequately meeting the needs for delivery of e-retailers, notably SMEs.

2. Why are delivery services important for e-commerce?

Delivery is the final link in the e-commerce chain – goods bought online need to be physically delivered to the customer. So, accessible, affordable and high-quality delivery services are an essential element of the overall online purchasing experience of customers (senders as well as receivers). However, recent studies and consultations demonstrate that many customers are reluctant to purchase online, especially cross-border, because of uncertainties related to final delivery. In the EU, almost one in two consumers (47%) express concerns when it comes to making a cross-border transaction because of worries about delivery,5 and retailers are even more concerned (57%).6 The low level of integration of delivery operations, notably for cross-border sales, limits the growth potential of e-commerce. An efficient delivery (and return) system is key to facilitating further growth in e-commerce and therefore consumer choice and convenience.

3. What are the objectives of the public consultation and who can participate?

The initiative pursues two complementary objectives:

1) To identify ways to develop a seamless delivery process in the EU in order to support the growth of e-commerce, and

2) To ensure that e-commerce benefits are accessible to all citizens and SMEs across all regions in Europe via a sustainable and well-functioning delivery system.

Via the Green Paper, the Commission is launching an extensive consultation with stakeholders to collect information on the current state of the delivery markets for products bought online, and to identify any potential hurdles for the creation of an EU-wide integrated parcel delivery market. Furthermore, it would like to get stakeholders' views on how best to serve consumer interests. The Commission will evaluate the replies to the consultation and assess the need for policy initiatives to pave the way for an EU single market for delivery. The consultation is open to all parties and stakeholders interested in this issue. Virtually everyone who sends or receives parcels – and this is particularly relevant during the Christmas season – is affected by this initiative and therefore strongly encouraged to participate. Participants do not need to answer every question but can choose the issues that interest them.

4. What are the main areas that require improvement with regard to parcel delivery?

Three priority areas have been identified to address the problems and challenges faced by e-retailers and consumers in the EU:

1) "Convenience"/quality of service: Improving convenience of delivery services for consumers and SMEs across the EU. Consumers and retailers are worried about the delivery times, return procedures, possible damage sustained in the course of the delivery and lack of transparency (see question 5)

2) Prices/Cost-price relationships: Ensuring more cost-effective delivery solutions for consumers and SMEs. Prices are often significantly higher for individual senders than for companies sending large volumes. The delivery price charged by e-commerce sellers to consumers is on average twice as high for cross-border than for domestic deliveries.7

3) Interoperability: Promoting improved interoperability of delivery services between operators, and between operators and e-retailers, notably SMEs.

5. What are the main problems that consumers face with (cross-border) delivery in the context of online shopping?

Only 9%8 of EU consumers use cross-border e-commerce, while 47% of EU consumers say they worry about delivery in cross-border transactions.9 A study reveals that delivery concerns and concerns regarding returning products are the top two concerns of consumers when it comes to online shopping10. For cross-border online shoppers, long delivery time is the top concern (35%). High delivery costs are also an issue of concern. This is reflected in high prices for cross-border delivery in comparison to similar domestic services: It is much more expensive to send a parcel across borders; e.g. the price for sending a parcel from Aachen to Brussels is much higher than when sending the same parcel from Aachen to Munich, although the distance is shorter. Non-delivery and damage to products or lost items are also among the top concerns of consumers. Consumers want more convenient delivery, including more delivery options, more transparency of information about the delivery and the price, easier return procedures and user-friendly procedures. A 2009 Mystery shopping exercise on cross-border e-commerce revealed that the delivery time indicated for domestic offers was on average four days, compared to seven days for cross-border offers11.

6. What kind of problems and challenges do e-retailers face when it comes to cross-border delivery?

E-retailers want to respond to the needs and expectations of consumers, with simple, transparent, reliable shipping services12. However, cross-border delivery is considered to be an obstacle to cross-border sales by 57% of retailers.13 Another survey amongst eBay sellers in the UK, Germany and France revealed that 78% identify delivery costs as the main obstacle to cross-border e-commerce, while 42% refer to bad quality of delivery services. Studies identify issues such as higher delivery costs/prices, long delivery times, lack of information on the quality of delivery, complaint procedures, damaged or lost items, consumer rights and returns as relevant concerns14 for e-retailers. All these discourage companies, especially SMEs, from engaging in cross-border e-commerce. Against this background, e-retailers clearly need more options, (different offers and alternative delivery options), more flexibility from delivery services, and far more information and transparency from their delivery service providers. SMEs and micro-companies located in remoter areas or peripheral regions can only be sustainable if affordable and efficient delivery solutions are available.

Key facts and figures

  1. Only 9% of EU consumers use cross-border e-commerce, with big variations observed across Member States. The three most frequent users are Luxembourg (53%), Malta (35%) and Austria (29%), while the least frequent users are Bulgaria, Czech Republic, Poland (2%) and Romania (1%).15

  2. While 14% of all EU enterprises use cross-border e-commerce, there are big variations across Member States. 44% of enterprises in Austria do so while the figures for Luxembourg and Denmark are 41% and 33% respectively. On the other hand, the three Member States with the lowest level are Poland (6%), Romania (6%) and Bulgaria (5%).16

  3. Almost one in two European consumers said they are more confident in buying online domestically than cross-border17.

  4. Cross-border delivery is considered to be an obstacle by 57% of retailers18, while 47% of consumers say they worry about delivery in cross-border transactions.

  5. A report in France reveals that the top two barriers to cross-border shipping are the high cost of shipping (78%) and poor shipping services (42%), compared to 28% for lack of demand, or 12% for cultural differences19.

  6. A recent UK survey revealed that almost 65% of respondents said the risk of failed delivery (for example because nobody is at home to receive the item) would discourage them from shopping online. Delivery timeslots that are too broad or not precise enough and the risk that the item may not arrive on time are also a concern for about 43% of respondents. Another UK consumer survey indicates that the lack of delivery convenience discourages 43% from shopping online20.

  7. According to recent studies, cross-border parcel delivery prices charged to consumers are on average twice as high as for domestic deliveries21.

  8. In 2009, Forrester Consulting estimated the value of the e-commerce market in Europe to be between €100 billion and €150 billion a year.

  9. The EU parcel market was estimated to be worth €42.4 billion in 2008 with the Business to Consumers segment representing 15% of this market22.

7. How are delivery services regulated in the EU?

Delivery services are subject to a variety of rules and regulations. Under the Postal Services Directive all citizens of the EU have the right to basic postal services both domestically and cross-border, and this needs to be guaranteed by Member States. The majority of the Directive's rules, e.g. concerning the provision of a certain quality standard and principles concerning costs and prices, are linked to this universal services obligation (USO), which includes (in terms of volume) only a small percentage of "basic" parcels. The postal regulatory framework is therefore not designed to explicitly address the modern needs of consumers who buy online. Rules and regulations drawn from related sectors are applicable and/or can have an effect on the way shipping and delivery can be arranged. These include competition rules, consumer protection23, transport and logistics-related issues at EU and international level24, rules concerning urban planning, VAT, working conditions and customs.

8. What is the link between the Green Paper and other Commission initiatives?

The need for a Green Paper on parcel delivery was first identified in the European Commission's e-Commerce Communication of January 2012 (see IP/12/10), which responded directly to the request of the European Council of June 2011. More recently, the Single Market Act II communication and the European Parliament report on the Digital Single Market25 have both underlined the urgent need to address the concerns linked to delivery of parcels. The Green Paper is also closely linked to a number of on-going EU initiatives launched under the Europe 2020 strategy26 for growth & jobs, such as the 2009 Commission Communication on cross-border business-to-consumer e-commerce, and the implementation of the Digital Agenda for Europe. It complements related initiatives in the transport sector, such as the key policy initiatives set out in the Commission's White Paper "Roadmap to a Single European Transport Area", notably the e-freight initiative27, and the initiatives concerning the consumer protection framework.

9. Who will benefit from better-functioning delivery systems and how?

Consumers would very much welcome better delivery options that provide more accessible and clearer information regarding delivery options for products bought online, more convenient 'last miles' solutions to get their parcel, and more affordable tariffs - notably for cross-border deliveries. Better delivery options, whilst boosting the development of e-Commerce, will offer consumers a wider range of goods and services and lower prices, thanks in particular to online price and quality comparisons.

It will also be good for e-retailers. They will benefit from an EU-wide delivery system focusing on the specific needs of e-commerce, more innovation and greater transparency in the logistics chain. Both e-retailers and their customers would have greater choice between alternative delivery options that ideally would be:

  1. affordable (also for senders of small volumes),

  2. accessible (e.g. during working hours, in remote areas),

  3. reliable

  4. capable of meeting individual needs in terms of speed and transparency (e.g. traceability, performance, etc.).

Equally, large delivery operators (express integrators and large postal operators), would profit from the growth of e-commerce notably in terms of volumes. Smaller delivery operators (smaller postal and parcel operators, other logistics providers) who do not yet have a presence outside their domestic markets would additionally benefit from having the right framework for cross-border cooperation.

10. What are the next steps?

All stakeholders are invited to submit their contributions by 15 February 2013. Contributions will be published on the Commission's website, unless otherwise requested by the respondent. As a follow up to the Green Paper and on the basis of the responses received, the Commission will prepare a set of actions to be taken to complete the single market for parcels. These actions will be prepared with a view to providing solutions to help the development of a seamless delivery process in the EU which will in turn support the growth of e-commerce, create jobs, and ensure that the benefits of e-commerce are accessible to all citizens and SMEs across all regions of Europe. In order to attain these objectives, a strong commitment by all actors concerned is required. The Commission will take stock of the results achieved and identify any complementary measures to ensure that the conditions for integrated delivery are in place to support e-commerce growth and meet consumers' and customers' needs.

2 :

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

3 :

In this document, consumers in the context of e-Commerce mean on-line shoppers, e-retailers mean sellers. Both are customers and/or consumers of delivery services and as such include individuals as well as businesses.

4 :

See also FTI, Intra-community cross-border parcel delivery, A study for the European Commission, December 2011 and findings in the context of the of the Postal users forum, http://www.cc.cec/markt/intranet/index.cfm?action=page&id_page=2791

5 :

Eurobarometer, Consumer attitudes towards cross-border trade and consumer protection, Analytical Report, Flash Eurobarometer 299, March 2011. Chapter 2, Section 2.2, page 30.

6 :

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

7 :

FTI, Intra-community cross-border parcel delivery, A study for the European Commission, December 2011, page 178. A 2009 Mystery Shopping Evaluation reported that the average cost of shipping for domestic offers was €8 whereas for cross-border it was €16.

8 :

European Commission, Consumer Conditions Scoreboard, Consumers at home in the single market, 5th edition, March 2011. from figure 3, page 11.

9 :

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

10 :

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

11 :

Mystery Shopping Evaluation of Cross-Border e-commerce in the EU, conducted by YouGov Psychonomics on behalf of the EU, Health and Consumers Directorate general, October 2009. page 5

12 :

IPC Cross border E-commerce report 2010.

13 :

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

14 :

FTI, Intra-community cross-border parcel delivery, A study for the European Commission, December 2011,

15 :

Eurostat

16 :

Eurostat

17 :

Eurobarometer March 2011

18 :

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

19 :

eBay report

20 :

Consumer Focus research on consumer needs, November 2010

21 :

FTI (2011), Mystery Shopping Evaluation of Cross-Border e-commerce in the EU (2009).

22 :

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.

23 :

Notably the Consumer Rights Directive (CRD), The new Commission proposals on Alternative and Online Dispute Resolution (ADR) and ODR), adopted in November 2011 and The proposal for a Regulation on a Common European Sales Law (CESL) COM (2011) 635final 11.10.2011

24 :

For more information see e.g. Commission's White Paper "Roadmap to a Single European Transport Area" and the e-freight initiative 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

25 :

(2012/2030(INI)) recently voted to submit a roadmap for achieving an internal digital market by 2015

27 :

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


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