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Bonn, 22 February 2013

Response of Deutsche Post DHL to the Green Paper of the European Commission

“An integrated parcel delivery market for the growth of e-commerce”

of 29 November 2012

The e-commerce market is a relatively young and very dynamic market. Almost all European

countries have recorded high growth rates, although differentiated depending on local fea-

tures such as market maturity, broadband infrastructure and level of competitiveness. 43% of

European consumers made online purchases in 2011, compared with just 26% in 2006. The

market also grew impressively again in Germany in 2012 – by 27% – with a highly significant

contribution having been made by high-performance and competitive delivery services.

While the national growth of e-commerce has developed as planned, the EU Commission –

in its Green Paper – laments the low number of consumers making online purchases across

national borders. Just 10% of the population purchase items in other countries over the

Internet; a figure which falls well short of the target, set by the Commission itself, of 20% by

2015 (Digital Agenda, 2010). Noticeably, the low share of cross-border online shoppers is

primarily generated by highly-populated and large countries, such as Germany, France or

UK, which is only really surprising at first glance. The big e-retailers are nearly all repre-

sented “on site” in these countries and hold a range of goods in store at reasonable prices

within the country, covering nearly all customer requirements. In smaller countries, such as

Malta or Luxembourg, the share of the population shopping online across borders in contrast

is considerably higher, at 38% and 56% respectively, since the range of goods in their home

countries is naturally much smaller here.

Based on willingness to shop over the Internet in other countries, an interesting learning ef-

fect emerges. In terms of consumers who have already successfully made purchases over

the Internet in their home country, the share of those who have already had positive experi-

ences with online shopping abroad, at 24%, is considerably higher than the specified 10% of

the total population. Moreover, it can be observed that the share of cross-border online pur-

chases is considerably greater between countries which are more closely related due to a

common language or special cultural proximity without cross-border delivery being an obsta-

cle.

The growth in e-commerce has also resulted in more intense competition on delivery markets

in several countries. Postal operators which were originally restricted to the B2B segment are

now pressing ahead on the B2C market, such as UPS, DPD or GLS. In addition there are

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local competitors, such as Hermes in Germany, Yodel in UK, MRW in Spain, Selektvracht in

the Netherlands, or Bartolini in Italy. But traditional postal service providers are also making

considerable investments in expanding their capacities and infrastructures. New services and

solutions tailored to the e-commerce business are being developed and placed on the mar-

ket. This applies in particular to alternative and convenient delivery options and return solu-

tions. Such developments are far from complete.

Three central issues and objectives are at the heart of the Green Paper, convenience, costs

and interoperability, for which Deutsche Post DHL considers itself to be well-prepared:

1. Convenience: Greater convenience and transparency

Deutsche Post DHL has been facing up to the challenges and prospects of e-commerce

for years and, in addition to home delivery, offers a wide variety of delivery options

among which the recipient can choose. Mention should be made of delivery to 2,500

Packstations in Germany, to any requested postal outlet, to any specified neighbour, to a

secure location, or on a specific date. In addition there is a range of return solutions

which are so important for e-commerce both in respect of national for cross-border pur-

chases.

2. Costs: More cost-effective delivery solutions

Intensive competition on the German parcel market both domestic and cross-border has

an immediate impact on the price level of the parcel. Thus, for example, the parcel prices

of Deutsche Post DHL are among the lowest in Europe. One contributory factor here is

constituted by new delivery options, helping to reduce the number of unsuccessful deliv-

ery attempts and thereby delivery costs. On the other hand expansions in capacity and

new solutions require considerable investments in infrastructure, IT systems and proc-

esses, refinancing of which is imperative.

3. Interoperability: A greater level of interoperability and coordination.

A guarantee of a sufficient level of interoperability and interconnection is the purpose of

numerous projects, in which Deutsche Post DHL is cooperating with other postal service

providers, the International Post Corporation (IPC) and PostEurop. The goal is to create

the technical and operational conditions for attractive cross-border services. Examples

are improved track and trace solutions, quality monitoring and cooperation in the E-

Parcel Group (existing since 1996), which is directed at pan-European delivery with con-

tinuous shipment tracking, defined time targets and improved customer service.

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In summary it can be established that online commerce is growing dynamically and driv-

ing competition on the market for delivery services. Operators such as Deutsche Post

DHL are investing in infrastructure, products and innovative solutions. Online commerce

and consumers benefit from this. The market works properly and provides the desired re-

sults. This market dynamic should not be adversely affected by European regulatory in-

terventions. In the event of intervention being indispensable in individual cases, national

instruments are available for this under regulatory or competition law in each case.

The questions raised by the Green Paper are dealt with in detail below. Please note that the

text applies the term “parcel” as defined by the Green Paper; it can refer to letters, packages,

parcels and express shipments.

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1. For the purpose of this Green Paper, ‘parcel’ is defined in the broadest sense and in-

cludes items weighing up to 30 kg. Are there particular elements which in your 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 EU?

For the purpose of the green paper to inquire into the delivery of on-line purchases to the

consumer, the comparatively broad approach appears reasonable. However it should be

noted that service requirements and willingness to pay vary, depending on the nature and

value of the products to be dispatched.

For low-value products a demand exists for low-cost delivery services, in which special fea-

tures are usually dispensed with in favour of the lowest possible price. On the other hand

higher-value goods demand more secure services (track and trace, insurance, etc.). The

customer is willing to pay higher prices for these services, in line with the higher costs. Fi-

nally there is a demand for even higher-value delivery services, such as express services

(time window, same-day), which however play a rather subordinate role in terms of quantity

of online purchases in the B2C sector.

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/regulations?

If so, please specify.

Postal Directive

Growth in e-commerce and competition on parcel markets show that the Postal Directive

does not constitute an obstacle.

The Postal Directive provides a safety net for individuals and SMEs which probably oth-

erwise would not benefit from delivery offers designed for big e-retailers. Indeed, article 3

of the Directive 97/67/EC of 15 December 1997 on common rules for the development of

the internal market of Community postal services and the improvement of quality of ser-

vice provides that universal service includes notably “the clearance, sorting, transport and

distribution of postal packages up to 10 kilograms”. Universal services have to be pro-

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vided across the territory at affordable prices with sufficient access points and a fre-

quency of not less than 5 days a week. For prices, the principles of non-discrimination,

transparency and cost-orientation apply.

This article aims to facilitate cross-border exchanges of parcels:

“Notwithstanding the weight limit of universal service coverage for postal parcels estab-

lished by a given Member State, Member States shall ensure that postal parcels received

from other Member States and weighing up to 20 kilograms are delivered within their ter-

ritory”.

This provision ensures that all users in the EU, be they consumers or professionals, can

send to other countries of the EU, single piece or bulk parcels, for a maximum weight of

20kg, which will be delivered by the universal service operator of the country of destina-

tion, according to the same quality standards as a domestic parcel within the universal

service scope.

Therefore, the Postal Directive already provides for a European network of universal ser-

vice operators to facilitate exchanges of parcels between EU countries. No other regula-

tory provisions are required. In contrast, more regulation would inhibit market forces and

only restrict willingness to make investments in capacities, new technologies and new in-

novative services and solutions.

Customs

‐ With the adoption of the Modernised Customs Code in 2008, the EU committed to the

objective of creating a pan-European electronic customs environment, which is an

essential enabler for fast delivery of parcels. The proposal for a recast of this Code –

The Union Customs Code – currently under review by the Parliament and Member

States, risks undermining some of the most emblematic simplifications that were

originally foreseen such as centralised clearance, transit simplification by air, and the

principle of electronic declarations.

‐ The current state of EU customs policy actually restricts the development of e-

commerce, and urgently needs an overhaul and reaffirmation of the key principles

agreed upon in 2008. Customs formalities can vary considerably from Member State

to Member State with some offering simplified e-Customs solutions whilst others

maintain outdated paper-based processes which often cost more than the value of

the product being imported.

‐ This is completely at odds with the principles of the Customs Union. In today’s elec-

tronic world, most contractual documentation between the buyer and seller is deliv-

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ered electronically. Customs administrations should look to recognise such electronic

information exchanged between the buyer and seller including the invoice and con-

firmation of payment.

‐ Immediate release of goods: Key to facilitating e-commerce is a system of customs

clearance that embraces the technological world in which consumers and suppliers

operate, these would include:

o A need for immediate release of goods, i.e. fast and simple clearance proce-

dures, with littlest possible formalities.

o Keeping low costs through low administrative burdens during clearance (elec-

tronic exchange of data with customs).

o Taxes set at a realistic rate with the focus to achieve a balance between the

costs of assessing and collecting customs duty and the revenue raised.

o Modern payment facilities which make paying taxes as easy as paying the

seller for the product. The only real manual intervention should be the physical

inspection of high risk shipments. Everything else could be done remotely and

electronically.

‐ De Minimis: The EU has low de minimis levels. The current de minimis for duties is

€150, for VAT €22. By comparison(duties): Australia – €808; US – $200 (proposed

$800), Russia - €1,000 per month. In many cases it costs both the administration and

the shipper far more in administrative costs to collect duties than the actual amounts

of duties collected. Research undertaken in certain countries shows that a higher de

minimis level will reduce government cost, cut overall compliance costs, improve de-

livery times and encourage low value imports, especially direct purchases by con-

sumers and small businesses from foreign suppliers.

Transport

‐ Fully liberalise cabotage in road transport: The Internal Market for carriage of goods

on road should be fully completed. This will help to decrease the current 30% of

empty trucks running on European roads causing unnecessary greenhouse gas

emissions. The current national cabotage restrictions prevent transport operators

from using a lorry to its utmost efficiency and run optimised supply chains for the

benefit of European industry, including those active in the e-commerce sector. This

prevents road transport operators from reducing unnecessary congestion and pollu-

tion and creates inefficient logistics networks and leads to higher costs.

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‐ Enable efficient city logistics solutions: Congestion and inappropriate city access re-

striction schemes hinder the efficiency and effectiveness of express delivery in city

centres. The express sector therefore encourages measures that can facilitate city

delivery distribution and at the same time reduce congestion, costs and the environ-

mental impact of urban freight transport and improve road safety. This can be done

by enabling new delivery solutions put in place after thorough impact assessment and

with constant dialogue with all stakeholders including the express sector. Given the

importance of express delivery for the economic viability of inner-cities, such meas-

ures should improve the accessibility of, and mobility within city centres for express

delivery vans (for example, by allowing our vans to use bus, taxi and carpool lanes).

‐ Promote the use of European Modular Systems (EMS): The express sector has the

particularity to have significant frequencies and volume on a determined network, for

instance between air hub and road hub. The use of the European Modular System

(EMS) or Ecocombis (Longer Heavier Vehicles) for such hub to hub operations for in-

stance on suitable road infrastructure and on trans-border routes would have the ef-

fect of significantly reducing congestion, fossil fuel use, and exhaust gas emissions.

Cross-border as well as national trials should therefore be encouraged as a means to

clearly demonstrate the positive effects of EMS.

‐ Allow integrators to provide ground handling services to all aircraft dedicated to their

network: Integrators provide an integrated door-to-door express transportation ser-

vice. Ground handling of aircraft and cargo is an integral part of this service provision

and allowing integrators to handle all aircraft dedicated to their network will enable in-

tegrators to control all aspects of the service provision process.

‐ Night flight restrictions: The Green Paper often refers to customers’ requirements in

terms of speedy delivery of goods delivered on line. In this regard, it needs to be

borne in mind that cross-border next-day delivery services can only take place if the

goods are transported at night. Night flights play a critical role for cross-border deliv-

ery services, yet the number of restrictions on night flights tends to increase through-

out Europe. Therefore, the Commission should focus on a better application of the

“Balanced Approach to noise” as defined by the International Civil Aviation Organiza-

tion (ICAO) to ensure a rational process to address noise issues at local level.

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5. Information on delivery options and modalities

a) Which information should be made available to consumers on the e-retailer’s web-site

(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)?

b) Taking into account the risk of information overload, what could be done to provide con-

sumers at the right moment with clear, transparent and comparable information on deliv-

ery?

EU consumer protection regulations, the Services and E-Commerce Directives already con-

tain comprehensive provisions with regard to information requirements for e-retailers. In addi-

tion there are the provisions of the Consumer Rights Directive, adopted in 2011, which have

yet to be implemented in national law.

Beyond the existing information obligations, it should be left to the e-retailer to decide which

information to make available on its website, given that information forms part of its market-

ing concept. However increased transparency with regard to delivery is desirable, because

the growing diversity of delivery options makes the logistical process underlying e-commerce

increasingly important for the online customer and increases his need for information.

As a result the consumer should be informed by the e-retailer of which company is responsi-

ble for last-mile delivery, which service characteristics are available, such as track and trace,

and which delivery options he can select from. With the provision of the tracking number by

the e-retailer the consumer can trace his shipment via the Internet. In addition information is

provided on the handling of returns. The level of interest in the price of postal delivery on the

other hand is continually declining. If the e-retailer separately displays shipping costs on the

invoice, these are not necessarily related to actual delivery costs to be paid to the delivering

company by the e-retailer.

Moreover, information on the e-retailer location at which it can be contacted in the event of

any complaints is important to the consumer. This location should also apply to complaints

related to delivery. The contractual partner of the consumer is exclusively the e-retailer, not

the delivering company. The e-retailer is therefore also responsible to the consumer for the

acceptance of all complaints, even if they relate to delivery. In many cases the consumer

does not even know who provides the delivery service. The e-retailer shall then clarify com-

plaints about delivery with the delivering company and subsequently inform the consumer

accordingly.

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6. Information on the quality/performance of delivery

a) Performance indicators relate, for instance, to the speed of delivery, the geographic cov-

erage of the delivery operator, delays, damaged or lost items. How can such perform-

ance-related information be measured and gathered? Would publishing the results of

such performance indicators create added value for consumers? Is there a need to de-

velop standards to monitor such performance levels?

The contractual partner of the delivery operator is the e-retailer, not the consumer. Informa-

tion on performance and quality of the delivery operator is therefore primarily important to the

e-retailer. Deutsche Post DHL provides larger customers with individualised reports, most

business customers have access to standardised reports, individuals can always see the

performance of individual shipments using track-and-trace.

Quality measurement and reporting are necessarily proportionate to the service category

requested (see response to question 1). Unlike in the case of premium products with ship-

ment tracking (parcel, express), only general information can be provided for basic products

(small packets) without tracking and tracing, without reference to the individual item.

As far as the consumer ordering goods over the Internet is concerned, the quality of delivery

is only relevant to the extent in which it contributes to the quality of the overall supply proc-

ess. The period of time which elapses from the moment of placing the order until the time

when he receives the requested good is decisive for him in respect of delivery times.

It is therefore important to the consumer to be able to rely on the e-retailer and his delivery

commitments. These can deviate from the agreements with the delivery operator since they

do not only take into account transport but also the availability of the goods ordered, order

fulfilment and picking.

It is essential to a successful online shopping experience that the entire supply chain is right,

from the order process, through payment, to delivery and possible return shipments. This

includes the provision of relevant information at all times in the ordering and delivery proc-

ess. Consumers who have had good experience with online orders in this respect will also

make use of e-commerce in future.

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?

The reliability of the e-retailer matters to the consumer, including the overall supply chain, i.e.

in addition to delivery, ordering, payment, etc. Quality labels which confirm the performance

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and reliability of e-retailers throughout the entire process are therefore very helpful for the

consumer. Such quality labels exist in Germany for example with the bvh/EHI quality tested

online shop. Another example is the German based “trusted shops” label

(http://www.trustedshops.de/). They are active all over Europe providing a trust label for par-

ticipating web shops for e-consumers. Participating web shops (over 10,000) can use this

label for marketing purposes when fulfilling certain criteria and offer a reimbursement guaran-

tee to their customers.

For consumers it would be sufficient to know which company performs the last-mile delivery.

Typically, consumers have personal experience with the company from domestic parcels

delivered to them. This personal experience and opinion shapes the confidence, not some

trusted label that might not even be known by the consumers.

c) Would ISO certification of a quality process aiming at efficient delivery be an appropriate

tool to increase consumers' confidence?

Deutsche Post DHL has an ISO certification. The quality management of the entire domestic

operational processes is certified under ISO 9001. This also benefits international items as

soon and as long as they are in Deutsche Post DHL’s network. Consumers however are in-

terested in the delivery of their individual parcels and not in the details of the production and

management processes of the delivery company. The personal experience is typically much

more relevant in the quality perception than a certification.

7. Independent supervision:

Who should take the lead to monitor performance: an industry organisation, an independent

body, a regulator?

Performance monitoring must be a matter for postal operators. Postal operators measure

their quality on operational and competition grounds. Monitoring allows the operator to iden-

tify and correct weaknesses. At the same time the operator is responsible to its client, the e-

retailer, for its actual performance. If such undertakings to the client are not adhered to, the

operator loses business to rivals. Defective performance is sanctioned by the market. As a

result no “independent supervision” is required.

The industrial platform IPC measures the quality of cross-border services for Deutsche Post

DHL and other national postal operators. IPC conducts measurements for a whole range of

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products, on untracked items such as small packets and tracked items, parcels, registered

mail or EMS. On the one hand end-to-end measurements are conducted from posting the

parcel until its delivery from the perspective of the e-retailer as the contractual partner of the

operator. At the same time each connection in the logistics chain is also measured. Opera-

tors can thereby identify weaknesses and make improvements where appropriate. Missing

quality targets regarding delivery times and where appropriate the provision of track and

trace data are penalised by reduced compensation. Customers can therefore rely on a con-

stant high quality level.

As regards express companies they can, due to the nature of door-to-door services, regularly

measure end-to-end performance and provide individual reports to their customers. This in-

formation is always provided to the contract partner only. He decides if and to which extent

performance data will be forwarded to its end consumers.

As far as the consumer ordering goods over the Internet is concerned, the quality of delivery

is only relevant to the extent in which it contributes to the quality of the overall supply proc-

ess. The period of time which elapses from the moment of placing the order until the time

when he receives the requested good is decisive for him in respect of delivery times.

See also answer to question 6a).

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

a) Is there a need for a new universal service obligation to address the ubiquity, affordability

and quality of parcel delivery services?

b) If so, what could be the main characteristics of this 'new' universal service (in terms of

service levels, convenience and affordability)?

c) 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)?

There is no need to define a new universal service for parcel services. On the contrary, a

new European universal service requirement for delivery services would result in the market

dynamic being endangered in countries with intensive competition. In markets without such

potential a “prescribed” universal service would not help the growth of e-commerce. Only

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individual, local solutions can be considered here in the event of shortfalls in delivery actually

inhibiting the growth of e-commerce.

The universal service constitutes a regulatory concept which was developed at the start of

the 1990s and serves as a balance between market liberalisation and basic provision of

postal services. In particular it is intended to guarantee that consumers and small shippers

are given nationwide access to postal services at affordable prices. The concept of the uni-

versal service is therefore directed at ensuring an essential minimum provision. However it is

not an appropriate concept for opening up or developing new markets, such as e-commerce

in this case.

The requirements of the Postal Directive for the universal service, in addition to letter ser-

vices, also specifically include parcel services. This means the Member States must ensure

that the universal service covers at least the conveying of postal items weighing up to 2kg

and parcel services up to 10kg or 20kg, as well as services for registered and insured items.

9. Improving consumer experience

a) Taking into account the existing set of consumer rights, how could consumer concerns

and complaints about delivery be addressed most effectively?

It would be helpful if contact details in case of concerns or complaints of the consumer in

relation to delivery should be made available to the e-consumer on the e-retailer’s web-site.

Contact point needs to be the e-retailer, not the operator (see response to question 5).

One example of an efficient, customer-friendly solution in case of queries concerning cross-

border delivery services is the IPC “Customer Care System”, which interlinks the customer

service call centres of 175 postal operators. If, for example, a German shipper makes a com-

plaint to the Deutsche Post DHL hotline about the fact that a parcel dispatched in country X

has not yet arrived, Deutsche Post DHL Complaint Management can forward the query in

standardised form (with parcel number, etc.) to the postal service provider in X. The result of

the investigation is then relayed back to Deutsche Post DHL. The customer then receives the

reply from the Deutsche Post DHL call centre. This service is available for all traceable ship-

ments, e.g. bar-coded items.

The integrators proceed the same way. For instance DHL Express interconnects call centres

in 220 countries to ensure their clients have an optimal access to information.

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b) Do you have any concerns about liability regimes in the event of lost or damaged par-

cels? What could be done to improve the situation?

The delivery operator is the contractual partner of the e-retailer, not the consumer. The deliv-

ery operator is liable to the e-retailer in compliance with contractual provisions.

c) Could the e-commerce industry and delivery operators come up with more proactive solu-

tions 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?

As a result of the growth in e-commerce and competition in delivery services it is in the com-

mercial interest of postal service providers to improve their services in order to meet the ex-

pectations and needs of customers for new and attractive solutions. The e-retailer will select

the or those delivery service provider(s) which – in addition to an attractive price and appro-

priate quality for delivery – is/are most suited to ensuring the satisfaction of its customers, i.e.

the e-consumer. In particular, operators which can offer alternative and flexible delivery op-

tions for the last mile, in compliance with consumer requirements, as well as simple return

solutions, have a competitive advantage. Many postal operators in Europe, and not least

Deutsche Post DHL, were therefore quick to develop innovative solutions and place them on

the market.

For example Deutsche Post DHL, in addition to home delivery, offers delivery to a Packsta-

tion or a requested postal outlet; recipients therefore have a wide choice of delivery options.

Germany now has a network of around 2,500 Packstations available, where recipients can

pick up their parcels 24 hours, seven days a week. Contract partners shipping from abroad

can deliver into Packstations in Germany too. An SMS or e-mail informs them as soon as

their shipment has been delivered. Recipients can also select the post office that is most

convenient for them to reach and have their parcels delivered there. This may be a postal

outlet near their place of work, on the way home or even where they are on holiday. Further

options for delivery concern the selection of a specific delivery date or delivery to a secure

location or to a specified neighbour (see also response to question 10).

Some of these domestic delivery options are also available internationally. The currently built

up “Easy Collect Solution” will allow for delivery to retail points, postal outlets or lockers, also

for cross-border online purchases. After notification by SMS or e-mail consumers can pick up

the shipment whenever it is most convenient for them. For now, this service is rarely offered

cross-border, because e-retailers would need to maintain several databases for different

countries with the available retail outlets in other countries. At the request of several postal

operators the IPC set up a project in 2012 to create a central information hub where the dif-

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ferent national databases on retail outlets are consolidated and made accessible to the par-

ticipating operators. An e-retailer will just need one interface to his domestic postal operator

to also access foreign retail points directly. The service is to be launched at the end of 2013.

Innovative solutions have also been initiated for returns. Until 2009 there was no simple re-

turns process for cross-border e-commerce. At Deutsche Post DHL’s initiative and based on

its pilot with Austria the IPC set up the Easy Return Solution (ERS) which was launched in

2010 and has been successfully implemented by 17 postal operators. The ERS enables

posts to offer distance sellers a priority postage-paid international return service for their cus-

tomers. Whenever a consumer wants to return a product cross-border the distant seller pro-

vides the e-customer with a pre-paid return label. All the e-customer needs to do is to drop

the unwanted purchase at a post office together with the dedicated ERS label provided by

the e-seller. It is planned to have all European EPG-members on board by 2014.

The availability of innovative solutions and delivery options on the part of delivery operators

alone is not yet sufficient for them to be successful on the market. In fact it is imperative that

they are also offered to consumers placing orders by e-retailers. Ideally this can be carried

out by integrating the options into the e-retailer’s website.

10. Different options could be envisaged to control costs:

a) Are there any outstanding examples of, or best practices for alternative delivery solutions

allowing for a reduction of costs?

b) Are there any outstanding examples of best practices to increase efficiency?

c) 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 risk?

Delivery service providers in Germany and other European countries have developed a vari-

ety of innovative delivery solutions for domestic and cross-border delivery and placed them

on the market. This means they comply with the demand of consumers, who expect high

flexibility for receiving their products ordered online. Consumers want to have the choice of

how, when and where they receive their parcels.

Whether a consumer is satisfied with his online retailer essentially depends on several fac-

tors, including the successful delivery of his purchases. As far as online retailers are con-

cerned, when selecting the operator to deliver their goods, importance is increasingly placed

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not only on the price and quality of the delivery service, but also on the availability of flexible

delivery options. This means flexible delivery options are becoming an important competitive

criterion with regard to customer satisfaction, both for online retailers and for delivery service

providers.

By means of home delivery, delivery to Packstations and postal outlets, Deutsche Post DHL

offers a wide range of delivery options to satisfy customer requirements.

Delivery to a DHL Packstation

Recipients can pick up their parcels seven days a week at approximately 2,500 Packstations

throughout Germany. An SMS or e-mail informs customers as soon as their shipment has

been delivered. The parcels remain ready for pickup for nine days. Packstations can also be

used for returning goods.

Delivery to a postal outlet

Customers can select the postal outlet that is nearest and most convenient for them to reach

and have parcels delivered there. This might be a postal outlet near their place of work, on

the way home or even where they are on holiday.

The “Easy Collect Solution” will also allow for the use of alternative delivery options for cross-

border purchases in future (see response to question 9).

Home delivery

In the case of home delivery, Deutsche Post DHL offers various solutions which meet the

requirements of consumers, while at the same time improving the success rate of the first

delivery attempt. They therefore contribute both to cost optimisation and to improving con-

venience for the consumer. The following solutions should be mentioned in this respect:

- Delivery with parcel notification:

Before a shipment is delivered, customers receive a free SMS or e-mail notification

about the planned delivery date

- Delivery on a requested date:

Upon request, customers can postpone the announced delivery by up to four working

days until their requested date

- Delivery to a specified location:

If customers specify a location on their own premises, the parcel will be placed there

if they are unable to accept delivery themselves

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- Delivery to a specified neighbour:

Parcels can automatically be delivered to a specified neighbour if customers are not

at home

In order to really comply with customer requirements for increased convenience in delivery,

e-retailers must make information about the delivery service provider used and therefore

about the delivery options offered available on their website (see response to question 5).

This creates the opportunity for the customers to select the optimal solution for them. At the

same time failed delivery attempts can be avoided for the delivery operator.

However, flexible delivery options do not only comply with customer requirements, but also

contribute to the optimisation of delivery costs. However, they also require considerable in-

vestment (e.g. for the implementation and maintenance of Packstations and new IT systems,

and for new processes).

To cope with the tremendous growth of e-commerce Deutsche Post DHL set up a new parcel

concept in 2012. It includes investments of more than EUR 750 million by 2015 into the par-

cel network in order to become more efficient, faster and more flexible. The overall objective

is to boost efficiency in particular with

Faster transit times:

Parcels as fast as letter mail

Later pick-up:

Extension of last possible pick-up time at the e-retailer in individual cases

Complete transparency:

Shipment information in real-time

More flexibility:

- Select requested day, requested location and requested recipient

- Spontaneous rerouting being planned

Increased efficiency:

Higher CO2 efficiency dividing up the delivery districts and optimised route planning.

Since 2011, the sorting capacity has been increased in roughly half of the parcel centres to

28,000 shipments per hour – with up to 30,000 shipments per hour possible in peak periods.

This represents an increase in productivity of up to 40%.

This productivity increase is not enough yet, however, to cope with the volume of parcels

forecast for the coming decade from the booming distance trade. For this reason, sites with a

sorting capacity of 40,000 shipments per hour will be established as part of the new opera-

- 17 -

tions concept. The necessary renovation activities were successfully launched at the Feucht

site and the construction will be completed in 2013.

Another important component of the new parcel concept is the construction of an automated

distribution basis that allows for more flexible processing of parcel volumes. The Braun-

schweig site is online since the end of 2012. Essential IT systems have already successfully

gone live as parts of the future IT architecture for parcel operations.

11. Sustainability of tariffs:

a) 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?

In the discussion about delivery prices a distinction must be made between different contrac-

tual relationships when ordering goods over the Internet. The contractual partner for the de-

livery service is the e-retailer and not the consumer placing the order. The tariff for home

delivery is also invoiced accordingly by the delivery operator to the e-retailer, and not to the

consumer. However, a contract on delivery of goods is entered into between the consumer

and the e-retailer.

It is exclusively a matter for the e-retailer whether and to what extent it separately displays

shipping costs on the invoice to the consumer placing the order. An increasing number of e-

retailers are now moving over to “free shipping”, i.e. they no longer separately display the

delivery charges on the invoice. As a result delivery costs increasingly no longer play a sig-

nificant role for the consumer. Instead, convenience – i.e. the availability of innovative and

convenient delivery solutions –, and quality are important as far as he is concerned.

In addition to home delivery, which continues to be highly important to the consumer, innova-

tive and flexible delivery solutions are increasingly in demand. Deutsche Post DHL is meet-

ing this demand and today maintains a network of 2,500 Packstations for example, which

allows 90% of German citizens to reach a Packstation within 10 minutes. But customers also

have the option of arranging for their parcels to be delivered to a specified Deutsche Post

outlet (requested postal outlet) or another selected location. In addition there is the option of

selecting the delivery date for home delivery. Unsuccessful delivery attempts are thereby

avoided and costs saved.

E-retailers essentially have access to different prices and conditions than private customers,

who just send individual shipments at the single piece price, by virtue of their high volume of

- 18 -

shipments. Deutsche Post DHL also offers favourable conditions to SMEs with smaller ship-

ment quantities (see response to question 14).

In the overall e-commerce market the C2X segment reveals only a relatively low volume.

However, due to the universal service, with its principle of an affordable price, its special pro-

tection is ensured.

Dynamic trends in conjunction with high growth rates emphasise the attractiveness of e-

commerce and the parcel business. The market is demonstrating that it is capable of gener-

ating new solutions and innovative services in a competitive environment, in addition to tradi-

tional home delivery. As a result, regulation should not restrict the market in continuously

responding and adjusting to relevant requirements.

b) Should the actual cost of delivery incurred by e-retailers be made more transparent to

consumers? If so why?

No. It is not clear why any individual component of the logistical value-added chain, unlike

other inputs such as advertising, picking, etc., should be made transparent in a particular

way. As shown in the response to question 11 a), the significance of actual delivery costs is

increasingly taking a back seat. The end price (including delivery) is primarily of interest to

the online customer.

c) Should the true costs of delivery to society at large be made more transparent? If so

why? And how?

Deutsche Post DHL reports annually, in its sustainability report, on developments and results

of its GOGREEN environmental program. The program is focussed on reducing the biggest

impact of our business activity on the environment, CO2 emissions. Specifically, a target was

set in 2008 of increasing CO2 efficiency 30% by 2020, in comparison with the base year of

2007. Already in 2011, and therefore one year ahead of plan, the company reached its in-

terim target of a 10% improvement. Through GOGREEN products and services, Deutsche

Post DHL also supports its customers in achieving their own environmental targets. GO-

GREEN represents a CO2-neutral shipping option. The program provides for all transport-

related emissions to first be calculated and then offset by external climate protection projects.

The calculation and offsetting process for GOGREEN is verified annually based on the

ISO14064 standard, by Société Générale de Surveillance, an independent audit company.

- 19 -

The report on corporate responsibility (in German) can be found at: http://www.dp-

dhl.com/content/dam/dpdhl/verantwortung/Bericht-zur-Unternehmensverantwortung-

2011.pdf.

The IPC also reports annually on trends and results within the scope of the Environmental

Measurement and Monitoring System (EMMS), which began in 2008. 25 operators around

the world currently participate in this program, 18 of which are European operators, including

Deutsche Post DHL. The EMMS system measures both the management proficiency as well

as the actual carbon emissions. All reported results are third party audited. The report is

available at: http://sustainability.ipc.be

12. Level of competition in delivery markets:

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

The German parcel market is subject to distinctly intensive competition. This relates both to

domestic services and to import and export. All the major European providers operate on the

German market, e.g. UPS, DPD and GLS. The huge growth potential has caused these

companies, which were initially largely present in the B2B segment, to also get involved in

the B2C segment now. Hermes represents another large parcel service provider operating in

Germany, which, with around 14,000 parcel shops, maintains the largest network, alongside

Deutsche Post DHL.

All parcel service providers have expanded their networks in recent years. DPD for example

has increased the number of its own shops 700% since 2006, to around 4,000 today, GLS by

43% to 5,000. UPS plans to have a network of some 4,000 locations by next year. Deutsche

Post DHL’s competitors have increased their access to private customers through these

measures. This enables these players to offer e.g. competitive return services for the e-

commerce market.

With further investments in sorting centres most competitors also increased their quality in

Germany. DPD has built 9 new facilities since 2010. UPS is currently extending its biggest

German hub in Cologne. Hermes has built 2 new hubs since 2011 and extended capacity in

18 sorting centres. GLS opened 5 new hubs since 2010.

New e-commerce services are another proof of increased intensity in the German parcel

market. DPD has implemented new track and trace and predict services since 2010, now

offering flexible delivery time slots for 2C delivery. UPS has improved its return services to

better meet e-commerce requirements. Hermes has improved its track and trace systems

- 20 -

and now offers real time track and trace. It also offers shop delivery which is similar to the

Packstations of Deutsche Post DHL.

Even if the intensity of competition is not at comparably high level in all European countries,

competition is increasingly developing everywhere. DPD, GLS and UPS offer B2C solutions

in almost all countries, and regular reports are compiled on intermediaries with new drop

points and parcel lockers. The competitive pressure can be considered a main influencing

factor regarding the price levels for B2C deliveries. However, the price levels are also influ-

enced by a number of other factors, like size of the country, landform (mountains, islands),

population density, wage levels, union power, general traffic infrastructure, degree of auto-

mation of the postal operator. These factors can imply barriers to entry thereby limiting the

number of competitors for whom operating in the specific country is attractive. In the event of

restraints of trade or market foreclosures causing a lack of competition, effective instruments

are available locally under regulatory or competition law in each case, with which remedial

action can be taken.

b) Publishing price comparisons would provide more clarity to consumers and SMEs. How

could this be done? What would be the pro and cons?

Deutsche Post DHL prices for private customers and smaller business customers, who de-

mand shipments at single piece prices, are available on the company website. Furthermore,

there are price comparisons for domestic and cross-border parcel services in Germany, such

as the Posttip website. In the event of higher quantities of parcels being delivered, customers

obtain offers from various providers.

Prices payable by e-retailers are based on business customer contracts, usually relating to

the individual traffic profile of parcels to be dispatched (volume, terms, destinations, weights,

etc.). They cannot therefore be compared in published reviews.

- 21 -

13. Oversight and regulation:

Ex ante regulatory measures (such as transparency obligations, obligations to provide ac-

cess to delivery networks, and obligation for tariffs to be cost oriented, etc.) imposed on de-

livery operators with significant market power can lead to more competitive markets.

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

The German market is subject to very intense competition. This relates to all services: pack-

ets, parcels and express, domestic and cross-border, private and business customers (see

response to question 12).

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

Please specify.

In Germany, Deutsche Post DHL operates 33 parcel hubs and six international hubs, includ-

ing the International Postal Centre in Frankfurt where all airborne cross-border streams are

consolidated.

The production process

Our comprehensive network assures a smooth flowwhen transporting parcels

• 33 parcel centers are used every year for the production of867 million shipments a year (2-level sorting process)

• Parcel centers are linked to one another by national main leg

– Each night, an average of around 3,000 swap bodiesare on their way

– Each day, a total of more than 1,000 transport routesis linked to one another by over 600,000 kilometers travelled

• Parcel deliveries take place on 6 working days, including Saturdays, in a dense delivery network

• Parcel deliveries in rural districts take place together with letter mail deliveries, to ensure high quality

The assumption that prices for cross-border parcel delivery are too high by comparison with

domestic delivery is generally based on a misunderstanding. It assumes that shipments are

- 22 -

conveyed in a point-to-point method and the price is calculated accordingly exclusively based

on the direct distance between the sender and recipient. In fact, however, parcel networks

feature a hub-and-spokes structure, i.e. transport routes are assigned in a radial shape to

central hubs. This widespread structure in the transport system only facilitates economic op-

eration.

Parcel Networks in Europe, including the integrated parcel and express networks such as

DPD, GLS, UPS, DHL and TNT are defined along national boundaries. This is because the

vast majority of parcels are moving within a country. Conveyance processes and IT infra-

structures are therefore primarily characterised by historically-evolved national operation.

This may result in adjustments having to be made to IT interfaces or labels in cross-border

operations. The introduction of European standards could produce simplifications here.

However, these would not be economically viable due to the considerable costs of conver-

sion of national systems.

In general the process for cross-border parcel conveyance includes two additional process

steps by comparison with national conveyance, as shown by the following diagram:

Process steps in parcel production

Compared to the domestic B2C production process, the international process includes two additional steps

Domestic process

Delivery depot

Pick-up ordelivery address

Sorting hub

Pick-up tour1

Consolidation2

Domestic Linehaul3

Distribution 4

Delivery 5

International process

Pick-up tour1

Consolidation2

Distribution 6

Delivery 7

DomesticLinehaul3

Internat.Linehaul4

DomesticLinehaul5

Productionlevel

The international parcel production process typically has more process steps

than a purely domestic process

- 23 -

c) Should the regulator have more information on cost accounting data of operators to bet-

ter assess the cost-price structure of packets and parcels?

No. See response to a).

d) Should regulators and/or competition authorities play a more active role in overseeing the

national markets or market segments concerned?

No. See response to a).

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?

As already set out with regard to question 12, the German parcel market is characterised by

highly intensive competition. Competition has also become more intensive in many other

European countries and this trend is still in full swing. Price setting and assurance of the

necessary transparency should therefore be left to the market.

The competitive situation has not developed to the same extent in all European countries,

depending on the features of the country, region or market segment. Nevertheless, access at

affordable prices is assured via the universal service even in cases of insufficient competi-

tion. In any event, by means of the universal service requirements set out in the Postal Direc-

tive, a set of instruments exists, in addition to general competition law, through which trans-

parent, cost-based and non-discriminatory prices can be enforced.

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

sumers?

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?

In the discussion of delivery prices a distinction must be made between different contractual

relationships when ordering goods over the Internet. The contractual partner for the delivery

service is the e-retailer and not the consumer placing the order. The tariff for home delivery is

- 24 -

invoiced accordingly by the delivery operator to the e-retailer, and not to the consumer. How-

ever, a contract is entered into between the consumer and e-retailer for delivery of goods.

It is exclusively a matter for the e-retailer whether and to what extent it separately displays

shipping costs on the invoice to the consumer placing the order. E-retailers are increasingly

moving over to “free shipping”, i.e. they no longer separately display delivery charges on the

invoice. As far as the consumer is concerned, delivery costs increasingly no longer play a

significant role as a result. Instead, convenience – i.e. the availability of innovative and com-

fortable delivery solutions – and quality are important to him.

It is a fact that larger e-retailers have access to lower prices for the delivery service as a re-

sult of their higher shipment volumes. Yet SMEs do not usually pay prices for individual ship-

ments either, but work on the basis of a business customer contract. Deutsche Post DHL

already offers its customers a business customer contract, with appropriate prices, from a

volume of just 300 parcels a year (national and international). 300 parcels a year signify less

than one sales event a day. Starting from 100 cross-border parcels, prices are calculated

individually, in accordance with demand (e.g. based on destination). Even without a business

customer contract, discounts of up to 30% are achievable on the single piece price when

buying sets of parcel stamps. For Express individual pricing is already available for no more

than 50 cross-border shipments per year.

In the overall e-commerce market the C2X segment reveals only a relatively low volume.

Shipping by consumers or single piece shipments are no driver for cross-border e-

commerce. E-retailers essentially have access to different prices and conditions including

SMEs with small shipment quantities (see above).

Regulatory interventions in markets functioning as described above would sensitively disrupt

the market dynamic which has been observed for some time. E-commerce is particularly reli-

ant on healthy, profitable and innovative delivery markets. Growth requires adjustments in

delivery capacities, and innovations assume new processes and IT infrastructures. Overall

considerable investments need to be made, which are only conducted if they can be refi-

nanced. In a market environment, which as in Germany is characterised by significant com-

petition, there is a considerable risk that regulatory price interventions will have a direct im-

pact on working conditions, because personnel costs represent the largest share of delivery

costs. However, the challenges of dynamically growing e-commerce can only be successfully

overcome if satisfactory working conditions can be ensured for the employees of delivery

operators.

- 25 -

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 rele-

vant parameters to take into account?

b) What specific pilot projects for delivery of e-commerce products could be promoted, pos-

sibly within broader programmes aimed at fostering investment in information and com-

munication technologies?

We are not sure what is meant by a “generalised track and trace system for parcels”. In fact

both national and cross-border track and trace services and solutions are on the market in all

European countries. All “interconnected parcel networks”, i.e. bi- or multilateral cooperation

schemes for parcel services as well as the integrated parcel and express networks (such as

DPD, GLS, UPS, TNT or DHL Express) operate seamless track and trace services.

If the question is seen in terms of what it would cost if a common standard were employed

for all interconnected networks, the following conclusions can be drawn: track and trace sys-

tems differ considerably, e.g. in respect of the complexity of the operational process to be

tracked, number of events and location, service levels (real time, near-real time), tagging

modes (barcodes, RFiD) and tracking modes (automated, mechanised, manual).

Given the variety of track and trace systems, the costs of “a generalised track and trace sys-

tem” would then logically be the costs involved in adapting the existing systems to the one

new standard, including required changes in operations. These costs can hardly be esti-

mated, but will be quite significant in total. As a result the question about costs must also

imply the question about effective benefit.

In any case there is a global UPU Standard for postal operators, the latest version of which

(EMSEVT v3) supports all traceable postal products and allows for tracking of a broad variety

of events including item presented to/held by/returned from export/import, Customs/Security,

item to domestic sorting centre and alternative types of delivery such as delivery depot or

pack-station/locker for customer pick up. As a result it is primarily imperative to create incen-

tives for general use of the standard in the required quality. This takes place for example in

the cooperation of postal service providers in IPC within the scope of the E-Parcel Group.

- 26 -

16. Partnerships and cooperation:

a) 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?

It is in the special interest of postal service providers that the interfaces to e-retailers, as their

clients, operate properly and smoothly. It is therefore in the service provider’s own commer-

cial interest to enhance interfaces in respect of new technical possibilities. The focus here is

on reducing complexity for the customer and designing interfaces as simply as possible.

As an example of simplifications at the client interface, in particular for SMEs, mention should

be made of Deutsche Post DHL’s BUSINESS CUSTOMER PORTAL. The portal offers one

central access to all DHL services for convenient shipment preparation, collection and ship-

ment tracking. Customers no longer need several tools and logins for different IT-applications

such as labelling and tracking.

The DHL DEVELOPER PORTAL allows customers and external software developers to

quickly and easily connect with DHL applications. The provided interface documentation, test

systems and templates help customers and developers to quickly and easily integrate DHL

applications like DHL shipping software, DHL Online franking and MeinPaket.de into their

own software.

Deutsche Post DHL also provides fulfilment services. E-retailers can have their key e-

commerce process professionally executed, from incoming orders to delivery all the way to

returns management. E-retailers and their customers benefit from especially fast delivery.

Orders are generally processed in the warehouse on the same day and are delivered to cus-

tomers within Germany next day. The combination of logistics and merchandise manage-

ment is flexible and efficient, and ensures central management of the product line but also

complete order control, automated across all sales channels.

b) Should contingency capacities be jointly developed to deal with peak periods? If yes, how

could this be done?

If peak periods mean occasions such as Christmas and New Year, joint capacities by service

providers can hardly be of assistance, since all are equally affected by peak quantities. In

any case dealing with peak periods forms part of the normal business operation of service

providers. It is usual for large consignors and their delivery operators to agree on upcoming

large shipment quantities.

- 27 -

c) 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?

Deutsche Post DHL is a logistics provider.

17. Better interconnection:

a) Could logistics platforms for groups of operators better meet the needs of e-retailers? If

yes, how?

There are already various platforms and cooperation schemes for delivery operators in

Europe, in which a distinction is made between integrated and interconnected networks.

DPD, GLS, UPS, TNT or DHL Express should be mentioned as integrated and competing

European parcel and express networks. They used to primarily operate in the B2B segment,

but these operators are getting increasingly and more intensely involved in B2C business. In

addition to these integrated networks there are interconnected parcel networks, i.e. multilat-

eral and bilateral cooperation schemes. National Postal Operators cooperate with one an-

other here or network with other delivery operators, which in turn may be an integrated ser-

vice provider (above) or local provider.

Finally there is the “international letter mail network”, which for example serves the cross-

border exchange of small parcels (non registered items up to 2 kg) of the National Postal

Operators. These packet services are usually subject to the universal service.

As a technical platform the IPC plays an important role in cooperation between postal service

providers. It forms the basis for a large number of projects in the technical and operational

sector and for the E-Parcel Group. This group provides a cross-border network for a high-

quality delivery service in Europe, with competitive prices, track and trace information on the

basis of UPU barcodes, high delivery quality and outstanding responsiveness to customer

queries. The EPG infrastructure covers all 27 Member States of the EU (with the exemption

of Romania, Bulgaria and Cyprus). Most National Postal Operators are members of the IPC.

However, non-members can also use their services in return for payment.

There are also IT service providers offering integrated IT systems for labelling and tracking

including labels of most European parcel logistic companies like DHL, DPD, GLS, Hermes,

UPS or postal operators. Retailers have simple access to all relevant delivery partners.

It is primarily the dynamic of e-commerce and competition on delivery markets which pro-

mote the generation of common platforms and cooperation schemes. However, creation and

- 28 -

participation must be left to the market participants. Common interests form the optimal basis

for appropriate financing, market-compliant technologies and the level of logistical integra-

tion. Common platforms cannot be “prescribed”. This would contradict the market dynamic of

e-commerce and the associated delivery. Cooperation schemes must be flexible and optional

in a competitive environment.

b) Could an industry task force contribute to promoting innovation and increasing the use of

new technologies to facilitate greater level of interconnection? If so, how?

As shown, the IPC performs the function of an industry supporter. Many of the National

Postal Operators are members of the IPC, but it is also accessible to non-members, which

can use individual services of the IPC.

The IPC offers operational and IT-based services, deals with monitoring and improvement of

service quality, facilitates technical cooperation between postal operators, and supports ini-

tiatives for innovative and intelligent solutions based on new technologies.

PostEurop offers national postal operators of all 27 member states a platform for co-

operation, exchange of best practices and support for quality improvement.

c) Should the processes used to return goods (both domestically and cross border be im-

proved? If so, how?

Easy Return Solution (ERS)

Until 2009 there was no simple returns process for cross-border e-commerce. At Deutsche

Post DHL’s initiative and based on Deutsche Post DHL’s pilot with Austria the IPC set up the

Easy Return Solution (ERS) which was launched in 2010 and has been successfully imple-

mented by 17 postal operators.

The ERS enables posts to offer distance sellers a priority postage-paid international return

service for their customers. Whenever a consumer wants to return a product cross-border

the distant seller provides the e-customer with a pre-paid return label. All the e-customer

needs to do is to drop the unwanted purchase at a post office together with the dedicated

ERS label provided by the e-seller. Returns can be tracked online from label generation to

final delivery. It is planned to have all European EPG-members on board by 2014. Whenever

possible, Deutsche Post DHL uses the ERS for its DHL Retoure International; other countries

are covered by bilateral solutions.

- 29 -

k

For domestic services Deutsche Post DHL offers a similar return solution to German e-

retailers.

International Business Reply Service (IBRS)

The international business reply service is dedicated to supporting e-commerce services in

certain countries1. Once created for international direct marketing (i.e. for greater response

to a special campaign or a survey) up to 50g it’s now used for returning goods (low value) up

to 2kg at a favourable price. Customer friendly, convenient and easy to use but without trac

and trace or any liability.

d) Are interoperability requirements and the promotion of new technologies difficult for

SMEs operating in the delivery chain? What actions could help mitigate such difficulties?

Not a question for Deutsche Post DHL.

e) What are (if any) the main three actions which could improve interoperability across EU

borders for moving goods ordered online? 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?

The market has accepted the challenges of e-commerce and set up numerous projects, as

shown. This process is being continued. The factors in its success are the continued in-

volvement of delivery service providers and their cooperation in the enhancement of cross-

border solutions.

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 promoted? How to involve both e-

commerce and delivery industry associations?

E-commerce still represents a young market with great potential, which is currently going

through dramatic developments. Like other postal service providers, Deutsche Post DHL is

making great efforts and provides high-performance and innovative delivery services, both

1 Belgium, Denmark, Estonia, Finland, France, Greece, UK, Ireland, Iceland, Italy, Latvia, Lithuania,

Luxembourg, Netherlands, Norway, Austria, Poland, Portugal, Romania, Sweden, Switzerland, Slo-vakia, Slovenia, Spain, Czech Rep, Hungary

- 30 -

nationally and across borders, as a partner of e-retailers. Considerable investments in the

necessary infrastructure and new customised solutions provide proof of this.

IPC and its operational platforms are a good example of the joint development of solutions

with postal service providers in the area of cross-border delivery services. National and

European e-commerce associations can contribute to their members deploying new solutions

– for example return solutions – quickly and comprehensively.

E-commerce is growing dynamically and drives competition on the market for delivery ser-

vices. Operators such as Deutsche Post DHL are investing in infrastructure, products and

innovative solutions. Online commerce and consumers benefit from this. The market func-

tions properly and produces the desired results. This market dynamic should not be ad-

versely affected by European regulatory interventions. In the event of an intervention being

indispensable in individual cases, national instruments are available for this under regulatory

or competition law in each case.

19. How should current governance aspects of standardisation and interoperability be ad-

dressed? Is there a need to increase involvement of representatives of e-commerce, no-

tably SMEs, and consumers?

Deutsche Post DHL is cooperating closely with other postal service providers and stake-

holders in order to ensure smooth cross-border delivery in accordance with customer re-

quirements. Organisations such as UPU, PostEurop and IPC have great experience in the

areas of standardisation and interoperability. Cooperation includes the European standards

organisation CEN, the Technical Committee “331 Postal Services”, which has the involve-

ment of postal service providers, representatives of regulatory authorities and ministries,

consumer protection organisations and other stakeholders. Finally UPU, with its Consultative

Committee, offers a platform in which representatives of e-commerce (SMEs and others) and

consumers are also able to raise issues.

From the perspective of a postal service provider all governance aspects with regard to stan-

dardisation and interoperability are therefore covered appropriately.

- 31 -

Contact:

Deutsche Post DHL Wolfgang Pickavé Tel: +49 228 182 3510 E-mail: w.pickave@deutschepost.de

Deutsche Post DHL is the world’s leading mail and logistics services group. The Deutsche Post and DHL corporate brands represent a one-of-a-kind portfolio of logistics (DHL) and communications (Deutsche Post) services. The Group provides its customers with both easy to use standardized products as well as innovative and tailored solutions ranging from dialog marketing to industrial supply chains. About 470,000 employees in more than 220 countries and territories form a global network focused on service, quality and sustain-ability. With programs in the areas of climate protection, disaster relief and education, the Group is committed to social responsibility. In 2011, Deutsche Post DHL generated revenues of € 53 billion. The postal service for Germany. The logistics company for the world.