Merchants and logistics providers in Europe need to be prepared to both meet regulatory obligations and to participate in voluntary frameworks aimed at improving sustainability and other social responsibilities.
Like it or not, change is needed in ecommerce and the last mile, where delivery volumes have reached levels that are having serious impacts on urban centres across Europe. As we forecast in January, cities are leading the fight on regulation, but France is showing that national governments might also play a role, albeit with softer, voluntary approaches.
France: the ‘best practice’ approach
In France, two voluntary charters have been drawn up (one for merchants, one for logistics providers), with leading merchants and some 30 logistics businesses choosing to become signatories. The logistics charter relates to real estate practices like covering new construction roofs with solar panels, planting hedges around the perimeters and concentrating new warehouse creation in existing industrial land.
On the merchant side, there are multiple provisions in the charter to improve sustainability across both delivery and returns.
Signatories pledge to:
– Reduce packaging volume by 75%
– Consolidate multiple items from a single order into one delivery
– Inform consumers of the environmental impact of their delivery choice
– Not encourage “bracketing”, where consumers order multiple items in different sizes and return those which don’t fit, through use of a size guide and alerts when items are ordered in multiple sizes
– Highlight products with the best environmental record
While only 15 merchants have signed the charter currently, that is likely to be due to the limited capacity of smaller merchants to effect such changes, given their limited technical capacity and lack of insight into delivery impacts. However, if they could sign and adhere to these principles, it would give them a degree of credibility in an environment where consumers are broadly sceptical of ‘greenwashing’.
This means that logistics providers have an opportunity to bring merchants up to parity with best practices by enabling these provisions for them. For example, they could provide a checkout integration to their out-of-home network, actively highlighting greener delivery options, or provide a returns solution which can flag problematic orders and capture returns data at the point when consumers are attempting to begin a return, rather than at the warehouse after the returned goods arrive. Giving merchants better delivery options and more control over returns, as well as more information about how these affect their customers, can only be a positive.
Barcelona: Direct economic incentives
A more confrontational regulatory approach is being taken in Barcelona, where the city council has set out 10 goals for urban logistics to be achieved by 2030, and is backing these up with regulation.
The objectives include halving emissions associated with the delivery of goods, 40% of ecommerce parcels being delivered to collection points, and having ten times the number of “cyclologistics vehicles” (known to us as ‘bikes’) in operation for last-mile deliveries, aiming to reach 800 by 2030.
To achieve those aims, the council aims to implement a collection point network, changes to regulations on charging infrastructure, and most significantly for carriers, a 1.25% gross revenue tax for delivery operators with annual revenues over €1M – although deliveries to collection points are exempt.
This delivery regulation means last-mile carriers and postal operators must think differently about how they engage with consumers. It attempts to price in the negative externalities of traditional “to-door” ecommerce deliveries. Whether this price is passed on to merchants (and then on again to consumers) or not, carriers will have a direct financial incentive to convince more shoppers to collect their purchases rather than defaulting straight to home delivery.
There’s another way for all this to work, however: rather than waiting for cities and governments to step in, last-mile carriers and postal operators can proactively develop plans for urban logistics to address the negative externalities that provoke regulators. We’ve seen successful examples of this in Belgium, where the national postal operator bpost has introduced “Ecozones” in municipalities across the nation, enabling emission free and heavily consolidated deliveries for consumers.
To be able to collaborate with regulators, or to stay a step ahead and start fixing issues themselves, carriers need a technological capacity to be able to influence consumer behaviour, as well as showing the value that doing so has for merchant partners. Tools like checkout integrations for OOH networks, digital returns propositions that help to reduce wasteful returns, and PUDO network management that helps to deploy new locations quickly and manage them effectively will all play a role towards carriers’ success in navigating an increasingly-active regulatory environment.