Written Evidence – DPD (TRA0010)

DPD UK is a member of one of Europe’s principal parcel delivery networks, DPDgroup, wholly owned by France's La Poste, the second largest postal group in Europe. We are a leading operator in the UK express parcels sector, offering a range of specialist solutions and services to our customers.

As part of DPDgroup, DPD UK has access to extensive ground and air networks, ensuring competitively priced delivery services anywhere in the world. DPD UK’s international delivery services are managed from the company’s new, purpose-built International Gateway in Hinckley, Leicestershire and our main hub in Oldbury, West Midlands.

DPD UK is invested in the UK economy and provides a high number of work opportunities across the country. The company has a workforce of 12,000 people in the UK, and operates more than 7,000 vehicles from over 60 locations, delivering over 200 million parcels in the UK a year. 

We are proud to be operating in the UK and have been voted the nation’s favourite parcel carrier by the British public for the last four years.

Overview

The current system works well for DPD and other UK businesses, and we fundamentally believe that a post-Brexit agreement that ensures frictionless trade and ensures minimal disruption to freight is in everybody’s interest – the citizens, businesses, and governments of both the UK and the EU.

An agreed transitional or interim period with clear objectives is critical to ensure that our business has enough time to adjust to the new regime that is to be negotiated.

Of particular concern is our drivers’ ability to continue accessing continental Europe and pass through customs borders with relative ease, as parcel delivery into the EU is an attractive market for our customers that is growing significantly on the back of the boom in e-commerce.

DPD UK will handle 36.8 million outbound and inbound international parcels in 2018.

DPD’s total international outbound parcels are forecast at 24.8 million for 2018. Nearly 90% of this volume is destined for the EU.

In addition, we handle significant numbers of parcels sent from sellers in the EU and elsewhere; these are customers of our Group, for delivery by us to UK consumers.

The total inbound volume is forecast at 12.1m for 2018. Therefore, it is imperative that transporting these goods between EU countries and the UK remains as frictionless as possible, for the benefit of our customers.

Of our export/import volume of 36.8 million parcels, over 34.2m parcels – or 93% of our volume – therefore require no custom clearance. If this were to change, how we transport these parcels will also have to change, and the impact to our business, and the business of our customers, would be highly detrimental.

By 2019, the total volume is forecast to be 41m international inbound and outbound parcels, with a split of 27.5m parcels outbound, and 13.2m parcels inbound.

Post-Brexit transport and the implications of no-deal

Any plans to diverge from specific EU road haulage rules for the benefit of UK hauliers must be balanced by the need for UK and EU systems to remain interoperable after Brexit.

A specific action the UK Government can take is to bring UK fuel duty in line with that of its continental European counterparts, to ensure a level playing field for UK hauliers.

A report by Oxera suggests that following Brexit, the UK will be hit by significant border delays that could lead to more than £1bn a year in economic damage[i]. Similarly, the Freight Transport Association has warned that if an average of two minutes was added to customs processing, a 17 mile queue would form from Dover almost back to Ashford[ii]. This situation would be disastrous for DPD, its customers, as well as for the UK’s air quality standards, and must be avoided.

As outlined above, if we had to custom clear an additional 31.9 million parcels annually we would need more than two years to adjust to the new system, and it is essential that the Government achieves as close to the status quo during this period as possible in relation to cross border e-commerce trade.

As a business that operates across the whole of the UK, the prospect of a hard border between Northern Ireland and the Republic of Ireland is of particular concern to DPD. Being able to transfer parcels as easily as possible both between Northern Ireland and the Republic of Ireland, and between Northern Ireland and Great Britain, is of utmost importance to us. It is essential for our ability to deliver an efficient and affordable service to our customers.

A no-deal scenario would jeopardise the fluidity of the current customs regime, and as a result would heavily impact our day-to-day operations. As an individual company, we currently have no means to achieve a frictionless process ourselves in the case of a no deal scenario and would need to set up new departments for the clearance of goods and the collection of Duties and Taxes.

To be as frictionless as possible, we need a totally paperless solution and electronic declarations – essentially virtual borders – so we can clear goods electronically at our International Gateway in Hinckley instead of at Dover.

As discussed above (3.3), there is a danger of increasing the toxicity of the UK’s air if delays occur as a result of a divergence in customs regulations.

For its part, DPD has been at the forefront of the industry’s efforts to meet the challenge of increased demand for parcel delivery services, while addressing congestion and pollution.

DPD continues to be committed to transitioning as much of its fleet as possible to low, and zero, emission, both in the UK and in its continental European operations. 

We have pioneered a number of initiatives to tackle air pollution, including ambitious schemes to integrate the latest green technology into our operations, and opening our first zero-emission depot opening in London in October[iii].

Furthermore, DPDgroup achieved carbon neutrality in 2012 by taking measures to reduce emissions per parcel and offsetting the remaining emissions.

While cross-border haulage is likely to decarbonise later than last-mile delivery, we would not want to see differences emerging in licensing of new technologies between the UK and EU, so that future low-emission trucks could cross the border easily.

Additional information

We are keen to continue this dialogue and would willingly provide further details of our operational activities, IT systems and automated parcel sorting facilities, as well as the potential impact that new Customs arrangements could have on these.

14 September 2018