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This Christmas is set to be the busiest ever for the UK’s ecommerce sector. In part, the demand for home deliveries in 2020 is being fuelled by Covid-19 – but not entirely. In fact, the pandemic is just accelerating an existing trend.
Over the last twenty years, the UK’s ecommerce sector has seen year-on-year growth. While in 2001 ecommerce represented just 0.3% of sales in the sector, by 2019 it accounted for 20% of all retail worth an estimated £76 billion – and this was before the pandemic even began.
For all of the benefits home deliveries bring, unfortunately,there are some severe costs. These costs are not felt by the individual shopper, but by all of us. Toxic van emissions, overly congested local road networks, depleted high streets, and shopping not arriving on time; these are just some of the consequences of an over-reliance on home delivery.
Since 1990, van carbon emissions have increased by 67%, and are up 19% since 2012 alone. The National Infrastructure Commission (NIC) says that rail and road freight account for 6% of the UK’s total CO2 emissions today, but without intervention they could be responsible for around a fifth by 2050. They also point out that there is a significant economic cost of congestion resulting from freight in the UK, estimated to have cost the UK £7.9bn last year.
Covid-19 accelerated this problem, to the extent that in the spring our ecommerce system had almost crashed completely, and it was taking weeks for products to arrive. With a second wave of the virus upon us and consumer demand mounting, the situation may well be even worse during this festive period.
So what is the solution to this? I am certainly not about to suggest cancelling Christmas presents, nor would I ask people to stop shopping online. However, we do need to rethink the way we receive our shopping.
This is why Government should incentivise the use of ‘pick-up and drop-off’ (PUDO) networks in the UK. PUDO is simple – rather than having items delivered to your house, you send them to a local hub, such as a post office, newsagent, shop counter, or locker, and then collect them whenever you’re ready. If enough consumers start using PUDO, vans will have far fewer miles to drive – because they’re dropping off lots of parcels at one spot, rather than literally going round the houses. Driving fewer miles means parcel carriers will pollute less, create less congestion, and increase their ability to deliver large volumes of parcels quickly. That means, perhaps most importantly of all, people will actually get their Christmas shopping on time!
There are a number of steps the Government can take to increase the use of PUDO. Alongside a public awareness campaign and financial incentives for customers who choose PUDO, decision makers should consider reviewing the Mail Delivery Agreement between Royal Mail and the Post Office, so that the UK’s 11,500 taxpayer-funded post offices can become PUDO points accessible to everyone, not just Royal Mail parcels.
On balance, the growth of ecommerce has been a positive development for society – not just here but around the world. But that does not mean that there have not been some negative impacts. And consumers are currently ill informed about these negative impacts because, frankly, no one has been informing them. It is time to change that and start a national discussion about how we order shopping online.
Properly incorporating PUDO would be a valuable evolution for the UK’s ecommerce sector and might even save Christmas from the sort of delivery delays we all experienced in the spring!
Tim Robinson, CEO of Doddle