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Logistics and delivery in the Nordics

Although made up of four separate and distinct countries, there are sufficient similarities to treat Denmark, Finland, Norway and Sweden as a collective e-retail market from a logistics perspective. This is notwithstanding the fact that Norway is not part of the EU but is part of EFTA, allowing it to share many of the EU’s freedoms and regulations.

The Nordics present some interesting logistics issues for retailers wishing to reach all of its consumers with a total population of approximately 26 million spread over an area of 120,000 sq km, including hundreds of islands. However most of the population is concentrated in the south and in coastal areas.

Figure 39: Urban rural typology based on urban ranking, population, density and land cover Source: www.nordregio.se

Logistics choices to reach the Nordics

Non-Nordic retailers have a number of ways to reach this market.

Post

Direct Link is a fully-owned subsidiary of PostNord, the merged Swedish and Danish post offices, offering a gateway to the Nordics through customised B2C delivery and distribution solutions. It can reach 100% of addresses in all four Nordic countries and offers a choice of options with light goods directly to the customer’s mailbox, a collection point or home delivery with a ‘leave in safe place’ option.

Direct Link operates facilities in the UK, Germany, Poland, US, Hong Kong, Singapore and Australia providing services with the following transit times (subject to point of origin):

  1. Merchandise Mail – untracked items up to 2 kilos – 3 to 5-day delivery
  2. Merchandise Mail Plus – fully tracked up to 30 kilos – 3 to 5-day delivery
  3. Merchandise Mail Returns – packages up to 2 kilos

 

  1. MyPack – for Sweden, Denmark, Finland and Norway

» Fully tracked with SMS & email notification.

» 1 to 3 day delivery for items between 0-20 kilos.

» Available as a PUDO option (MyPack Collect) and also for home deliveries (MyPack Home) in all four Nordic countries.

» Insurance up to 520 Euros

» Integrated returns. Returns can be dropped into a service point or collected from a chosen address

PostNord will launch further new features in 2017 including MyPack Small, delivered directly through the mailbox, ‘Flexi-change’ where customers can change the receiving address of their parcels mid journey - and ‘Digital ID’ as a secure alternative to physical identification checks.

In addition to using the local postal service provider as the final delivery agent, retailers will be able to access services through their own domestic postal providers.

From the UK for example, Royal Mail provides the following service options / delivery time ranges which vary by country (example – small parcel weighing 500 grams and valued under £20):

  1. Royal Mail International Tracked / Tracked and Signed – 3 to 5 days’ delivery
  2. Royal Mail International Standard3 to 5 days’ delivery
  3. Royal Mail International Economy delivery aim within 15 days
  4. Parcelforce Worldwide globalexpress1 to 2 days’ guaranteed – tracked
  5. Parcelforce Worldwide globalpriorityfrom 3 to 5 days’ delivery – tracked
  6. Parcelforce Worldwide globalvalue 4 to 9 days’ delivery aim – not tracked

Note: Royal Mail services have a 2 kilo maximum weight limit.

Global carriers

There are a number of global carriers able to provide collection, distribution and delivery into the Nordics (using their own operations or local partners). The main ones are:

UPS - Offers a range of services and delivery times to the Nordics subject to country of origin and the specific destination

  1. UPS Express Plus – 1 to 2 business daysdelivery by 09:00
  2. UPS Express – 1 to 3 business daysdelivery by 10:30 or 12:00 noon
  3. UPS Express Saver – 1 to 5 business daysdelivery by end of day
  4. UPS Standard – Typically within 5 business days delivery during the day

Fed Ex (now incorporating TNT) – Offers services to the Nordics ranging between 1 and 3 days subject to the service selected and the country of origin.

DHL – Offers one main service option, namely Export Express Worldwide, guaranteed delivery by the end of the next possible working day. As an example, from the UK to the Nordics this will typically be the next working day subject to the exact delivery address.

DPD – DPD is particularly of note in the Nordic market because PostNord (the postal service provider for Sweden and Denmark) is a strategic partner and its delivery partner in all four countries. It offers a range of service options to the Nordics with the examples below showing transit times from the UK in business days:

Denmark: 3 to 4 days

Finland: 4 to 6 days

Norway: 2 to 6 days

Sweden: 4 to 6 days

In respect of online retail deliveries perhaps the two most interesting services are:

  1. DPD Classic which includes DPD Predict, a pre-delivery advice notification which is a service feature generally welcomed by online shoppers
  2. DPD Direct which is DPD’s own branded direct access solution (see section – Direct access) offering lower cost consignment + kilo rate pricing, customs clearance, tracking and a returns service for unwanted items.

Domestic carriers

In addition to the global carriers above (which will also be domestic carriers in most markets), in many countries domestic carriers based in the retailer’s own market will often accept online retail orders and ship them to the Nordics.

Domestic carriers will sub-contract the onward shipment, often to the global carriers or postal service, but for a retailer with a contract with a domestic carrier this can be a natural starting point for accessing services to the Nordics. Retailers already having a service contract with a domestic retailer should start by finding out what options they provide and can use this as a benchmark.

Service times will vary depending on the line haul arrangements in place and the service partner chosen but taking the UK as a benchmark, might be 4 to 7 days.

Direct access

Direct access describes a solution used to consolidate volumes from different senders to achieve better air transport rates. Consolidated orders are shipped to the destination country where they are handed to local partners for the final delivery.

Direct access operators provide a managed service that can include:

  1. In-transit tracking
  2. Customs clearance (where required) – often in advance of arrival
  3. Multiple points of entry – reducing ‘in-country’ line haul costs and lead times
  4. Calculation and payment of duties and delivery charges in advance of order and despatch
  5. HTS (Harmonised Tariff Schedule) code classification
  6. Tracked returns – for unwanted and undeliverable items

Where a retailer has sufficient volume to be able to contract with a direct access operator there is the opportunity to get a ‘courier’ level service at less than ‘courier’ prices, usually paying a per consignment + per kilo rate.

There are a growing number of companies providing such services to the Nordic countries. In the UK for example these include DPD Direct (all countries), wnDirect (Denmark, Finland and Sweden) and P2P Mailing (Trak-Pak – all countries – delivery range 3 to 8 working days’ subject to the specific destination and carrier / service used).

Parcel brokers

Parcel brokers provide smaller retailers with a way to access better pre-contract rates through postal operators, global and domestic carriers and direct access providers.

Parcel brokers do not offer all carrier options, only those that choose to contract with them, but in the UK for example companies such as Parcel2Go and Parcel Monkey provide this channel into the Nordics using most of the carriers mentioned above and others including Asendia and World Economy.

Integrators

Retailers with a reasonable volume of orders going to the Nordics may wish to consider the option of parcel management service integrators who can provide immediate integration with a wide range of service providers delivering into the Nordics market. These will include most of the options already listed (excluding parcel brokers) and many others.

The retailer will need to have or enter into a contract with the delivery service providers they choose but then the integrator will offer the ability to allocate orders to the most appropriate service – using agreed business rules – printing labels and customs documentation, providing tracking and helping to manage returns. For smaller retailers some integrators also offer their own parcel broker option that can help obtain better rates.

Providers of such services include MetaPack, ITinSell, Electio and Consignor which particularly serves the Nordic market and with whom PostNord and Direct Link specifically offer all their services.

Customs and clearance

The delivery operator selected will be able to provide full details and advice on the necessary documentation and processes and some can go further by pre-clearing orders while the goods are in-transit or at the start of their journey using a consumer duty paid process. This can be done using the HTS code assigned to each product category and can reduce delivery times and remove a potential barrier of having the goods held when they arrive in country.

Retailers are therefore advised to specifically ask what their chosen delivery partner can do to facilitate customs clearance and duty calculation / collection.

Packaging

Online retailers looking to enter the Nordic market should be aware of any particular packaging requirements, though depending on the specific goods being exported, these requirements can vary greatly and, depending on the industry, regulations are often administered and enforced by different government bodies.

When contemplating packaging rules and standards, retailers should refer to the packaging regulations for their specific industry.

Delivery in the Nordics

Any retailer wishing to win sales from Nordic consumers needs to appreciate the delivery services that are provided to them by domestic Nordic retailers because these will provide direct competition.

The local postal services will be widely used by local retailers:

PostNord was formed as a merger between Post Danmark (Denmark) and Posten AB (Swedish Post) and now provides domestic ecommerce delivery services to both countries:

  1. MyPack – for Sweden, Denmark, Finland and Norway

» Fully tracked with SMS & email notification.

» 1 to 3 day delivery for items between 0-20 kilos.

» Available as a PUDO option (MyPack Collect) and also for home deliveries (MyPack Home) in all four Nordic countries.

» Insurance up to 520 Euros

» Integrated returns. Returns can be dropped into a service point or collected from a chosen address

PostNord will launch further new features in 2017 including MyPack Small, delivered directly through the mailbox, ‘Flexi-change’ where customers can change the receiving address of their parcels mid journey - and ‘Digital ID’ as a secure alternative to physical identification checks.

Posten Norge (Norway Post) provides services to online retailers through its Bring brand which extends across all four Nordics countries, accessing the local services in each country and branded as follows:

  1. CarryOn HomeShopping – for despatches from within Europe (from where it offers a service), a single parcel rate service with delivery to door or service point / post office
  2. CarryOn HomeShopping BulkSplit – for dispatches from within Europe (from where it offers a service), a bulk transportation service and relevant customs clearance into the country of destination for despatches of 20 parcels or more with delivery to door or service point / post office

For its ‘home’ markets of Norway and Finland, Bring provides its home service which offers a fixed price per parcel:

Norway – only available to the larger cities in Norway.

  1. If the recipient is not home at delivery, the parcel is delivered to the nearest post office and a notification provided by card in the mailbox
  2. There is no pre-delivery advice provided as standard with this service
  3. Deliveries are made Monday to Friday between 17:00-19:00

This B2C option should be compared for service and price against the general parcel service, available through the post office offering a standard 2 to 3-day delivery although some areas take up to 5 days. It is normal for the recipient to collect the parcel from the local post office or post in shop although for an additional charge, delivery to the door is offered.

Home delivery is provided in most towns and cities for delivery between 09:00 and 17:00 on a day pre-selected by the customer. For this service option the customer will receive notification that the order is on its way and, on the day of delivery, a call 30 - 60 minutes in advance of delivery.

Both home and pick-up service options come with full tracking but unlike the collection option, Cash On Delivery (COD) is not available for home delivery.

Finland

  1. Before a delivery attempt is made, the recipient is contacted by phone in order to agree the day on which they want their parcel delivered
  2. Deliveries are scheduled Monday-Friday between 09:00 and 21:00
  3. If the recipient cannot be reached by phone they will be sent a letter with information regarding their parcel and asked to get in touch to arrange a day and time for delivery

Bring does offer a number of optional services to support its business services above, including:

  1. Flex Delivery – allows the sender to capture the recipient’s safe-place instructions to allow home deliveries to be left without signature (Denmark and Sweden)
  2. e-Advising – allows the sender to pass on the recipient’s mobile phone / email details to allow pre-advice of delivery or notification that a pick-up can be made (otherwise by letter)
  3. COD (Cash On Delivery)

Posti Group (Finland Post) provide both home delivery and pick-up options for the Finnish ecommerce market.

Home delivery services are offered at a price premium in Finland:

  1. Express Flex – a tracked service for delivery to the customer’s selected address after one or two working days but always by appointment.The customer’s address AND phone number must be shown on the label. If after two call attempts the customer cannot be reached, a call-back request is left and the parcel retained for the week of delivery plus two further weeks before being returned to the sender if not delivered or collected
  2. Small Item – for parcels up to 2 kilos and 250 x 353 x 30 mm. These will usually be delivered within two weekdays of dispatch, with the normal letter mail. A non-signature service, the item will be left in the mailbox but if it is too large, the customer will have to collect it

The lower cost option is usually for the customer to collect their parcel:

  1. Economy – for delivery to the recipient’s selected postal outlet by 16:00 the next working day with collection until 17:00 that day or for two weeks afterwards. The customer is sent an SMS message (or letter if no mobile phone number is provided) advising that the order is available for collection from a dedicated area in their chosen outlet

SmartPost uses Posti Parcel Points – lockers where customers can choose to have their parcels delivered. Some shoppers may already have registered free for the My Pick Up Point option to have all of their parcels delivered to a particular locker location. Currently only available in Helsinki and Utsjoki although the network is being extended.

Exceptions

Due to the geography and population dispersal in the region, there are often exceptions to delivery standards, services offered and price differences. As such a cross-border retailer serving Nordic customers must take care to accurately reflect its service offer, carefully signposting where the customer can find this information. It is good practice to make such information easily found from the homepage and each product page and certainly before the customer reaches the checkout stage.

Additional services

In addition to providing delivery services, some of the companies above offer services for cross-border online retailers with sufficient volume to take advantage of them; including third-party logistics, local marketing and customs clearance (Norway in particular).

Any overseas retailer must consider their delivery offer against the context of this local service landscape because this influences the needs and expectations of Nordic consumers.

Nordic consumer delivery requirements

When a retailer is deciding on the delivery offer to provide it is important to consider the needs and wants of Nordic online shoppers and to recognise that as an importing retailer it is competing with domestic retailers already meeting these needs.

Overall, Nordic consumers expect to get deliveries within four days of order but, as with most markets the trend is for this to be reduced. Recent research by PostNord has seen the average expectation fall from 4.3 days to 3.29 days between June 2015 and June 2016 with Danish consumers being the most demanding. Evolving consumer expectations by country are:

  1. Sweden – Reducing from 4.3 to 3.29 days with 25% of consumers wanting delivery within 2 days, increasing from just 9% a year ago
  2. Denmark – Reducing from 3.3 to 3.1 days with 39% of consumers wanting delivery within 2 days, increasing from 20% just a year ago
  3. Norway – Reducing from 4.4 to 4.2 days with 14% of consumers wanting delivery within 2 days, increasing from 7% just a year ago
  4. Finland – Reducing from 4.9 to 4.1 days with 13% of consumers wanting delivery within 2 days, reducing from 18% just a year ago

Source: PostNord E-commerce in the Nordics 2016 and 2017

Although some sort of delivery to home is the preferred option for most consumers, Nordic shoppers are prepared to be more flexible in their use of alternative delivery services than most other developed ecommerce markets. A retailer wishing to serve Nordic consumers should recognise that they particularly want a choice between home delivery, PUDO / locker and postal (letterbox) options.

Source: PostNord E-commerce in the Nordics 2017

This data suggests that when delivering to home the ability to leave the parcel in a mailbox or other safe-place is important and there should be an option for the customer to provide delivery instructions. Delivery requiring a signature, when someone must be at home is significantly less popular, perhaps because many of the local delivery providers require the customer to agree to a fixed day and time.

In order to accept online orders when they are not home, Nordic shoppers are significant users of click & collect solutions where, manned PUDO locations are the most popular. The exception is Finland where Lockers and PUDOs are used about equally.

Unlike some other markets such as the UK, click & collect from the retailer’s store is not widely used, perhaps due to the concentration of major retailer brands in the main conurbations.

Click & collect service providers in the Nordics with whom shoppers are familiar include all those shown in the section above. At the time of writing the main cross-border click & collect networks operating in Europe – namely UPS (Access Points), DHL Lockers(PakStations) and myHermes Parcelshops – do not have a presence in the Nordics.

As further evidence of Nordic consumers’ willingness to use alternative delivery options, they are amongst the first to start using ‘in-car’ delivery. This is where the delivery carrier is authorised to use a digital key to open the boot / trunk of the customer’s car and leave the parcel.

The customer must register for this service and provide an approximate location for where the car will be on the day the delivery is expected.This allows the carrier to route the parcel to the right local depot. From there the driver is guided to the exact location by GPS.

This solution is being pioneered in the Nordics by Volvo and, following limited trials, has been commercially available in Sweden since November 2015.

Returns

EU consumers have a statutory right to return goods within 14 days which means that as well as it being good practice to provide a transparent and efficient returns solution, there is a legal imperative too. The most recent research from Post Nord (Post Nord e-commerce in the Nordics 2017) confirms that about one in ten shoppers typically return at least one item a month. Finnish consumers seem to be the most active returners in the region with 14% claiming a monthly return. This seems to be encouraged by the fact that they are the most active users of automated parcel lockers which can also be used as drop off points. When selecting their delivery partner for the Nordics, retailers should find out what arrangements they can make for returns.

Nordic consumers will need:

  1. A simple and transparent returns process
  2. A convenient way to drop-off the parcel or have it collected. Options in the Nordics include:

» PostNord MyPack Returns – drop-off locations – all countries

» BRING Pick Up – ad hoc returns collection – all countries

  1. To be kept informed on the progress of their return
  2. Be advised when their refund is being made, possibly including duty repatriation

Some operators will arrange for the return to be sent back to the country of origin where it can be delivered back to the originating retailer to be processed:

  1. Direct Link will arrange for returns to be sent back to the country of origin, working with companies like ReBound to provide a ‘send back from Nordics’ service
  2. BRING provides its CarryOn HomeShopping BulkReturn service with this aim and some direct access operators also offer local returns management where parcels are consolidated to be repatriated in bulk

Building on this is the option for returns to be fully processed in-country and some operators may provide in-country returns centres where the return can be locally validated, quality controlled and the refund issued. This then may allow consolidated orders for return to stock, disposal or even, when there is sufficient demand, for the goods to be retained in-country and used to fulfil another local order.

To help retailers manage the returns process these same operators are developing white label / multilingual returns portals matching up the original order with the return.

Such portals make it is easier for the customer to make returns, offering multiple payment options such as customer- or retailer-paid. The customer can print the label, see when a return has been received and when their refund is due.

Operators providing portal solutions in the UK include wnDirect, ReBound, Zig Zag and MetaPack.

 

 

 

Demographics

Political and socioeconomic environment

Online and mobile usage

Online shopping behaviour

Marketing

Optimising customer experience

Trust and dispute resolution

Legal framework and regulation

Finance and payment

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