The European Commission is planning to investigate problems with cross-border parcel deliverieswithin Europe including high prices and poor service quality as part of its ambition to double the
continent’s e-commerce revenues by 2015 and may introduce EU-wide regulations to eliminate deliveryobstacles.The move is a key part of the ‘Action Plan’ presented by several EU Commissioners yesterdaywhich is designed to complete the ‘Digital Single Market’ and to stimulate growth and employment inthe e-commerce sector. At present, e-commerce only accounts for 3.4% of retail sales in Europe butthe Commission aims to double this share by 2015.
Michel Barnier, Commissioner for the Internal Market, Neelie Kroes, Commission Vice-Presidentresponsible for the Digital Agenda, and John Dalli, Commissioner for Consumer Policy, declared: “The action plan will create new opportunities for citizens and businesses and will bring Europemuch-needed growth and employment. It aims to remove the obstacles which until now have frustratedthe development of Europe’s Internet economy.”
The Commission said at present there are many obstacles preventing consumers and businesses frominvesting fully in online services: ignorance or uncertainty about the applicable rules, offersthat lack transparency and are hard to compare, and payments and modes of delivery that are oftenexpensive and unsuitable.
‘Inefficient deliveries’ have been identified by the Commission as a key obstacle to e-commercegrowth in Europe. In the EU, almost one in two consumers (46.7%) said they were not interested inmaking a cross-border transaction because of worries about delivery, it pointed out.
A recent study commissioned from UK-based FTI Consulting on cross-border delivery of parcelswithin the EU highlighted three main problem areas: significant price differences for large andsmall senders; user concerns about service quality; and a lack of information about alternatives topostal services. It described a ‘two-tier’ market for EU cross-border parcels, with betterconditions for large retailers than for small businesses and consumers.
Regarding price differences, the study said national regulators should clearly definecross-border parcels and monitor prices to ensure they are cost-related. On service quality, thestudy proposed that national regulators should publish data on the quality performance ofcross-border parcel deliveries to overcome customer concerns, and that the IPC could considerpublishing parcel delivery performance data as with letters.
On the issue of market information, consultants FTI recommended: “The Member States shouldpromote awareness campaigns to inform SMEs of alternative cross-border delivery options (mailconsolidators, online parcel brokers, retail networks of subsidiaries of other national postaloperators). The information could be distributed through Chambers of Commerce and tradeassociations. This recommendation addresses the market imperfection created by the fact that manysmall retailers are either unaware of alternative delivery options in their country, or do nottrust such options. These barriers hinder competition and allow national postal operators to retainhigh market shares and high prices, which often leads to lower participation of small retailers tocross-border e-commerce.”
The report put the size of the EU cross-border parcels market at between 181 million and 453million parcels a year in volume terms, or about 10% of the total B2C market. Domestic B2C parcelswould thus account for 90% of total volumes on this basis.
In response to these findings, the European Commission said yesterday it will hold a publicconsultation on cross-border parcel delivery during 2012 in order to obtain a better understandingof possible problems in the market and the solutions that are currently being or could be appliedby different stakeholders. Following the public consultation it will assess whether and whatfurther steps and measures may be needed to address outstanding issues, and could incorporate theseinto a Green Paper with specific proposals by the end of 2012.
The existing EU Postal Directives focus largely on the domestic markets for deliveries ofparcels and letters, where full market opening will be completed as of January 2013. Cross-borderparcels, however, which have been de-regulated much longer, are covered both by these directives interms of the USO and also national competition law. But it is not always clear which cross-borderparcel products fall under USO regulations and which do not on the grounds that they arevalue-added express products.
