The European Commission will aim to make cross-border parcel delivery prices more affordable for small businesses and consumers in a new Single Digital Market regulation in May aimed at boosting e-commerce within Europe.
The regulation is likely to include a new ‘downstream access’ model under which SMEs, who normally have to pay high-margin published rates, would gain access to the lower ‘terminal dues’ rates charged between postal operators for international deliveries, industry sources told CEP-Research.
In its Single Digital Market strategy presented last year, the Commission identified high cross-border delivery prices as a major obstacle holding SMEs back from expanding into international e-commerce. As many as 57% of EU retailers claim high delivery prices are preventing them from selling across borders, according to a Eurobarometer survey.
The plan for a cross-border delivery regulation, which EU governments are obliged to implement, was confirmed by Werner Stengg, head of the Commission’s Public Interest Services unit (which includes postal services) at this week’s European Post and Parcel Services conference in Lisbon.
“It will be a very focused initiative. The focus will be on low-volume senders… Our initiative is about fixing the gaps, not re-inventing the wheel. We are being very careful,” he told an audience of senior European postal managers, suppliers and other delegates.
The regulation will have two main objectives, he explained. One is to “improve affordability for vulnerable users”, including SMEs who have limited negotiating power and customers in periphery areas. The other is to “enhance competition and market efficiency” by providing national regulators with information and data to be able to effectively monitor cross-border deliveries.
National postal operators would have to offer “affordable prices for vulnerable customers” and provide access to their networks, Stengg said. In addition, all parcel service providers would have to provide basic data to national regulators to enable them to monitor the cross-border market.
However, he did not provide further details of the pricing proposals, noting that discussions are still taking place.
Explaining the focus on national postal operators, the Commission official said “vulnerable” users often rely on these providers and have to pay public list prices. “SMEs have a natural tendency to use postal operators.” But he noted: “Public list prices are sometimes very high, even if all cost considerations are taken into account. Some of these prices seem unjustifiable.”
He told postal delegates: “If you make your cross-border prices more accessible, I think there is a lot of business to be made.”
Stengg cited examples of extreme differences between cross-border prices within Europe. For example, a 2kg parcel sent from the Netherlands to Spain costs €13 (compared to €6.95 for a domestic parcel) but Belgium to Spain costs €26.10 (compared to the domestic price of €6.50). In the reverse direction, a parcel from Spain to Belgium or the Netherlands costs €32.74 (compared to a domestic Spanish price of €8.58).
However, Stengg also emphasised the industry’s positive response to the EC’s 2013 ‘roadmap’, which had identified various obstacles to improved cross-border parcel deliveries, including high prices, lack of transparency, poor interoperability and lack of convenience for consumers. He highlighted in particular the IPC ‘Interconnect’ programme and improvements by other parcel operators.
