New cross-border delivery services regulation: A better deal for consumers

Written by Lucy Anderson on 8 February 2018 in Opinion
Opinion

The new cross-border parcel delivery services regulation promotes efficiency, fairness and transparency, says Lucy Anderson.

Lucy Anderson | Photo credit: European Parliament audiovisual


Parcel delivery is undoubtedly one of the most competitive, innovative and fast-growing sectors in the European Union. Around four billion online orders are fulfilled by parcel annually. The potential for further growth in this sector is also clear. In the EU overall, while 44 per cent of consumers buy online in their own country, far fewer (15 per cent) order online from another country.

EU online consumers and small businesses have considerable concerns over the delivery of items bought and sold cross-border, in many cases including the relatively high costs involved, as well as the quality of the service. 

Recent studies reveal the disparities between the member states: while in some cases the cross-border delivery services sector is working fairly, effectively and reliably, in other countries this is not the case.


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Many players on the market need to be taken into account, such as pan-European operators, integrators and local or regional competitors. In addition, large eRetailers like Amazon are also entering the delivery market, while disruptive players such as Uber are creating completely new challenges for the sector. Thus, a lack of transparency surrounds parcel delivery prices, encouraging operators to maintain prices that in some cases are unreasonably high.

According to the 2015 Eurobarometer survey, high cross-border parcel prices do not always reflect the underlying costs involved, contrary to what people might think. 

For example, the price of a comparable standard 2kg parcel vary substantially from one country to another, even where both member states have similar labour costs and the parcels will travel a similar distance. 

This means that to send a parcel from the Netherlands to Spain would cost €8.73, while the same thing in reverse would cost €30.37. It is clear that because of this unjustified difference in pricing, cross-border eCommerce is growing much more slowly than national eCommerce.

Moreover, consumers are often blocked from buying goods, services or content online from other member states, as many companies either choose not to sell across borders, or only sell certain items cross-border.

Achieving a substantial level of satisfaction for consumers, increasing their choices, service and value in the parcel delivery industry, while always aiming at securing greater transparency on workers’ terms and conditions, has long been a goal for centre-left politicians, however sufficient rules and guidance have been lacking. 

Divergent national legal frameworks and differences in how the postal services directive has been implemented prove that national postal regulators do not have the information they need to adequately monitor the parcel operators currently active on delivery markets.

In this context, the European Commission, in the framework of its digital single market strategy, has proposed a regulation on cross-border parcel delivery services that aims to secure greater efficiency in the sector, while offering transparent tariffs and price assessment.

While preparing for this proposal to be considered in the European Parliament, we consulted a wide range of users and postal sector organisations, including regulators and those representing small businesses, consumers and trade unions. This provided a full range of perspectives and suggestions on the Commission’s proposal.

As we strongly support efforts to create a digital single market adapted to the needs of consumers and retailers, we were seeking to provide a fair and balanced approach for all operators in the sector, one that is fully in line with, yet complements and builds upon, the provisions of the postal services directive. 

We therefore succeeded in expanding the scope of the key provisions of the regulation to all cross-border parcel delivery service providers, particularly since many universal service providers do not have a large market share of the EU cross-border parcels market. 

In this regard, it has been agreed that national authorities will be given greater authority and guidance on monitoring cross-border delivery prices and assessing cross-border parcel tariffs in the public interest when deemed necessary.

Importantly, when assessing tariffs, authorities must take into account, where it is relevant to do so, the likely impact of cross-border tariffs on individuals and small businesses, including in remote areas, as well as on disabled people and those with reduced mobility.

From a progressive perspective on workers’ rights, it is time for the industry to ensure that its entire parcel delivery workforce have decent working conditions and job security.

Under the new regulation, parcel delivery companies - including multinationals - will provide information to national regulators each year on their employment practices for people they use to deliver parcels and on the sub-contractors that they have. 

These new rules would help expose the activities of some businesses that do not give their parcel delivery workers proper terms and conditions of employment, instead requiring them to work on a self-employed or zero-hours contract basis.

Last, consumer confidence will benefit from a greater emphasis on improved requirements for more transparent and comparable data on available price and delivery options, as well as information about complaints procedures when parcel deliveries go wrong.

More generally, these new rules are an important element of the Commission’s digital single market strategy in supporting eCommerce growth as part of a modern and fair social Europe. We are confident that, through the new regulation and the added focus on parcel services that this has generated, we will be able to assist in securing greater transparency of tariffs and employment practices for the sector as well as a better deal for consumers and small businesses ordering cross-border parcels.

 

About the author

Lucy Anderson (S&D, UK) is Parliament’s rapporteur on cross-border parcel delivery services

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