TRAN Committee discusses cross-border parcel delivery services

On May 3, the TRAN Committee discussed a first draft on the cross-border parcel delivery services by rapporteur Lucy Anderson (S&D, UK). 

By Zeinah Mugdadi

05 May 2017

The rapporteur presented her draft, starting from the basis that the Commission proposal had good elements, but needed further improvement. Divergences however existed among the MEPs regarding whether the Commission proposal should cover only the USPs or all market operators, including SMEs in this sector. MEPs also disagreed on requirements related to transparency, affordability and competition. The representative of the Commission clarified the Commission’s stance, highlighting that there should be made a distinction between this proposal and the already existing Postal Services Directive and emphasising that the Commission was aiming to provide smaller operators with opportunities in the internal market. Please find below a summary of the discussions:

Lucy Anderson (S&D, UK) believed the report to be a very important one, particularly because cross-border parcel delivery was an area the TRAN Committee had not dealt very often with. It was a matter of logistics as much as a matter of a connected Europe. The rapporteur started off the work on the basis that the Commission proposal was a good one, but needed further work. The basic problem was illustrated by the fact that when people were ordering online, they were not happy with the situation on prices and the quality of the services. This report aimed at dealing with both a transport and a consumer-focused measure. She therefore took the view that they needed to look at it in that respect, but also consider the entire sector. She highlighted that if the focus were to be on USPs, as it was the case in the Postal Services Directive, in most cases in most countries, the USPs have a small share in the parcels market, bearing in mind that the sector was not hugely regulated at the moment. Comparing this to other consumer matters such as financial services, telecoms and a lot of justice areas where the Commissions was doing quite a comprehensive monitoring and assessment, postal services was an area where they did not have enough information and parcels was identified as a priority area in the Digital Single Market.

She informed that she held meetings with postal services organisations, small businesses, regulators, consumers, trade unions. The EESC looked at it as well, but not the Committee of the Regions and she regretted it as there was clearly a need to look at national and regional approaches on this.

In terms of the Commission report, Ms Anderson believed that it had to look at the whole market, otherwise it was not fair and was not creating a level-playing field. In terms of the basic provisions, they need to consider that there are universal services obligations as well. Article 14 and Protocol 16 of the Treaty make it very clear that if one is carrying out public services, and to a large extent post and parcel is part of that, one needs to organise regulations in such a way that it does not prevent operators from doing their job. For that reason, she decided to delete article 6 as it was not fair and created a situation in which parcel delivery providers and USPs only had a small share of the market, targeting only these providers not making much sense in the overall context. She acknowledged the fact that the IMCO Committee had a different view and looked at restricting this to small business only.

In terms of other provisions, it was important for her to get the objectives right and the Commission started off well. But in terms of articles, the focus should be on consumers, she added, to be able to ensure that affordable services are available. Her report allowed for that in her opinion and said that article 1 was offering a clearer definition to achieve efficient and affordable cross-border parcel delivery services. She advised her colleagues to bear in mind that they were talking about the cross-border segment of the market and that the sector has not known too much intervention. Some people call for a more extensive intervention such as price caps or an EU single rate. Ms Anderson also told her colleagues to bear in mind that the Commission decided not to revise the Postal Services Directive, when it would have been recommended.

Regarding article 3, she believed that the Commission was right in calling to provide more market information for national regulatory authorities. It was important to get the balance right. She considered equally important to know the fragmentation and range of employment practices in the market the same way that they need to know about turnover and other economic indicators. She mentioned that the Council had a debate on subcontractors and workers in the postal sector with a contract other than on a full-time basis. Similarly, she deemed essential to have data on cross-border tariffs and terminal rates. She was aware that the issue of terminal rates was a controversial one for many of the business community, however, it was part of the overall picture. If it was dealt with confidentiality, problems like competition and why prices are different could be dealt with.

On assessing the affordability of tariffs, Ms Anderson wished to clarify that in her report they were not claiming that all providers had the duty to provide universal services in this area of cross-border prices. In the report, she was looking at the need to shift the approach to ensure that the regulators were doing their job properly and proceeding on the first basis as looking at the rights of individual users, small business users, users who do not send parcels and do not have large bulk parcels, users in remote areas and disabled users. She believed that regulators were not looking at this at the moment. She emphasised that they should be looking at what all providers were doing to get a better picture and come up with the right decision. Once again, she highlighted that it was not a question about price regulation. 

Lastly, Ms Anderson emphasised what she considered to be a gap in the regulation which the Commission acknowledged and which referred to requirements on procedure for guidance, damage, loss of goods and returns. She acknowledged that the Consumers Rights Directive provided at a higher level the requirements around this type of thing, but not sufficiently. She said that they were told by consumers that many operators in e-commerce simply were not interested to provide these information requirements and were not interested in standardisation requirements. She concluded that her report was not radical, but rather complementing the Consumer Rights Directive, and promoting standardisation, including on environmental grounds.

Markus Ferber (EPP, DE) expressed his surprise when reading the draft, as he was the rapporteur on the Third Postal Directive, where they agreed on quite a different methodology and when Ms Anderson was a shadow rapporteur for the S&D. He was disappointed that she left behind the agreements done at that time. He wished to make the difference between cross-border parcel delivery and postal services. When it comes to universal services requirements, he recalled that they agreed that they would not make any changes. He also recalled that based on the 1992 Green Paper, the competition in the field of parcels was working well and he could not understand why the sector needed regulatory measures. He said that this was an interesting conversation, but his group did not agree.

Mr Ferber believed that the actual problem had to be identified and that they should focus on the pricing matters of cross-border parcel delivery services. To allow SMEs to enter the market and create more competition, he said that they should look at the production chain. He said that this was based on international post treaties and therefore, it was hard to amend them in the context proposed by the rapporteur. He said that the questions they should be dealing with were of a different nature and in his report, they deliberately decided not to tackle them because they agreed they did not want to open the discussion on whom was going to pay the price for universal delivery requirements.

Regarding the supervisory authorities, Mr Ferber asked which ones the rapporteur was referring to. There was an enforcement problem of the existing legislation. Those who are currently responsible for market supervision are the people who own the biggest postal service providers. That in his opinion was the problem. He believed that the rapporteur was only strengthening that with her proposal as she was favouring the biggest players.

In terms of affordability, he said that in the first Postal Services Directive they were clear about that. The Commission was the one to push for this. Setting up a supranational market to deal with this was not the right way in his opinion. The issue of free access was a good one, in the field of B2B it would work well, but not in the private to private cross-border parcels delivery. He pointed out that the rapporteur’s model would not work in these situations. He said that her proposal was weakening consumer rights. He concluded by saying that he had difficulties with her proposal and said he would be tabling amendments.

Kosma Złotowski (ECR, PL) said that the report was considering many aspects raised during their debate. This draft report tackled the main challenges linked with facilitating the access to cross-border parcel delivery adequately. He said that it was better than the original document of the Commission, particularly regarding article 6. He noted the intention to improve the situation of the consumers, guaranteeing a high quality of services and affordable prices.

Extending the scope to all entities providing cross-border services is to be welcomed. Without the extension of the scope, they could not work efficiently. If they wanted the prices to be adequate, he said, they needed to collect information from the bigger stakeholders. He highlighted the issue of deadlines to submit statistical data to the competent authorities, welcoming article 5. However, on article 5 and assessing the affordability of tariffs, he wondered whether it would be effective, mentioning that it might disturb the situation on the market.

The threshold for the employees has been lowered, the exemption on the threshold below which no information must be provided under at article 3. The Commission proposed 50 or more, deeming this right to avoid disproportionate burden on SMEs. The subcontractors can generate excessive red tape, increasing the costs borne by the operators. There is a lot of information including information on terminal rates, which ought to be considered sensitive information, so confidentiality must be respected. To sum up, he welcomed the efforts of the rapporteur and considered the draft report better than the original proposal. However, he said he would be submitting amendments.

Pavel Telička (ALDE, CZ) agreed with Ms Anderson’s proposal. He would not disregard the complexity of many of the legislative proposals, this one was very complex and quite technical and could have significant implications. During discussions with stakeholders, he rarely came across such a wide divergence of opinions among them. He recalled that he was at first quite reluctant and hesitant towards the legislative proposal. Today he saw a need for a legislative proposal and certain issues that needed to be addressed. The business has changed since then. Looking at the volume that parcels represent and how competitive the market is, they could have hardly foreseen that years back. The business continues to change. Therefore, there was a need for an assessment or a review. He said that on a set number of provisions, all the stakeholders would agree such as the need of availability of information and article 3 and the national regulatory authorities.

To show the complexity of the file, he deemed necessary to ask which consumers they were referring to. In his opinion, it was a complex matter because the market was competitive, some players being dominant on the market. The markets in the EU were different. It was a matter of enforcement of existing legislation. However, he said that he disagreed with some stances of his colleagues, but said that he would table amendments to help create a well-functioning market for this sector.

Tania González Peñas (GUE/NGL, ES) recognised the efforts of the rapporteur highlighting the positive points in the Commission proposal and getting clarity. She focused on the obligations that fall to operators within parcel delivery services, specifically the extension of information obligations. She however wished to make a couple of points which they could go into greater debt on. They should not forget that the overarching aim was to improve the interoperability of networks and parcel delivery operators. According to documents published by the Commission, only 10 % of tariffs were subject to transparency problems. Therefore, they did not press ahead with the assessment on yearly affordability. The fixed tariff did not reflect in her opinion the reality. She pointed out that the market was extremely diverse: large private international operators held big parts of the market and they were more flexible, maintaining their competitiveness by reducing wages, pushing labour conditions down. She also referred to consumer protection given the cross-border dimension of the sector. She said that her amendments would head in this direction.

Daniela Aiuto (EFDD, IT) mentioned some issues that they needed to continue working on to ensure a regulated and harmonised market to improve the cross-border parcel delivery and guarantee fair competition. She believed that this type of service should be less expensive and more efficient, especially because it was a digital service. She was of the opinion that they should be looking into analysing how this was connected to e-commerce. She was also in favour of reducing costs and protecting the environment. The explosion of logistic services had an impact on the environment and this should not be neglected. She concluded by saying that she would be tabling amendments along these lines.

If you are interested in reading the full briefing, please sign up for a free trial of the Dods EU Monitoring service.  

Read the most recent articles written by Zeinah Mugdadi - Dods Guide to the Austrian Presidency of the Council of the EU

Share this page