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EU considers price caps for cross-border ecommerce delivery

Thursday, November 29th, 2012

The European Commission is looking at possible price caps to bring down costs of delivering parcels, including ecommerce items, across borders within Europe.

The European Union’s executive branch issued a green paper today looking at “gaps” in current regulation as it seeks more of a “truly integrated” single EU market for parcel delivery.

It said only 9% of EU consumers are currently buying goods online, with doubts about whether goods will arrive seen as one of the key barriers to higher levels of international ecommerce.

The consultation, which runs until just after Valentine’s Day, could pave the way for new measures to bring down delivery costs for cross-border parcels within Europe, particularly for international ecommerce transactions, and maximise convenience for consumers.

Officials in Brussels have even suggested a whole new “universal delivery service” for parcels, setting out requirements for affordability and quality of services.

With a particular eye on improving the delivery services available for smaller and medium-sized online merchants, one of the key concerns in the green paper is that delivery prices for cross-border ecommerce “vary significantly”, even for goods sent to the same destination.

“There is a need to identify solutions to limit the impact on delivery prices of crossing borders and to close the existing gap between the domestic and the cross-border price,” said the Commission’s consultation, which asks whether delivery tariff levels should continue to be left to the market, or whether measures like a price cap would be feasible.

Along with prices, other notable issues that the Commission wants to address is the convenience of parcel delivery for consumers and the interoperability of different delivery networks within Europe.

“This Green Paper consultation will help identify the right measures to improve parcel delivery in the single market,” said Michel Barnier, European Commissioner for Internal Market and Services. “A flexible and well-performing EU-wide delivery system focusing on the expectations of consumers and specific needs of e-commerce will contribute directly to the enormous potential of e-commerce for boosting growth and creating jobs.”

EU Trade

“A flexible and well-performing EU-wide delivery system will contribute directly to the enormous potential of e-commerce”

Delivery is “critical” to facilitating European trade, the Commission said in its green paper, but warned that cross-border delivery was currently considered an obstacle by 57% of retailers, while 46.7% of European consumers are concerned about delivery in cross-border transactions.

The EUR 42.4bn EU ecommerce market is currently fragmented and under pressure, said the paper, with consumers wanting more convenient and low-cost delivery, along with more transparency in the delivery chain, with online merchants scrapping for market share desperate to meet these consumer demands.

Delivery operators are similarly under pressure to meet conflicting demands for low-cost and increasingly sophisticated delivery services, in often highly competitive home delivery markets.

The Commission decided back in January to investigate the market, after research it commissioned suggested there was a “two-tier” ecommerce market forming in Europe, with large ecommerce merchants running away with the market, while smaller competitors faced high delivery costs and complex delivery services.

The Commission said today it wants to see whether better services could be provided through new logistics platforms bringing together groups of delivery operators to better meet the needs of retailers, including the provision of returns services.

Among the questions posed by the Commission’s green paper, stakeholders are asked what kind of delivery information needs to be available to consumers shopping cross-border. E-tailers could be required to make their actual costs of delivery more transparent in the purchase process, under one suggestion.

And, the consultation asks whether a system of performance standards need to be developed, under which delivery services can be monitored, and perhaps certified under a “trust label”.

The EU Commission’s consultation is accepting views from all stakeholders until 15th February, 2013.

Along with the formal consultation, the Commission has engaged consultancy partners to reach out to key stakeholder groups across Europe to gather more insight into the challenges and possible solutions.

In the Spring of 2013, the Commission said it would look to outline a “set of actions to be taken to complete the single market for parcels”.

  • Post&Parcel’s publisher Triangle Management Services has published a major research study detailing the issues that cross-border ecommerce currently faces in Europe. More details are available here »

Source: Post&Parcel/EU Commission

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