Cross-border parcel prices “too high” says EU Commission study

An important study of the European cross-border parcels market has said prices for delivering parcels across borders within the EU are “too high”, hindering growth in e-commerce and distance selling. The report from the London office of the US-based business advisory specialists FTI Consulting was commissioned by the European Commission internal markets unit.

It said there was a “two-tier” parcel market opening up in the European Union, with smaller and mid-sized retailers paying significantly more for cross-border shipping than large players like Amazon.

And, it warned that some national postal operators are not basing prices on their actual costs, but are free to hike up their rates because of a lack of trusted shipping alternatives, particularly for smaller retailers.

The consultants said delivery fees being charged for sending items between EU Member States was on average twice as high as fees charged for comparable domestic parcel deliveries.

Price regulation currently is “not effective”, said the report, which found that even where there was market competition for cross-border shipping, prices were being “shielded” from competition, and where there were higher shipping volumes, savings are not being passed on to the consumer.

National postal operators in the EU are “able to maintain high prices because of lack of competition”, it warned, also suggesting that separate national regulatory bodies around the EU were not only failing to work together to regulate cross-border pricing, but often had no idea of the level of pricing because bilateral agreements kept such information confidential.

The FTI report called for action to address the situation and promote market growth.

“Setting prices more in line with underlying costs must be a priority,” said the report. “Lower prices will increase volumes and participation of small retailers, decrease the price they pay, and increase their participation to cross-border markets.”


The research from FTI’s Dr Meloria Meschi, Toby Irving and Mark Gillespie provided some of the first-ever estimates of cross-border parcel market volumes in the European Union.

It said currently between 181m and 453m parcels are sent cross-border within Europe each year – about 10% of business-to-consumer parcel volumes – with each package containing goods valued at between EUR 40 and EUR 100. Small retailers are sending between 500 and 1,200 parcels a year across borders, while large retailers send between 25,000 and 62,000.

The research stated that about 9% of EU consumers are currently shopping across borders, while 18% of EU retailers use cross-border e-commerce.

With estimates that distance sales and e-commerce represent respectively 7% and 5% of total retail turnover at present, and only 1% of that generated cross-border, the FTI report concluded that there was “significant” potential for market growth if the barriers are tackled.

The report made particular recommendation for the EU to address the “vicious circle” for smaller retailers, with high prices for smaller volumes keeping them out of the cross-border market. Currently one in two small retailers in the EU are engaged in e-commerce, but only one in five send items across borders.

One key recommendation following the FTI analysis was for a major improvement in the information available to smaller retailers, who often opt to use national postal services because they are not aware of trusted alternatives.

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