Brussels to crack down on cross-border postal prices

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As consumers across Europe hit the internet to finish their last bits of Christmas shopping, Brussels is preparing a regulatory crackdown against rip-off pricing by national postal operators on cross-border parcel deliveries.

EU regulators have become increasingly frustrated by what they are say are irrational pricing strategies that may be deterring people from internet shopping.

Basic cross-border parcel deliveries are on average five times more expensive than identical deliveries on the domestic market, according to data from a new study to be published this week by the European Commission. The problem persists even when similar distances are involved.

There are also often large differences between what it would cost to send a package from one country to another compared with the charges for doing the same operation in reverse.

The EU has placed high hopes in the potential of online commerce to boost cross-border trade, and so better knit together the bloc’s common market. A Commission spokeswoman said that the regulator will “launch measures to enhance price transparency and regulatory oversight” of the cross-border parcel delivery market early next year.

Options being considered by the commission, according to people briefed on the plans, include beefed up powers for national regulators to enforce existing EU rules on fair pricing, and measures to make it easier for rival operators to access existing delivery networks. The bloc will also set up a price comparison website and pursue other measures to improve the transparency of charges.

According to the study, while the price of a standard 2kg parcel delivery in Austria with the national postal operator is €4.44, to have that same parcel send to neighbouring Italy would cost €14.

If you wanted to send the same parcel back from Italy to Austria, the cost would rise to €25.

Similar examples can be found throughout Europe. To send that parcel from the Netherlands to Spain would cost €13, while to do the same thing in reverse would cost €32.74. (UK to spain £13.26 = €18.07)

Elżbieta Bieńkowska, the bloc’s single market chief, told the FT that the objective “is to make shipments of cross-border parcels seamless and more affordable for both individuals and same – not by regulating prices or imposing caps but by increasing transparency and competition”.

Other regulators are also looking in depth at the parcel delivery market.

Last week, France’s competition authority doled out €672m of fines against some 20 parcel delivery companies that it accused of colluding over fuel costs.

The companies, which include Royal Mail’s GLS parcels arm, had been agreeing how much to charge customers for so-called fuel surcharge between 2004 and 2010, according to the French regulator.

Andrus Ansip, vice-president of the EU commission responsible for the digital single market, told the FT that it was
clear that “high prices and inefficiency of cross-border parcel delivery deter people from selling to or buying from other EU countries”.

Agustin Reyna, senior legal officer at BEUC, a lobby group bringing together national consumer watchdogs, said that problems with parcel delivery in the EU go beyond pricing.

“Lack of trust in complaint handling procedures or late delivery continue to hamper consumers from ordering online,” he said.

“It becomes a real annoyance when high cross-border delivery costs wipe out the benefit of lower sales prices.”