Documents considered by the Committee on 6 July 2016 Contents

5Cross-border parcel delivery services

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Innovation and Skills Committee

Document details

Proposal for a Regulation on cross-border parcel delivery services

Legal base

Article 114; ordinary legislative procedure; QMV

Department

Business, Innovation and Skills

Document Numbers

(37821), 9706/16 + ADDs 1–6, COM(16) 285

Summary and Committee’s conclusions

5.1High prices for parcel delivery deter consumers and small businesses from buying and selling cross-border within the EU. Two particular reasons for this market failure have been identified. First, consumers and small businesses lack information about available delivery services, providers and prices. Second, regulation of cross-border parcel delivery is very limited. As part of its package of measures designed to boost cross-border e-commerce, the Commission proposes to increase price transparency for cross-border parcel delivery and improve regulatory oversight of the market. Details of the Commission proposals are set out below. We consider the other proposals in the package elsewhere in this Report.

5.2In her Explanatory Memorandum of 15 June, the Parliamentary Under-Secretary of State, Baroness Neville-Rolfe, expresses the Government’s support for EU-level action to tackle the identified objective.

5.3Earlier in the year, the Government submitted a paper to the European Commission advocating regulation of cross-border parcel delivery and making various suggestions, including improvement of transparency and market oversight. The Government emphasised the need for transparency of information not only about price but about other aspects of service such as delivery options and the cost of returns.

5.4The Government is considering its position on the detail of the proposal and will draw on its earlier analysis as it does so. An update will be provided to Parliament once the Government’s analysis has been completed.

5.5Since the Government submitted its Explanatory Memorandum, the United Kingdom has voted to leave the European Union. We would ask that, in her next correspondence with us, the Minister address the following matters that subsequently arise:

5.6On the substance of the proposal, we note that the Government is still considering the detail. In the Minister’s next correspondence with us, we ask that the following issues be addressed:

5.7We retain the proposal under scrutiny and look forward to a response on the issues set out above and the progress of negotiations by the end of September. We draw it to the attention of the Business, Innovation and Skills Committee in the light of that Committee’s inquiry into the Digital Economy.

Full details of the documents

Proposal for a Regulation on cross-border parcel delivery services: (37821), 9706/16 + ADDs 1–6, COM(16) 285.

Background

5.8The current EU regulatory framework for postal services was agreed in 1997. It is focused on guaranteeing a basic universal postal service.65 Most of its provisions are only applicable to the small part of the parcel market which falls under the universal service obligation (around 10% of parcel volumes according to the Commission). The Commission indicates that, even for cross-border parcel delivery services that are part of the universal service, concerns have been expressed that these services are not affordable in the sense intended by the Directive. Nor does the Directive address the transparency and regulatory oversight issues that have arisen in the parcel delivery market.

5.9Goods represented over half of EU e-commerce purchases in 2015. Of e-commerce purchases, 30% were bought from sellers in other Member States. Large enterprises tend to sell both more online and across borders than small and medium sized enterprises, which rely more on national postal operators than other providers. A 2015 Eurostat survey concluded that high delivery costs were perceived by businesses as the most serious single barrier to cross-border e-commerce.66

5.10The Commission’s 2012 Communication on e-commerce67 identified improving the physical delivery of goods ordered online as one of the key elements for e-commerce growth. Subsequently, its 2013 Parcel Roadmap set out various actions68 but, despite some improvements, the Commission considers that further measures are need to improve both price transparency and regulatory oversight. This is because the prices for some cross-border services are still high and not all national regulatory authorities have the ability to collect the data needed to monitor the evolution of parcel markets.

Commission proposal

5.11The Commission proposal includes the following elements:

5.12The Commission explains that EU-level action is required because:

“Cross-border delivery by its very nature involves delivery services in more than one Member State and therefore cannot be overseen by national regulatory authorities acting independently of each other and without information about the cost of delivery in other Member States.”

5.13It concludes in Recital 25 of its proposal that improvement of regulatory oversight and price transparency cannot be sufficiently achieved by Member States acting alone and can therefore, by reason of scale and effect, be better achieved at EU-level.

Minister’s Explanatory Memorandum of 15 June 2016

5.14The Minister is supportive of EU-level action, noting that: “the establishment of a clear and harmonised framework of cross-border parcel delivery services within the EU will require action at EU level and cannot be achieved by Member States on their own”.

5.15The Minister re-asserts the Government’s previously stated policy of support for the digital single market alongside a continued focus on better regulation and evidence based policy making.

5.16The Minister draws attention to the position set out by the Government in January 2016. In summary, she says, this stated that:

“the Government believes that cross-border parcel delivery plays a key role in facilitating the digital economy and building the single market, and considers that the proposed Regulation should help:

5.17The Minister indicates that the Government will be considering the detail of the proposal in the light of its earlier stated position. She explains that a more detailed assessment of the initiative is currently under consideration and an update will be submitted to Parliament in due course.

5.18In terms of consultation by the Government, the Minister says that officials have met and corresponded with key stakeholders such as Royal Mail, Ofcom, Association of International Courier and Express Services (AICES), the Mail Competition Forum (MCF), the Federation of Small Business, Which? and the Competition and Markets Authority (CMA). They will, says the Minister, continue to do so throughout the negotiation process.

5.19Concerning the Impact Assessment, the Minister observes that the Commission’s Impact Assessment contains an assessment of the costs and benefits of the proposal to business and consumers. A UK Impact Assessment Checklist covering the proposal is annexed to the EM.

Previous Committee Reports

None.


65 Provided in the UK by the Royal Mail.

66 “E-Commerce in Europe: parcel delivery prices in a digital single market”, Bruegel policy contribution, May 2016, www.bruegel.org.

67 COM(11) 942.

68 COM(13) 886.

69 Payments from the originating universal service provider to the destination universal service provider for the costs of cross-border parcel delivery services in the destination Member State.

70 Assessment of affordability will include domestic price comparison and any application of a uniform tariff to two or more Member States, regardless of the specific costs incurred.




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11 July 2016