“Ecommerce Europe used its position as Chair of the UPU Consultative Committee to overcome the distortion in the global postal network, re-establishing a level playing field to the benefit of the wider e-commerce community”, says Walter Trezek, Chairman of the UPU Consultative Committee, and Co-Chair of the e-Logistics Working Group of Ecommerce Europe.
Postal item flows have fundamentally changed over the past years and the global postal network adapted the rates and service definitions accordingly, starting in 2018.
Large volumes of low weight, commercial letter post items, use tariffs subsidising the delivery for letter items sent from less developed countries. When the tariffs for letter mail were designed more than a decade ago, the tariffs reflected the delivery of documents (any piece of written, drawn, printed or digital information) but not the delivery of inhomogeneous commercial goods. Commercial goods or merchandise need a “parcel delivery like” handling, including a tariff reflecting the higher cost per item, compared to document letter post.
Applying document letter post tariffs to commercial letter post items, sent from postal territories qualified as less developed countries, led to a competitive disadvantage of European e-commerce vendors. In some cases, the tariffs applied abroad were even lower than domestic tariffs for the last mile delivery.
As of 2018, the new global cross-border rate system of the Universal Postal Union (UPU) will introduce a distinction between document letter post items and commercial letter post items containing objects of merchandise. Any cross-border letter post containing goods or merchandise will be qualified as a “small packet” as of 1 January 2018. Compared to document letter post, the tariff for small packets consists of a more than doubled handling rate per item, but a lower rate per kilo. Both the per item and the per kilo rate add up to the tariff for last mile delivery, payable to the postal operator in the destination country.
From a practical point of view, today a commercial letter post item, weighing 42 grams (i.e. a mobile telephone cover), would cost approx. € 0,40 under the current remuneration fee system between postal operators. In 2018, such an item will be qualified in a different product and service category (the “small packet” or e-format) and will cost approx. € 0,70. Moreover, the fee for registering letter post items without specified content will be increased by approx. 80%, in order to prevent any bypassing.
In addition to the change in the product, service and tariff definitions, it will be mandatory to apply a UPU barcode (S10) to any commercial letter post item (any “small packet”) from 2018 onwards. The reason behind this is that cross-border commercial items are subject to VAT, GST or even customs procedures. Currently, it is a challenge for authorities and operators to evaluate the content and the proper handling of duties and customs, including transport security issues.
About the e-Logistics ALERT
Ecommerce Europe is engaged in overcoming cross-border hurdles for e-commerce. The Ecommerce Europe e-Logistics ALERT is designed to inform the wider e-commerce stakeholders about important developments and achievements in matters relating to European and worldwide e-logistics.
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