The European Commission is currently considering an update of the European postal regulation, currently consisting of the Postal Services Directive (PSD)1 and the Cross-border Parcels Regulation (CBPR). The overall aim is to ensure that it reflects current and future market dynamics, taking into account important developments in recent years, such as the decline of letter volumes, the
growth of e-commerce, and the emergence of new business models.
As part of its modernisation and harmonisation efforts, the Commission also appears to be considering whether different types of delivery providers – beyond postal and parcel delivery operators –
should fall within the scope of postal regulation. Such an inclusion would have potential implications for reporting requirements and other compliance with postal sector rules.
Against this backdrop, Delivery Platforms Europe (DPE), an association representing local commerce platforms operating in Europe, has asked Copenhagen Economics to compare and contrast
the services and operations 5 of local commerce platforms with postal and parcel delivery operators as regulated under the current EU framework, and to assess whether including local commerce platforms in the scope of postal regulation is necessary to achieve the five policy objectives outlined in the Call for Evidence.
First, local commerce platforms offer a service that is different from postal and parcel delivery operators, as well as vertically integrated e-commerce providers. In contrast to some other delivery
providers, local commerce platforms do not provide delivery of regular postal items, i.e. letters or parcels that are packaged and addressed, but instead offer on-demand delivery of ready-to-eat food,
groceries, and other retail items. While some other delivery providers have national networks, local commerce platforms provide delivery services only in hyper-local settings, where both sender and
recipient are in close proximity. Furthermore, local commerce platforms provide mainly business-to-consumer (B2C) deliveries and have no cross-border services. In fact, the service of local commerce platforms is more comparable to when restaurants offer their own delivery.
Second, local commerce platforms have operations that are different from postal and parcel delivery operators, as well as vertically integrated e-commerce providers. The operations of a postal and parcel delivery operator include clearance activities (collection of postal items from senders, often in large volumes), sorting in a sorting centre facility, transport from the sender’s area to the recipient’s area (often over long distances, potentially across borders), and distribution (another round of sorting, followed by delivery to a pick-up point or to the doorstep). The operations of vertically integrated e-commerce providers also include some of these activities, such as fulfilment (packing, addressing, and dispatching of items), transport from the sender’s area to the recipient’s area, and distribution. In contrast, the operations of local commerce platforms simply consist of pick-up (a form of ‘collection’ although not of postal items and only of individual items) and delivery – with no clearance, sorting or transport.
Third, including local commerce platforms in the scope of the new EU Delivery Act is not necessary to achieve any of the five stated policy objectives in the Commission’s Call for Evidence. Namely, it would not improve the financial sustainability of the USO and would not address the European Commission’s concerns in postal markets.
Well-designed regulation should be problem-driven, proportionate to the harms identified, and targeted at the activities that give rise to those harms. Against this benchmark, extending postal regulation to local commerce platforms would be disproportionate. The inclusion could introduce undue administrative burdens, unintended distortions in an evolving market, and overlapping regulatory
obligations. Imposing a “one-size-fits-all” framework on such different business models would likely generate extra compliance costs compared to entities originally targeted by the regulation and create the risk of duplication. This would increase rather than reduce administrative burden, running counter to the aim of simplifying and clarifying the rules.
This report was commissioned by Delivery Platforms Europe.
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