CLS explains simply: Decline of postal cross-border volumes: extent, causes, backround (Part 2)

In Part 1 we saw how the postal #UPU channel has lost around 2/3rd of its #volumes (commercial items & parcels), while total cross-border #ecommercevolumes #growth has effectively remained at pre-pandemic levels. This #volumedecline has been analyzed in detail at #UPU level, and several key #developments („shocks“) identified. From today’s perspective, the most relevant #causes of this decline in volume are:

–#COVID-19 pandemic (February 2020)
-Adjustment = increase in UPU #tariffs (July 2020)
-EU VAT Ecommerce Package (July 2021)

𝗪𝗵𝘆 𝘄𝗮𝘀 𝘁𝗵𝗲 𝗨𝗣𝗨 𝗺𝗮𝗶𝗹 𝗰𝗵𝗮𝗻𝗻𝗲𝗹 𝗵𝗶𝘁 𝗵𝗮𝗿𝗱𝗲𝗿 𝘁𝗵𝗮𝗻 𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗶𝗮𝗹 𝗰𝗵𝗮𝗻𝗻𝗲𝗹𝘀?

Although the pandemic effectively hit all #delivery channels equally hard, this outcomes differed. The postal #channel suffered most because cross-border #mail#transport is highly dependent on passenger aircraft which stopped operating. #Commercial #operators, in contrast, either used #cargo #aircraft which continued to #operate, or were able to build new #capacity more quickly.

However, it was the #increase in UPU tariffs together with the EU #VAT Ecommerce Package which had a more significant #impact. Within just one year, #prices in the UPU #channel effectively went up three times:

1. The UPU raised its item/kilo rates significantly and permanently.
2. The EU VAT Ecommerce Package led to a further #price increase. In #Europe (by far the largest #import market, together with the #USA), the UPU channel was used primarily for lightweight, low-value #consignments. As soon as import VAT began to be charged for all consignments, this channel became significantly more expensive for the #consumer.
3. Although the import #VAT charges also affected commercial operators, there was also the #issue of #customs #duties. The postal channel has traditionally relied heavily on #delivery #duty unpaid (#DDU) but, prior to the introduction of the EU VAT Ecommerce Package, no #fees were incurred or collected. From July 2021, #postal operators in the EU were now required to #collect these fees. In most cases, postal operators charged very high collection fees, making the overall #delivery price prohibitive, particularly for low-value consignments.

In #summary, the UPU postal channel became much more #expensive due to the interplay of these 3 factors, with the low average value of the goods making the #impact particularly keenly felt.

(𝘛𝘰 𝘣𝘦 𝘤𝘰𝘯𝘵𝘪𝘯𝘶𝘦𝘥 – 𝘗𝘢𝘳𝘵 3: 𝘵𝘩𝘦 𝘭𝘰𝘴𝘦𝘳𝘴 𝘢𝘯𝘥 𝘸𝘪𝘯𝘯𝘦𝘳𝘴 𝘰𝘧 𝘵𝘩𝘪𝘴 𝘥𝘦𝘷𝘦𝘭𝘰𝘱𝘮𝘦𝘯𝘵)