Shoppers must say ‘No’ to new minimum charge on home deliveries, says ParcelHero

This article is brought to you by Retail Technology Review: Shoppers must say ‘No’ to new minimum charge on home deliveries, says ParcelHero.

The Government is planning to consult the public about a new standard delivery charge for home shopping. Just like the plastic bag fee in supermarkets, it aims to discourage overuse of consumer deliveries by making shoppers think again. ParcelHero argues the plan is actually a ploy to replace lost business rates income and that home deliveries – the consumer’s saviour during lockdown – are far greener than shopping by car.

Following this month’s report by the Department for Transport (DfT) Science Advisory Council on home deliveries, the Government is planning to ask the public and retailers for their views on the introduction of a charge on home deliveries. The DfT’s ‘Position Paper on Last Mile Logistics’recommends: ‘A mandatory charge, similar to that implemented by the government to discourage plastic carrier bag use, could be applied to all consumer deliveries and returns to encourage consumers to recognise their true business, societal and environmental cost, and hence encourage more sustainable behaviour.’

The home delivery specialist ParcelHero says the new delivery tax is likely to be considerably more expensive than a 5p carrier bag, however. Speculation within the industry suggests it will be at least £2 per delivery or 3% of the value of the average overall UK online order of £62, in order to have an impact on consumer behaviour. Says ParcelHero’s Head of Consumer Research, David Jinks MILT:

‘The Government’s expected consultation with consumers follows a questionable DfT paper on the impact of home deliveries. The report was remarkably well-timed for a Government facing a drastic loss of income from business rates, which clawed in £25bn a year before the epidemic hit. This amount has been slashed because of emergency coronavirus rates relief on retail premises.

‘In April, the Government quietly introduced its new 2% Digital Services Tax on the UK earnings of large online marketplaces, social media platforms and search engines, which is likely to rake in £440m. Obviously, that still leaves a massive shortfall in lost revenues and the Government clearly wants a second bite of the e-commerce cherry – this time directly out of the pockets of Britain’s beleaguered shoppers.

‘It’s hard to believe that the Government has chosen such a sensitive time to start planning a home delivery charge. While the coronavirus remains such a significant threat, it amounts to little more than a tax on the frail and elderly, many of whom have just started shopping online for the first time to shield themselves from the impact of the pandemic. Our town centres remain quiet while people avoid using public transport and entering crowded spaces, meaning that some specialist stores that have reopened are often only seeing five or six visitors a day. Their web sales are keeping them afloat and a new delivery charge could sink them.

‘It’s significant that e-commerce grew by 60% during lockdown but, at the same time, NO2 emissions across UK cities were cut by as much as 50% in the first few days and dropped even further in the weeks following lockdown. Nonetheless, the DfT Science Advisory Council claims that home shopping, by  ‘increasing demand for immediate delivery of consumer and commercial products, risks adding to the severity of traffic congestion’. The paper suggests a variety of long-term and short-term solutions to the perceived impact of home deliveries. 

Buried among futuristic plans for robot vehicles, drones, tunnels with cargo pods and ‘neighbourhood 3D printing manufacturing sites’, is the suggestion of a compulsory charge on all home deliveries. The report recommends that ‘ the public is consulted about imposing a standard minimum delivery charge’.

‘The DfT’s consultation paper discuses the recent growth in home deliveries and van miles, but fails to consider whether the end of free deliveries would result in shoppers simply climbing back into their cars to shop in town. The environmental impact of that would be disastrous. In fact, there is strong evidence that, far from having an ‘environmental cost’, home deliveries are significantly more environmentally friendly than traditional visits to the High Street.

‘In fact, a number of major studies have concluded that successful, first-time home deliveries of non-food products generate significantly less grammes of CO2 per kilometre than a dedicated car shopping trip. The highly regarded 2009 academic report ‘Carbon Auditing the “Last Mile” ‘ found that a dedicated car trip for a specific item produced as much as 4,274 grammes of CO2 per km. In contrast, a successful, first-time home delivery creates just 181 grammes of CO2 per km per parcel.

‘The DfT’s new paper is particularly critical of people ordering clothes online to try on at home before sending them back to the retailer, with no charge for the returns . We agree this is unsustainable for smaller online businesses and produces unnecessary journeys. The large e-commerce retailers who encourage this should introduce an extra fee for their try-on-at-home ‘wardrobing’ services.

‘Introducing a flat fee, however, on all home deliveries is using a sledgehammer to crack a nut. If the Government does reach out to the public, we should all be firm in rejecting the idea. The Government surely cannot believe shoppers are this ‘green’ about green issues. Consumers will rightly see a new charge on home deliveries as an unconvincing excuse to fund business rate reductions by making shoppers pay taxes twice.’