Fairer parcel deliveries: action plan

Actions

We will develop an interactive data hub to allow users to measure the fairness of delivery pricing to improve transparency and drive behaviour change

To address unfairness, we must have an assessment of what it is. It is easy to recognise it in extreme cases. However, the extremes do not represent the whole spectrum of varying delivery charges. At present, there is no definitive research to help identify which price differences are objectively fair. This increases the challenge of driving substantive change, and makes it more difficult for consumers to differentiate between reasonable and unreasonable charges.

The Scottish Government will therefore commission independent econometric research to establish what constitutes a fair delivery charge in remote and rural areas of Scotland. We will use this to develop an easy-to-use online hub that will allow anyone to establish if a delivery price is outwith what should reasonably be expected. This will provide transparency to consumers, retailers and delivery companies, and will ensure that action to drive change is focused on the right solutions to the right problems.

This research will be commissioned in early 2019, and hub development will begin later in the year.

We will develop the Scottish Parcel Delivery Map to understand consumer experiences and target interventions

Our unfairness assessment will be matched by a real-world picture of delivery prices across Scotland. We will develop the Scottish Parcel Delivery Map to allow us to track both discrepancies between and within geographic areas, and to identify where there are significant deviations from either the average or from prices that can be justified. The map will be a powerful tool for pinpointing unfair delivery charge hotspots. As a publicly available resource, it will help regulators, consumers and retailers to pinpoint and target unjustified pricing.

Creation of the map will be driven by those who experience unfair delivery charges first-hand – consumers. We will use Fair Delivery Day, 26 November 2018, to launch a crowdsourcing website to capture experiences and begin the process of analysing and assessing the data alongside other factors, such as population spread and proximity to major roads, to help both policy makers and consumers understand whether charging discrepancies are fair.

We will launch the Scottish Parcel Delivery Map by summer 2019.

We will work with industry to explore how to increase the impact and reach of the Statement of Principles

Eradicating unfairness in the parcel delivery market requires commitment from retailers. To support this, a Steering Group, of which the Scottish Government was a member, developed a Statement of Principles in 2013, which the UK Government subsequently adopted. The principles set out good practice for retailers to follow, which included a principle of objective justification to underpin costs, and clarity for consumers on what to expect upfront.

While these principles served as an important first step in promoting good practice, we acknowledge that we must now do more to drive behaviour change. The principles must be supported by a programme of action to increase awareness of them among retailers, and couriers must also be better supported to adhere to best practice.

The Scottish Government therefore commits to a programme of work to:

• raise awareness of the principles among retailers;
• develop the principles into a simple pledge that retailers can sign up to; and
• explore how the principles can be more usefully applied to parcel couriers.

This programme of work will begin in spring 2019 and progress will be made
throughout the remainder of the year.

We will celebrate best practice by retailers and parcel delivery companies

We recognise that consumers and retailers have choices about how they spend their money, and that these choices can also encourage good practice. A key aim of this plan is to empower consumers and small businesses, and to help them to reward those companies that do the right thing and treat people fairly. This will only be possible if there is robust and reliable information available to help consumers and small retailers identify which companies routinely display good delivery practices.

The Scottish Government will publish an annual review to demonstrate the progress being made by us, our CPP partners, retailer and delivery companies to tackle unjustified or misleading delivery charges, highlighting both good and bad practice where appropriate. This will send a strong message to all businesses on the Scottish Government’s commitment to tackling rural parcel delivery issues.

The first statement will be published in November 2019.

We will make it easier for consumers to know and exercise their rights

Supporting consumers to identify trustworthy and reputable companies is important, but it will not put an end to unjustified charges or practices. Consumers must have easy access to up-to-date information on their rights, and clear guidance on action to take when things go wrong.

To make it easier for consumers to know their rights we will:

• raise awareness of www.deliverylaw.uk, which supports consumers to know their rights and to make complaints; and
• work with other resolution services to improve the complaint process for consumers who have unreasonable parcel delivery experiences.

We will improve the accuracy of postcode classification tools

There are some differences in pricing and practices between rural and urban areas which can be justified as long as they are transparently explained to consumers. However, some higher prices are caused by misclassifications of easily accessible locations as rural or remote, and this is unacceptable. At present, postcode software often uses only the first half of the postcode to identify locations, which is why some urban areas, such as Paisley, are considered rural, and some areas in Perth are denied delivery altogether because they are considered too rural. Retailers and delivery companies cannot override these classifications, even if they realise they are wrong.

Addressing this issue is a complex task, requiring co-operation from commercial interests. However, the complexity of the task must not deter us from action. We will work with users and providers of postcode classification software to understand the cause of these discrepancies, and act to address them.

We commit to improving postcode accuracy by the end of 2019.

We will establish the Improving Consumer Outcomes Fund to explore new approaches to tackling long-standing consumer issues, including misleading and unfair delivery charges in rural and remote areas of Scotland

Consumer fairness matters because without it, consumers lose trust with businesses and public institutions, which can adversely affect both our economy and society. There are longstanding consumer issues, such as parcel deliveries, which are both the most difficult to solve and most likely to lead to this breakdown in trust. The Scottish Government’s new consumer body will be the cornerstone of an approach that seeks to overcome this by proposing practical solutions. To succeed, it must also be supported by a wider commitment to trial new ideas and foster innovation.

The Scottish Government will therefore pilot a new fund – the Improving Consumer Outcomes Fund – to test creative and innovative solutions to tackling long-standing and detrimental consumer issues. The parcels problem will be one of the first trials of the fund.

Already, the roundtable in June highlighted a number of options that could be trialled. These include:

• a business-to-business platform to match delivery companies that have spare vehicle capacity with retailers that ship to or from remote and rural areas in Scotland;
• a distribution hub or network of hubs based in the Highlands of Scotland, which retailers, delivery companies and consumers could all access and benefit from; and
• expansion of the Pick Up Drop Off^[4] network in Scotland to allow consumers and businesses the flexibility to collect and drop off parcels at more convenient locations and times.

We recognise that each of these has merits and challenges, and that they do not represent the full range of possible solutions. In advance of the fund’s launch, we will involve expertise from across Scotland to identify the initiative with the greatest potential to improve parcel deliveries to remote and rural Scotland.

We will launch the Improving Consumer Outcomes Fund during 2019.

We will shape UK Government action to further strengthen consumer protection in relation to fair and transparent delivery charges for Scottish consumers

We will continue working as a partner in the Consumer Protection Partnership ensuring that Scottish specific needs are heard and acted upon.

However, the power to regulate parcel surcharging lies with Westminster, so we will also continue to apply pressure to the UK Government to deliver much needed fairness in cases where the regime of charges discriminates against communities in Scotland.