EU signals contracting e-commerce volumes

For years, there was only one trend: the number of e-com shipments imported into the EU grew at a double-digit rate. Since the elimination of the 150-euro duty-free threshold and the introduction of a 3 EUR customs fee per product category, the number of small shipments from third countries – especially from China – has been declining. This downward trend is likely to continue because of additional rise in price.

Since 01NOV, each e-com shipment from the Far East or the U.S. arriving in the EU and belonging to the same product category costs 5 EUR. In case a parcel contains different products, like shoes combined with toys, additional 3 EUR service fee have to be paid. The price hike is expected to lead to further volume contractions reducing the longstanding e-Com tsunami notably. Since the extra service fees of 2 EUR have only been introduced on 01NOV26, ground handlers belonging to his organization still lack data evidencing a consolidation of the downturn, Claus Wagner, chairman of the Association of German Air Cargo Handlers (VACAD) notes.

Times have changed: In the past, the e-commerce shopping cart used to be full – illustration: courtesy of TIACA

Belgium is hit by sharp volume losses

In Brussels, Kristian Vanderwaeren, Director General of the Belgian Customs Administration, cites a figure from previous months: Since 01JUL26, when the 3 EUR charges were introduced, 80% fewer small packages from non-EU countries have been handled at Belgian airports. Customs office in Liège – Belgium’s largest cargo airport – reports a 51% decline in customs declarations from 01JUN26 to date.
While e-commerce is becoming more expensive for sellers and consumers, EU governments are benefiting. For instance, the Belgian state. 360 million EUR have been added to the national budget since JUN26, thanks to the levies. These funds will be invested in people by hiring additional customs officers, Chief Customs Officer Vanderwaeren announces.

Who pays the bill?

Economic research institutes say that the customs and service fees of 5 EUR are reducing imports of low-cost products but will not fundamentally change the business model. Despite the cost hike, roughly 5 million packages from third countries still arrive at European airports every day. Even with automation and digitization, it is still virtually impossible to fully monitor this volume, says Anna Cavazzini of the Greens/EFA Group in the European Parliament, a member of the Committee on the Internal Market and Consumer Protection.
Market observers expect that the additional costs will be passed on directly to end consumers through higher product prices or surcharges levied by Temu, Shein, Alibaba, or AliExpress sooner or later. Since profit margins in the low-price segment are extremely slim, full cross-subsidization by the online platforms is rather unlikely.

Competition between airports tends to grow

What is becoming apparent, however, is that online retailers are increasingly turning to fulfillment centers within the EU to avoid customs duties and the new handling fee.
In addition, due to lower volumes while costs remain unchanged, competition among EU airports will intensify as they seek to secure the largest possible share of the e-commerce pie. Some market experts even speak of impending cutthroat competition.
This particularly challenges Frankfurt, Leipzig, Cologne, Hahn and Munich. Because “word has long since spread throughout the industry that German customs officials inspect imported goods very meticulously. The regulations and procedures at the airports are very strict,” says VACAD chief, Claus Wagner.

Does flexibility beat accuracy?

Conversely, this implies that other airports proceed differently. The outcome: Due to laxer inspections, counterfeit goods are not always detected, this also applies to toys whose components may pose a health hazard to children. Wagner does not name any site, but he notes that at some airports in the EU, customs officials are a bit more lenient when it comes to inspecting goods. Furthermore, he notes that the customs clearance processes for imports in Belgium or Hungary, to name but two countries, are significantly simpler, less expensive and performed more quickly compared to Germany. Wagner does not want this to be interpreted as a plea for laxer controls in Germany. Rather, the aim is to standardize procedures and standards across all European locations. Since flight routes are determined by shippers, who opt for the cheapest and fastest options, FRA, MUC, LEJ and Co. are seldom their first choice. Combined with favorable rates for airlines and lower fees charged by ground-handling agents, this represents a competitive advantage over those airports where customs officials strictly adhere to EU regulations when clearing e-commerce shipments.

spot_img
spot_img
spot_img

LEAVE A REPLY

Please enter your comment!
Please enter your name here

See Also

KLM Cargo ousts external handling

As KLM is looking to slim down its organization to boost its margin, it is planning a 15% cut in personnel. Approximately 5,000 positions...

Nigeria’s air cargo: Beyond the Single Window

Nigeria’s National Single Window (NSW) has processed 3,596 electronic air cargo manifests submitted by 27 airlines since its operational launch in MAR26. The figures,...

Glasgow Prestwick Airport preparing for Nanjing connection

After Ürümqi (URC), Guangzhou (CAN), Chengdu (CTU), and Shanghai (PVG), Nanjing Lukou International Airport (NKG), Glasgow Prestwick Airport (PIK) is now in talks to...