New parcel law receives a lot of criticism: “Customers pay more and companies go bankrupt”

1. “This law makes shipping parcels more expensive for consumers”

This is what Roel Gevaers, professor and transport economist at the University of Antwerp, says. “Parcel suppliers will have to make additional investments in IT systems to monitor whether couriers adhere to the maximum number of agreed hours,” says Roel Gevaers. “And they may have to employ extra drivers, because under the new law a driver is no longer allowed to deliver as many parcels as today. I estimate those extra costs at 15 to 25% per package. The cost increases will largely be passed on to consumers. If the shipping costs are supposedly free, the price of the product will be increased.”

2. “Many jobs will be lost due to this law”

The statement comes from Michael Freilich of the opposition party N-VA. “The parcel companies will not be able to fully pass on the extra costs to their customers, which means they will make less profit,” says Freilich. “The problem is that many of those companies today already have very low profit margins, so that those margins can even become negative and companies go bankrupt or leave the sector, which also means jobs disappear. Foreign companies can benefit from this. In principle, they must also comply with the Belgian parcel law, but it is very difficult for Belgian inspectors to check the couriers’ contracts at a foreign head office.”

A top executive of a large parcel company confirms in an email that many companies are in danger of going under due to the new parcel law. “Some things in the law are not feasible and other things cost us so much money that our company is destroyed,” says the CEO. “We have never been heard by the minister. But soon we will be slaughtered. We are now considering how we can have that law annulled.”

Minister Petra De Sutter provides nuance. “Companies that practice social dumping, exploit their people or employ them illegally will indeed find it difficult because of this law,” she says. “Their profit margins will shrink. But do we want parcel companies to make high profits at the expense of their couriers? No.”

3. “There is no guarantee that couriers’ working conditions will improve”

That’s what Roel Gevaers says. “The big problem with this new parcel law is that it is complex and difficult to enforce,” he says. “It will be very difficult for the government to determine that a courier has earned too little or worked too many hours. How will inspectors check the thousands of subcontractors in the parcel sector every day?”

Petra De Sutter says that parcel companies will be checked on the basis of an IT system. “Inspection services will check whether the couriers are really registered in the system,” she says. The minister’s environment points out that 140 additional social inspectors will be recruited this autumn, across all sectors, so not just for couriers.

But there are serious doubts in the sector about the effectiveness of the inspectors. “The current law is actually sufficiently strict,” says Philippe Degraef, director of Febetra, the federation of transport companies. “But no checks are ever carried out. The inspectors of the FPS Mobility say that they do not know enough about cost price calculations and the inspectors of the FPS Economy say that they know too little about transport.”

Couriers would receive a minimum wage under the new law. But this measure should also be taken with a grain of salt, says the Belgian Institute for Postal Services and Telecommunications (BIPT), the body that monitors the proper functioning of the postal sector. “We assume that the current compensation paid to parcel deliverers is already above the proposed minimum compensation,” BIPT says. “In addition, the minimum wage will be calculated on an eight-hour working day, while many couriers today work many more hours per day,” adds Professor Roel Gevaers.

“And then there is something else,” says Gevaers. “Some couriers not only deliver parcels, but also do logistics for companies, and the Parcels Act does not apply to logistics. If a van contains both consumer parcels and company pallets, which law does DHL have to comply with? The law creates a lot of uncertainty.”

4. “Bpost is unfairly advantaged”

That’s what Michael Freilich says. “Bpost largely falls outside the new parcel law, because the company only works with independent couriers to a limited extent,” he says. “Bpost does not have to provide an extra IT system or extra drivers, but it can increase its prices for parcel delivery because its competitors are doing the same. This simply increases Bpost’s profits, while that company is already heavily subsidized by the government. Bpost becomes the mastodon in this story and almost gets a monopoly.”

Petra De Sutter points out that Bpost will also have to step up its game. “For example, Bpost engages subcontractors during the Christmas period. If those companies exploit their couriers, Bpost will be held responsible.”