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News & Press: International Trade News

Government considers e-commerce delivery levy to control emissions following online purchasing spike

29 June 2020   (0 Comments)
Posted by: William Barns-Graham
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Ecommerce could be hit by a new levy on delivery costs in a bid by government to control emissions and congestion.

A report from scientific advisors to the Department for Transport (DfT) suggested a “mandatory charge” on online purchases comparable to the plastic bag tax introduced by government in 2015.

The Times reports that the government is “considering a range of measures to reduce the damaging impact of the e-commerce boom, which has led to a rise in delivery vans on British roads.”

The report said free and next-day delivery was causing “unnecessary over-ordering” and the charges would “encourage more sustainable behaviour”.

The report mentions the example of people ordering clothes online to try on at home before sending them back to the retailer, with no charge for the deliveries.

Alternative: charge the retailer

An alternative to a consumer tax would be to introduce a levy on e-commerce retailers when they pay for logistics providers, according to Ashley Cooke, an Amazon specialist for Clickthrough Marketing.

Cooke argues the retailer would then have the option of whether to pass that charge onto the consumer or not.

Amazon dominance

A potential side-effect of a levy on consumers would be to further enhance Amazon’s dominance in the market.

He argues Amazon “controls so much of its logistical infrastructure” that it could “absorb additional costs in a way that smaller retailers would not be able to do”.

Cooke also said Amazon’s locker programme could be exempt from the scheme as it is not used to deliver goods to the user directly.

Plastic bag example

The plastic bag tax – to which this new e-commerce tax proposal has been compared - was launched in 2015 and has proved largely successful.

The number of bags littering the seas around the UK fell sharply in the year after it was introduced, the Times reports.

The tax was initially set at a minimum of 5p for each carrier bag sold by a large retailer. The government has since considered doubling the tax and extending it to retailers of all sizes.