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TMCNet:  Personal finance: When courier companies fail to deliver: As online shoppers demand ever cheaper postal and package, unregulated services are undercutting Royal Mail. However, Anna Tims finds that cheap often comes at a high price

[April 06, 2014]

Personal finance: When courier companies fail to deliver: As online shoppers demand ever cheaper postal and package, unregulated services are undercutting Royal Mail. However, Anna Tims finds that cheap often comes at a high price

(Observer (UK) Via Acquire Media NewsEdge) When a coach passenger mistook John Rodger's suitcase for his own, it looked like a temporary inconvenience. The passenger realised his mistake, found Rodger's contact details and arranged to have the case couriered to his home in Scotland.


Ten days after it was collected by delivery firm Hermes, a small package was flung through Rodger's letterbox and the van drove off without waiting for a signature. The parcel bore the original label recording the 14kg weight of the suitcase, but the only thing inside was a bottle of lavender oil.

"It seems pretty obvious that the case has been stolen and this bottle bizarrely substituted," says Rodger's mother Una. "A signature appears on the tracking information on the website and we are dependent on the other passenger to claim for the pounds 300-worth of possessions." Hermes is investigating, but its spokesperson sympathises with the driver: "The delivery driver did not knock on the door for a signature because the parcel was small enough to post through the letterbox - not ideal, I know, but understandable, I think." The twist in this tale is unusual, but the substance is not. Since the ending of Royal Mail's monopoly on parcel delivery, numerous courier companies and delivery brokers have moved into the market and competition is fierce.

These cheap services are unregulated. Hermes, along with rival Yodel, were ranked the UK's worst parcel delivery services earlier this year in a survey by MoneySavingExpert. More than half of customers who had had goods delivered by Yodel rated their experience as "bad", yet it is used by retail giants such as Amazon, Argos and Tesco Direct because its cheap rates enable them to keep delivery charges to a minimum. This works well when all goes smoothly. But if it doesn't, customers may find themselves powerless, for the courier's contract is with the sender, not the recipient, and only the sender can issue a claim.

Under the Sale of Goods Act it is the seller's responsibility to ensure that items reach the purchaser within reasonable time and in satisfactory condition, and most retailers will offer an immediate refund then battle it out with the delivery firm; some, though, blame the courier and absolve themselves.

Recently, The Observer heard from a reader whose newly purchased vintage guitar ended up in the bin when a Yodel driver failed to deliver it properly. Yodel's first response was to tell them to contact the seller for reimbursement, while eBay told them to contact the courier. Some tell of items flung over hedges or left with fictional neighbours. Others have found "You were out" cards when they had been waiting in for a delivery.

Both Yodel and Hermes use self-employed drivers who pay for their own fuel, and vehicles and work unlimited hours. Since they are paid per parcel, rather than a daily rate, it's unsurprising if some are tempted to dump a delivery and speed on to the next destination.

Hermes and Yodel say they complete millions of deliveries each year without a hitch and both deny they seek to undercut rivals. "We have developed the low-cost service to meet market demand driven by consumers wanting free delivery," says a Yodel spokesperson.

"It is our aim to win contracts with large retailers. However, we do not seek to do this at the expense of our couriers or the agencies we work with, and all our deliveries are supported by our sophisticated systems that check parcels are delivered to the correct location." Hermes claims it successfully delivers 2m parcels a year and regularly achieves a 95% first-time delivery rate.

However, BritORA, the British Online Retailing Association, calls the system a "wild west" and wants companies to sign up to a code of practice. "It's only right that logistics companies are held to account," says director Adrian Quine.

Most of these firms will refuse to deal directly with the recipient if something goes wrong because their contract is with the sender.

John Platt, a retired judge, points out that the Contracts (Rights of Third Parties) Act 1999 gives a buyer a direct right of action against a courier provided the goods are delivered from and to an address in the UK, and the buyer is named in the contract as he usually will be as the person to whom the goods are to be delivered.

Lawyers at Which? are less sure because the act allows companies to opt out of third-party rights and most delivery firms take advantage of that.

A safer bet is the Distance Selling Regulations which allow customers to cancel an order within seven working days of receiving most types of goods provided they were ordered online or over the phone. If the goods don't show, or arrive damaged, you can demand a refund from the seller.

None of these rules or regulations would be of help to Rodger and his missing suitcase since there was no commercial relationship between sender and recipient. In his situation only the sender can apply for compensation and this particular sender hasn't bothered.

Happily, Parcel2Go, the broker which organised the delivery, has offered him pounds 300. "After all my efforts in negotiating kept hitting the same brick wall," says Una Rodger. "It's a shame that big companies do not feel obliged to rectify problems until confronted with the might of the press." Captions: Retail giant Amazon is just one of the major online retailers using Yodel to deliver its goods - but more than half of Yodel customers rated the service 'bad'.

Getty Images/ Daly & Newton (c) 2014 Guardian Newspapers Limited.

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