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Online Commerce Choked by Shipping Delays

Foreign-based Internet shopping sites are drawing increasing numbers of Russian consumers looking for deals, but as delays mount at the country's notoriously inefficient postal service, many are finding that securing delivery of their items is no simple task.

Complaints have surfaced over the past several weeks that internationally shipped packages from popular online shopping sites such as eBay are taking an inordinate amount of time to reach their destination in Russia.

"It seems as though packages have stopped moving altogether since the New Year's holidays," said Alexander, an avid online shopper who keeps a popular blog on the subject at http://t-itanium.livejournal.com.

"I have convinced two people to sell to me, though they were against shipping to Russia, and now their worst fears have been realized — two months later I am still waiting," he said by telephone, requesting that his last name not be used.

Internationally posted letters and parcels are supposed to be delivered via Russian Post within 13 and 20 days, respectively, according to the company's web site. EMS Russian Post, its express subsidiary, says parcels must be delivered within two days from most European countries and three days from the United States, but parcels delivered by EMS post have also been missing for weeks, shoppers said. And the packages' electronic tracking system indicates that the delays are happening on both sides of the customs posts, Alexander said.

But there is some evidence that part of the problem may be holdups in customs processing. Well-known international carriers such as UPS and DHL have seen the amount of time it takes to process packages at customs recently increase to 10 days from the standard four days, Kommersant reported Wednesday.

Russian Post said Wednesday that it had opened its first "business class" branch in the central post office in Ryazan. Among its new features is an electronic number system to organize customer lines.

DHL said in a statement last week that parcels destined for Moscow "are currently incurring clearance delays as a result of recent changes in customs clearance procedures for all express carriers." Federal Customs Service spokesman Dmitry Kotikov denied that any procedures had changed this year.

Russian Post jumped on the bandwagon, blaming the customs services for the increased delays experienced by its customers.

"The longer delivery times … are a result of delays in customs check zones for parcels coming from abroad," Russian Post said in e-mailed comments.

"Mail that goes through [regular] customs processing is sent to its destination without delay," it said.

Russian Post also pointed to an increase in the volume of international mail it processed. Depending on the type of mail, deliveries increased 50 percent to 90 percent year on year during the first two months of 2010, it said.

The Federal Customs Service confirmed that the volume of processed parcels grew over the period, but denied that it was responsible for any delays.

"Almost all mailings given to the service by the Russian Post are processed within one day," the service said in a statement last week.

Much of the mail sitting at customs points is there because it hasn't gone through Russian Post's own internal processing procedures, and another part is waiting to be picked up by the postal service, the statement said.

Kotikov said the service was looking into increasing the number of customs processing points.

The mutual accusations and red tape highlight the difficulties faced by Russia, which still uses the same infrastructure and procedures as in Soviet times, as it tries to increase its participation in the global Internet marketplace.

And the huge delays faced by customers are forcing many sellers to write off Russia entirely. Since delays often cause buyers to file claims to PayPal — the Internet payment system used by eBay and many other Internet shopping sites — many eBay vendors have begun changing their policies.

"I switched to shipping items [internationally] only to Canada," said eBay seller Dan, who sells collectible coins out of the United States. "I have had a few people from Russia saying they are not receiving items. … When an item does not make it to them, I lose money because PayPal sides with the buyer," he said by e-mail, asking that his last name not be used.

And even if sellers do eventually get their money, the lost time isn't worth it to many.

"PayPal takes the money out of my account while they are waiting for a dispute to end, so in each case I wasn't paid for the item or the shipping for two months," eBay vendor Jon, who declined to give his last name, said when contacted through eBay. He stopped shipping to Russia two years ago after several deliveries were delayed and has not resumed despite the growth in Russian Internet shopping.

"The Russian e-commerce market grew more than 50 percent last year to $5 billion," Alina Prawdzik, eBay's head for expansion in Europe, said in an e-mailed statement.

California-based eBay said recently that it planned to launch a Russian version of its web site to satisfy increasing demand, but it has not said officially when the site will be launched.

For the time being, Russian customers are advised not to use Russian Post, Prawdzik said in the statement.

"Feedback from experienced eBay sellers recommends the use of alternative carriers [to Russian Post]. … In many instances the deals available to Russian buyers will still remain compelling," she said. "We are obviously looking forward to the resumption of normal postal services in Russia as soon as possible."

Russian Post is nevertheless the only option for many people because it is much cheaper and parcels shipped using the service fall under different customs rules: Customers can ship items valued at up 10,000 rubles ($340) without paying a duty through Russian post, while the figure is only 5,000 through DHL and UPS.

The postal service has struggled to reinvent itself as it tries to shed its reputation for long lines and poor service.

Alexander Kiselyov, former director of Svyazinvest, a state-owned telecommunications giant, took the reins of Russian Post last year and vowed major changes to modernize the company and make it less state-dependent. In November, it announced that 8 percent of its 415,000 jobs would gradually be eliminated as it pushes to increase its efficiency.

Nevertheless, the postal service is still viewed negatively by many Russians. A poll initiated last week by Alexander, the blogger, showed that he was not the only disgruntled customer waiting for delivery. Out of 494 respondents, 91 percent thought that Russian Post's service was poor, very poor or awful.

But people find ways of coping. A music collector, who asked to be identified as Denis, said ensuring successful deliveries through Russian Post meant regularly investing time, money, and attention.

"I know the manager of my local post office, I try to be on good terms with the workers, I buy women flowers and candy on women's day," he said.

But buttering up the postal workers sometimes doesn't work, he said: Once, postal officials refused to give him his package, sent as a gift, because it was worth more than the posted value.

"They basically extorted $100 from me, and I couldn't risk them taking it to the next room and smashing it to pieces, only to tell me that it was damaged during delivery," he said.

He now tries to order through DHL, even if it does mean paying up to $55 for shipping.

"It's still a good deal because rare vinyl is so ridiculously expensive in Russia."

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