In a letter recently obtained by the German media, Mercedes-Benz stated that it would only cover just under 50% of the new surcharge on CO2 emissions, which is to enter into force on December 1 in Germany. The announcement unsurprisingly caused dissatisfaction among its transport partners. Meanwhile, another shipper has said it is willing to bear the costs, but only under certain conditions.
The aforementioned letter from Mercedes Benz was revealed by German industry website verkehrsrundschau.de last week. Additionally, the manufacturer announced in the letter that it would pay extra only for loaded kilometres, and not for empty kilometers.
“We are making an offer to voluntarily increase the basic rates of the above agreements by EUR 0.08 for each German toll kilometre on the routes covered by the increases. Mercedes-Benz Group AG has calculated and determined the number of kilometres in question based on reference calculations,” the manufacturer wrote to its partners.
The price correction will be valid until the end of the contract period concluded with carriers.
The letter states that the increase will be automatic and that the adjusted contracts will be sent to companies for approval in the next few weeks. If the terms are not accepted by carriers, the rates from previous contracts will apply.
News of Mercedes’ move sparked a negative reaction from the industry.
“We expect a full refund of all additional costs,” said one of the business owners in a statement provided to German website transaktuell.de.
Another carrier stated on its own website that it would no longer accept certain transport orders from the manufacturer. “Then we will politely refuse, justifying it, for example, with a vehicle breakdown,” he said.
Shipper seeks reduction in freight rates Another shipper operating in Germany – steel producer Arcelor Mittal – also reacted to the imminent increases in toll rates. The company sent a letter to its transport service providers in Germany with information about the conditions of cooperation after 1st December.
First of all, it says that next year will continue to be very challenging.
“Volumes will remain stable, although with some fluctuations, as has already been observed this year,” the manufacturer wrote in a letter obtained by the transport portal dvz.de.
Arcelor Mittal offered to take on the toll increase, but the basis for charging the additional amount will be the number of kilometres traveled on German highways from loading points to the headquarters of Arcelor Mittal’s customers.
This means that the reimbursement will cover the transportation of the cargo, but not the costs of arriving at the loading site or returning from the shipper’s customer. Additionally, the manufacturer expects carriers to reduce freight rates.
“We must ask for a reduction in current basic prices of minus 5% from January 1, 2024, which will remain in force until the end of 2024,” he appealed to transport companies. “We have to transfer 100% to the customer.”
Transport and forwarding companies carrying goods for other sectors are also afraid of drastic toll increases and problems passing on higher costs to customers.
“We must pass on 100% of the upcoming fee increase to our food production customers. This will significantly increase inflation,” Jes-Christian Hansen, managing director of Hamburg-based agricultural seed supplier HaBeMA, told Die Welt.” Lars Soltau, head of the transport company Soltau, also told Die Welt: “With every fare increase, it is difficult for us to pass on some of the increased costs, for example in the case of empty journeys in phases of weak economic activity.”
The “Slow death” of medium-sized transport companies Last week, the German media also touched on comments made by a Leipzig forwarder on the “X” social media website. Berthold Richter, owner of Halsped, complained in the post about the higher, tolls but also about bureaucracy, reflecting the frustration of the German industry.
“For me, as a German freight forwarder who currently employs 60 people in Germany, I have little time until the weekend to determine whether I need to immediately close part of my fleet and lay off more of my employees due to the toll increase,” wrote Berthold Richter.
Small and medium-sized forwarding companies are afraid that they will not be able to pass on the entire fee increase to their customers.
In the case of empty journeys, e.g. on the way back from the customer to the base, the freight forwarder is solely responsible for tolls. This could quickly cost the existence of some already cash-strapped medium-sized enterprises. The forwarding industry in Germany consists mainly of medium-sized enterprises. Of the approximately 70,000 forwarding companies, over two-thirds are companies with 1 to 10 trucks.
“Margins in our sector range from less than 1% to 3%,” says Dirk Engelhardt, spokesman for the management board of the BGL transport and logistics association. According to him, the scale of the toll increase may consume the entire profit of the transport company.
Engelhardt added: “It can be foreseen that the required cargo space will no longer be available,” says Engelhardt. „A fare increase will lead to the 'slow death of the middle class’ in the transport industry,” concludes Die Welt.
