At the end of March, the governing parties met for several days to set the course for further cooperation. Among other things, a faster expansion of the motorways and the rail network was decided. These projects are to be financed by doubling the truck toll. In the end, this also affects the end consumer, because logistics has to increase transport prices here, because doubling the toll naturally increases the operating costs of the individual transport companies. However, producers and retailers will not want to forego their profits and will add this increase to the products. But anyone who comes to the idea that transport logistics is responsible for increasing prices for end consumers should be told that this is far from the case.

Transport prices based on butter

Let's take butter as an example. As is well known, there are 250 grams in one package, which means that around 80,000 packages of butter fit on a truck. We simply assume a distance of around 500 km from the producer to the central warehouse, which we calculate as a flat rate of EUR 1,000. Added to this are the transport costs that arise when the milk is collected from the farmers. Since the milk is collected and processed regionally, we assume a price of €500 that will be spent on it. So if you calculate these total €1,500 transport costs down to a package of butter, the transport itself doesn't even amount to €0.02, i.e. 2 cents . With an offer price of €1.49 per package, that's only 1.26% of the price! A doubling of the toll would be noticeable here with less than €0.01, which would then be passed on to retailers. However, experience has shown that retailers like to use this as an argument to suggest to consumers that the price increase must take place for precisely this reason. By the way, less than 6 months ago a packet of butter cost over €3! The transport prices have hardly changed during this time.

Consequently, one cannot say that the transports are the cause of these significant price fluctuations.

Logistics is medium-sized

In Germany, 95% of transport companies are medium-sized businesses, with fleet sizes between 1 and 30 vehicles. Consequently, the federal government's plans have a direct impact on German medium-sized businesses. We do not believe that the shipping industry will accept this cost passing on 1:1. In the past we have often seen that the increase was not accepted or was only accepted after long and tough negotiations.

Our experience has shown that large retail chains tend to award transport based on the cheapest price. Points such as the reliability of the transporter, availability of dispatchers and contact persons or general customer service are often ignored. Furthermore, it is not taken into account that this strategy can lead to the follow-up costs being even higher if you have made a mistake when choosing the transport company and you have to correct it as quickly as possible. And it is precisely these follow-up costs that can be a reason why prices fluctuate. But it is of course easier to blame the buyer of such transports for their mistakes on logistics and pass the buck on them than to think about the consequences of their trade from the start.

The Gräfenhausen case, fair salaries and weak controls

Unfortunately, you often look in vain for fair prices in logistics because the competition from other European countries never sleeps. And as the Gräfenhausen case currently shows, despite the rules of the new EU mobility package, drivers are falling victim to the practice of hellish exploiters. In theory, drivers should receive the minimum wage that applies in the country in which they work. Due to the lack of controls and the impossibility of implementing this law, there are many foreign companies that can continue to offer transport across the EU at anti-competitive conditions. Incidentally, Germany has one of the highest minimum wages in the EU and this is also expected to rise again this year. Controls on the minimum wage to be applied for such transports would have to take place in the entrepreneur's country. The national authorities are not authorized to do this, which is why the drivers continue to be shamelessly exploited. In principle, the shipping industry should also be held responsible here. But the topic will be taken up and deepened in one of the next blog posts.

Further effects

Construction sites and increased tolls may also lead to delays in the delivery of goods. The construction sites often cause long traffic jams that can disrupt the flow of goods and the increased toll fees can lead to logisticians taking alternative routes to save the toll. However, this is not environmentally friendly, as these alternatives are often much longer and more time-consuming than the direct route.

But these don't have to be the only consequences: as we all know, high costs also drive up the inflation rate. What this means for end consumers, but also for the manufacturing industry, is obvious. The market is affected, purchasing power decreases and people start saving. In order to reduce costs and remain competitive in the market, many companies are already moving their production facilities abroad because operating costs are significantly lower there.

Despite all these uncertainties, OCS Spedition can look back on a loyal customer base and, with the help of the satisfaction it generates, ensure #smoothlogistics .

Note: For reasons of better readability, the language forms male, female and diverse (m/f/d) are not used at the same time. All personal names apply equally to all genders.

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