Transport costs in logistics are still so low that it's worthwhile to relocate production to other EU countries. Many people know and love Hachez chocolate. However, most don't know Hachez as a brand, but only the more familiar name Feodora. The chocolate was produced in Bremen's Neustadt district until 2020, but the site is now vacant and plans are underway to build residential buildings on the former factory grounds.
Chocolate production was relocated from Bremen, Germany, to Nowa Sól, Poland. And the Hachez case is not an isolated incident in Germany, as production in Germany is becoming increasingly expensive, and this is not solely due to current inflation or the very high energy costs.
The minimum wage in Germany
One of the main reasons why many companies no longer produce in Germany is the minimum wage, which was introduced here on January 1, 2015, and will rise to €12.00 per hour on October 1, 2022. This will make Germany the country with the second-highest minimum wage in the EU; only Luxembourg has a higher hourly wage at €13.05. Looking at Eastern Europe, the minimum wage there ranges from €6.21 per hour (Slovenia) to €2.00 per hour (Bulgaria). This wide range is beyond the EU's control, as member states have sovereign power over minimum wages, and they are not subject to a uniform EU directive. Personnel costs are a major factor influencing logistics costs. An EU-wide uniform minimum wage for truck drivers is already being discussed, but has little prospect of success in the short term because the tax and social security systems also have to be taken into account and these differ greatly in the individual countries.
One advantage of an EU-wide minimum wage for truck drivers would be that competition in the transport market would become more transparent.
One disadvantage is that overall transport costs rise, meaning end consumers have to pay more for individual products. This would result in a further increase in the inflation rate.
Affordable transport prices
The striking differences in minimum wages are also the reason why transport logistics through the EU are still cheaper than, for example, producing in Germany. A prime example of this is crabs, which, caught in Germany, are still transported to Morocco to be peeled. Afterwards, the peeled crabs are transported back to Germany along the same route to be packaged and shipped ready for consumption.
Due to staff shortages everywhere, too few cabotage checks carried out, as might be necessary to prevent illegal cabotage transports.
Theoretically, the different minimum wages in the transport sector should not play this role, because legislation stipulates that a driver of a cabotage transport should receive the minimum wage of another EU country as an hourly wage for the duration of his stay in that EU country.
However, due to the state-level powers of the control authorities, it is not possible to guarantee that truck drivers are paid properly.
Low appreciation of transport logistics
In general, it must be said that transport logistics extremely important , is nevertheless undervalued. Who hasn't experienced this: driving on the motorway, a truck suddenly overtakes another simply because it's going 5 km/h slower than the overtaking vehicle. Even slogans on trucks do little to help when drivers feel slowed down by these maneuvers.
The situation is similar with rail transport. Deutsche Bahn has a reputation for always being late. This is also true for freight transport, as it always has priority over passenger transport. So, if delays are already commonplace in passenger transport, this is even more true for freight transport.
Sea freight is slow compared to air freight or road transport because ships, for example, need three weeks to travel from Asia to Europe. Furthermore, inland waterway transport is heavily dependent on river levels. However, ships have the advantage of being able to transport significantly more goods at once than a truck or airplane could. The largest container ship, for example, can carry 24,000 TEU, where one TEU corresponds to a 20-foot container. However, container prices, which have risen exorbitantly, especially since the COVID-19 pandemic, are making negative headlines.
OCS in this context
Even in these challenging times, OCS remains competitive, not least due to its decades of expertise in the transport sector. A well-established network of reliable carriers, motivated and highly trained staff, and a respectful approach to customer relations also ensure that all transport operations are reliable, professional, and punctual.
This is also demonstrated by the consistently positive feedback from OCS customers, who are regularly supported and delighted in the transport sectors of Scandinavia, Asia and Eastern Europe, whether by rail, truck or ship.
Naturally, OCS and its partners ensure compliance with legal regulations to guarantee fair competition.
Quote from Dennis Braun: "This guarantees the satisfaction of our customers and justifies fair prices.".
