Expenses for employees in German transport are growing rapidly. What’s the effect?
You can read this article in 3 minutes
Rising personnel costs significantly increase the costs of groupage transport – according to a report by the German Transport and Logistics Association, DSLV.
According to the report „Index of general cargo transport costs” presented last week by DSLV, the costs of transport operations increased in the first half of 2018 by 6.6 percent. Over the last year, staff expenses, constituting 50.4 percent of all transport costs, rose in this industry by as much as 10.3 percent. This contributed to an increase in the total cost of transport by 5.2 percent – emphasizes the German union. What is behind this tendency? Deepening lack of drivers, both in long-distance transport and in regional distribution.
Other costs of carriers
According to DSLV, the increase in other costs was more moderate. Material expenses, which account for 35.6 percent, increased in the analyzed period by 2.9 percent. Fuel expenses increased about 2.5 percent, accounting for a total of 10.9 percent of all operating costs. German transport operators spent 2.1 percent more than a year earlier on tolls (toll share in costs is 3.1 percent). The share of tolls in the German carriers’ expenses in the second half of 2018 will increase more clearly due to the extension of tolls to all federal roads in Germany.
The prices will follow suit
The human resources situation of the European transport industry is becoming increasingly difficult. The lack of drivers is noticeable in virtually every country, so wage increases are necessary to recruit employees. Experts and representatives of the industry stress that in the wake of raising salaries, the freight rates must increase as quickly as possible.
Two carrier organizations are appealing for an immediate increase in freight rates by 15-20 percent in Hungary. The Federation of National Private Carriers (NiT Hungary) and the Hungarian Road Transport Association (MKFE) also say that driver wage raises are needed.
Also Ferenc Lajkó, the head of the Hungarian operator Waberer’s, drew attention to the current situation on the market. According to him, changes in the prices of transport services are necessary.
You can not manage increased costs effectively without immediately thinking about the increase in prices. Those who do not dare to raise prices will be ruined. The current situation indicates a change in the industry, and the pressure on profits will accelerate,” said Ferenc Lajkó.
Due to the lack of staff, the European leader in food logistics, the Nagel Group, also decided to increase prices for services by 6 percent.
The deteriorating market situation can no longer be offset only by our efficiency improvement programs, but must also be transferred to the market – explains Björn Schniederkötter, managing director of the Nagel Group.