German politician calls for minimum freight rate. Government responded to the appeal

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German politician calls for minimum freight rate. Government responded to the appeal

Last week, Christian Jung, rapporteur for the FDP’s parliamentary group on freight transport and logistics, called i.a. for more truck inspections. The government criticised this call. 

Last week, Christian Jung addressed a written question to the government, following the publication of a report by the Federal Office for Goods Transport (BAG) on the truck inspections conducted this year. After analysing the document, the politician considered that there are not enough of them, so he asked in the letter whether further actions are planned to counteract infringements in road freight traffic.

The federal government has just given Jung an official answer. It stated that the inspections carried out by BAG and other company inspection authorities will be carried out with the same intensity and to an unchanged extent.

As part of these activities, there are monthly nationwide control campaigns, adds the government in its letter.

Action against low freight rates

That’s not all. In his letter to the government, Jung also pointed out the need to take measures against low transport prices and social dumping. 

The FDP rapporteur for freight transport and logistics proposed in his letter to set a minimum freight rate.

The government referred to these ideas as well. It stated that it did not plan to take any special measures against price and social dumping in the transport sector. No such action was justified by the absence of an appropriate legal basis in European Union legislation.

Furthermore, it argues that such a solution could act as a disincentive for carriers to operate and could lead to ‘misallocation of resources’. The point is that price regulation in the form of introducing a minimum price higher than the market price would directly result in an increase in the volume of supply, which cannot be fully satisfied on the demand side. 

On the other hand, if the minimum price were lower than the market price, it would not lead to real changes in the market.  Likewise, as the government explains, setting the minimum price at the market price would not make much sense.

As the government summarises its decision, all three forms of minimum price analysed are either redundant or would lead to too much market distortion.

Photo: Trans.INFO

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