Car manufacturer Mercedes-Benz AG informed its transport service providers earlier this year that it expects a 10 percent reduction in freight rates across all transport contracts (total freight rate) by 1 February 2025. Corresponding offers were expected from transport companies by 23 January 2025, according to reports from leading German carrier organisation BGL.
The organisation is urging the manufacturer to reconsider this step.
“The German premium car manufacturer Mercedes-Benz is driving German transport service providers out of the market in favour of low-cost suppliers from Eastern Europe,” the organisation commented bitterly.
BGL argues that such an approach is completely unjustified. “The failures of the automotive industry cannot be cross-financed by the transport sector. The German economy and its SME sector will not be revived through cutthroat competition,” the association added.
“With the current demand, the shift to Eastern European cut-price competition is inevitable, and it is only a matter of time before we experience a ‘Gräfenhausen 2.0’,” said Prof. Dr. Dirk Engelhardt, spokesman for the BGL management board. He was referring to the case of Agmaz drivers who protested at the Gräfenhausen parking lot over unpaid wages. “This would be accompanied by the collapse of domestic medium-sized transport companies,” Engelhardt warned.
Engelhardt also pointed out that just a year ago, the automotive industry lobbied the government to double truck tolls, which was subsequently passed into law.
“This toll increase has raised the operating costs of each individual truck by about €20,000 per year—this in an industry where average margins in road freight transport range from just 0.1 to about 2 percent. And now, our medium-sized companies are expected to bear the consequences of the automotive industry’s misguided policies and offer ruinous freight rates. Those who cannot comply—because the reduced rates do not even cover their costs—will likely lose their contracts to low-cost suppliers from Eastern Europe, who often pay their drivers starvation wages well below the minimum wage. This form of predatory competition is unworthy of a premium German brand like Mercedes-Benz,” he added.
From an organisational perspective, BGL has called for these demands to be reconsidered and amended as soon as possible.
This is not the first such appeal
A similar appeal was made over a year ago by steel producer ArcelorMittal. Before the German toll increase, the company sent a letter to its transport service providers in Germany outlining how it envisioned future cooperation after 1 December, once the new toll rates took effect.
The steelmaker did offer to cover the toll increase—but only under conditions it had set. The additional amount was to be calculated based on the number of kilometres driven on German motorways from loading points to the headquarters of ArcelorMittal customers. In return, however, it demanded a reduction in freight rates.
“We must request a reduction of current base prices by 5 per cent from 1 January 2024, which will remain in effect until the end of 2024,” the metallurgical giant stated at the time.