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Polish haulage organisations join forces in bid to lobby for government assistance

TLP and ZMPD decide on joint message following several individual campaigns that failed to bring about significant change.

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Poland’s road freight sector, the largest in Europe, is struggling with many problems. The number of bankruptcies has increased dramatically, and most carriers are reducing their fleet and/or their workforce.

Last week, Renata Rychter, Director of the Department of Transport of the Ministry of Infrastructure, presented a proposal to amend the Road Transport Act to alleviate the problems faced by carriers.

The Ministry of Infrastructure has proposed suspending the issuance of permits to perform the occupation of road transport operator for two years. Similarly, the issuance of licences for the transport of goods within the Community would be suspended.

This may be the first positive effect of a new joint campaign conducted by the two largest carrier organisations in Poland. In May, the Association of International Road Carriers (ZMPD) and Transport and Logistics Poland (TLP) decided to jointly appeal to the authorities for help due to the disastrous situation in the industry.

The common front of both organisations is the result of the ineffectiveness of numerous appeals from both entities to the authorities. The organisations submitted many proposals to individual ministries, and the Prime Minister, but received no response.

“We no longer have time to wait for support from our government in the coming weeks or months, because many carriers may soon be gone and any help will simply be too late,” says Jan Buczek, president of ZMPD.

As part of the campaign, on June 6, tow trucks with loudspeakers took to the streets of Warsaw, circulating around the Chancellery of the Prime Minister, the Sejm of the Republic of Poland, and the Ministry of Infrastructure.

Of course, it will take some time before the proposal of the Ministry of Infrastructure becomes a valid plan. The preparation of the amendment and passage through the entire legislative process (i.e., the Sejm, Senate, and the President’s signature) will probably take until autumn. This may mean that the new regulations will come into force at the end of the year or the beginning of the next year.

But it could give some breathing space to Polish carriers, who have been hard-pressed in recent years like no other sector. According to ZMPD, the situation of Polish road transport is dramatic. Over 60% of carriers are reducing their workforce and fleet, or intend to do so in the coming months. 13% have stopped paying financial obligations, and the number of bankruptcies in the first months of 2024 increased by 100% year-on-year.

For many people outside the industry, these numbers will come as a shock. The Polish transport sector has two faces. On the one hand, Poland’s carriers have been the European leader in terms of transport performance for several years now. Polish trucks have a very strong position on the German market; approximately 20% of vehicles of this type driving on German roads are registered in Poland. However, the introduction of the Mobility Package has presented challenges.

Success in Europe

Additionally, Poland’s carriers are an absolute powerhouse when it comes to cross-border goods transport. Carriers from Poland carry out approximately 15% of transport (in terms of volume) on the most important routes between Western European countries. Polish hauliers also have the largest share on the route from France to Germany, responsible for 33.8% of the transported volume in 2021. In the opposite direction, the share of Polish carriers was 26%.

Moreover, Polish transport companies have gained a very strong position on the route between Germany and Italy. To the south—to Italy—the share of Vistula companies is 25.9% of the volume; in the opposite direction, it is slightly less at 24.2%.

In addition to this, Polish companies also have double-digit shares on routes (in both directions) between Germany and Belgium, the Netherlands, Austria, and the Czech Republic.

“The Polish road transport industry has been one of the main pillars of our country’s economic development for the last 20 years. It is of fundamental importance for generating over 51% of Polish GDP, ensures a positive balance of payments in economic relations with other European Union countries, and contributes an annual levy to public finances in the amount of over PLN 16 billion,” Maciej Wroński, president of TLP, recently stated on LinkedIn.

Skyrocketing costs

However, there is a spoonful of tar in this barrel of honey. Or even a whole ladle. While the transport sector as a whole is powerful, it is built on thousands of small components struggling with serious problems.

This is due to the fact that the costs of running businesses have increased significantly in recent years, primarily fuel prices, but also personnel costs associated with the driver shortage. The lack of qualified employees means that current workers simply have to be paid more.

The situation of carriers has deteriorated significantly since 2022. The outbreak of the war in Ukraine brought an increase in fuel prices, which already constitute 40-50% of the costs of transport companies. Moreover, the war brought an economic slowdown throughout Europe, leading to fewer orders, which in turn led to a drop in transport rates while operating costs continued to rise. On a human level, the rising cost of living also contributed.

Almost simultaneously with the outbreak of the war in Ukraine, the European Union introduced the provisions of the Mobility Package. For carriers, it was essentially two high blows back to back. To use boxing terminology, it may not have been a knockout, but it was a knockdown.

The carriers continue to fight, but are dazed from the blows. The provisions of the Mobility Package imposed further financial burdens on carriers related to employee remuneration, not to mention limiting their activity on foreign markets by having to return to the base every few weeks.

The shadow cast by Germany’s road toll legislation

We also cannot forget about the costs related to the EU environmental policies, which have caused a series of road toll increases in EU countries. In December 2023, we witnessed an increase in tolls in Germany, which amounted to an astronomical 83%.

Considering that 40% of the cross-border operations of Polish hauliers is conducted in Germany, this affects many carriers. Transport companies that transit Germany were also hit hard by the toll increase. Transit through the Federal Republic is today over 100 euros more expensive.

Nevertheless, as Maciej Wroński commented on the introduction of increased road tolls in Germany, “even without the increase in road tolls in Germany, the situation of Polish transport would be disastrous.”

Competition from Ukrainian haulage firms

The war in Ukraine caused many Polish carriers to lose their target markets east of Poland’s border. Sanctions against Russia and Belarus also limited the possibility of operating in these eastern markets. It should also be remembered here that the vast majority of border crossings in the Belarusian direction have been closed.

Following Russia’s invasion of Ukraine, the European Union also made it possible for Ukrainian entities to have open access to the European Single Market. Thanks to this, Ukrainian carriers have been able to benefit from not being subject to as many EU regulations and requirements. In addition to this, their costs are clearly lower than their counterparts in Poland and other EU countries. Thus, not only did Polish hauliers lose their eastern markets, but they also began to be displaced in their domestic markets by competitors who were not bound by the same regulations. This all culminated in the months-long protests at the border crossings with Ukraine.

As TLP points out in a statement on its website, unequal competition with Ukrainian carriers “that do not bear EU regulatory costs” is not the only challenge related to carriers that do not entirely play fair.

Additionally, carriers from some Member States, where the rules for remunerating drivers have not yet been adapted to the requirements of the Mobility Package, also pose unfair competition, says the organisation.

The battle goes on

Both of Poland’s leading haulage organisations say they are determined to continue their campaign to defend transport until they are sure that appropriate actions have been taken by the government to help the road transport industry.

“We want to protect the jobs created and continue to work for the benefit of the Polish economy and Polish society,” explains ZMPD in a press release.

As Maciej Wroński wrote on LinkedIn, the government has known about the proposals of carriers’ representatives for a long time. These include, among others; projects to intensify the fight against unfair competition, including control of contractors ordering illegal transport, temporary load reduction (ZUS) related to the employment of drivers, and statutory shortening of payment terms in road transport (up to 14 days). TLP’s proposals also included a moratorium on issuing permits to perform the profession of carrier (although the union proposed 12 months).

“These are just examples of the solutions that the administration has on the table, along with proposals for specific changes to the law. Their implementation requires political decisions and the consent of many ministries. And we don’t have time anymore,” wrote Maciej Wroński.