This summer, a revolution is expected on Germany’s roads. Starting from July 1, commercial freight vehicles weighing between 3.5 and 7.5 tonnes will have to pay road tolls. Previously, these smaller goods vehicles could travel on Germany’s roads without additional charge.
What are the new rules?
The new road fee amount will vary based on the Euro standard and CO2 emission class of each vehicle. For instance, a vehicle complying with the Euro 6 standard from emission category 1 will be charged 15.1 Euro cents/km. Vehicles with the Euro 6 standard and superior emission categories could see a reduction in tolls of up to 11 euro cents per km, whereas those with the Euro 1 standard will be charged 24.8 Euro cents per km.
The environmental component is the predominant part of the toll – the infrastructure fee is fixed at 5.2 Euro cents per km. The remainder includes fees for air pollution, noise pollution, and CO2 emissions.
Zero-emission vehicles, such as electric or hydrogen vehicles, as well as hydrogen fuel cell trucks, will remain exempt from road tolls until the end of 2025.
So-called craft vehicles (not engaged in commercial transport and belonging to service providers like electricians, plumbers, construction workers, etc.) in the GVM range of 3.5-7.5 tonnes are included.
In Poland, the fleet of 3.5-7.5 tonne trucks, which will face new, higher fees if they cross the border into Germany, numbered 265,200 in 2022, according to Eurostat data. These small trucks make up approximately 35% of Poland’s commercial goods vehicle fleet, which amounted to 738,600 vehicles in 2022.
According to Leszek Luda, president of the board of the Polish Transport Union (PUT), road tolls in Germany could affect up to several thousand companies and business activities in Poland, and tens of thousands of vehicles traveling to Germany.
The need to raise rates
What does the requirement to pay a few cents for each kilometer traveled in Germany mean for these companies? Leszek Luda has no doubt that difficult times are coming for the carriers who have been traveling toll-free until now. Especially since their current situation is not promising.
“Companies must raise rates, otherwise, they will be unable to cover the toll costs. Profitability is very low, hence carriers cannot afford these costs,” said Leszek Luda.
Low margins are one concern. Another is that for a year and a half, carriers have been grappling with low demand for their services due to the economic slowdown. This problem also affects shippers. In tough times, everyone struggles to survive, and naturally, customers and shippers are reluctant to absorb the higher costs stemming from the introduction of road tolls.
“Carriers who do not pass these costs onto the freight price will face bankruptcy,” concludes the president of PUT.
However, no country will impact companies operating small trucks as severely as Germany, where recent quarters have witnessed economic stagnation.
Six-digit increase in cost
Martin Reder, CEO of the German forwarding company trans-o-flex Express, anticipates a significant cost increase.
“At trans-o-flex, approximately 200 vehicles that were not previously subject to road tolls will now be due to the new regulations. According to our calculations, this will result in an increase in costs in the high six-digit range,” says Martin Reder.
Reder highlights that trans-o-flex reimburses its subcontractors and carriers for higher costs by passing them onto customers. The issue of costs being passed on to customers or absorbed by carriers was a major topic after the previous introduction of toll rates.
Recall that from December 2023 in Germany, an environmental fee is added to road tolls for trucks over 7.5 tonnes. For the most common combination over 16 tonnes, the toll increase was as high as 83%.
Moreover, transit through Germany itself became more expensive by about €100. Observing the impact of the December increase on the transport market over the last few months gives us an idea of what awaits those carriers who will only now start paying for the use of German infrastructure. This is another factor leading to an increase in the costs of running a business, especially in a climate of low demand.
The final nail in the coffin?
Maciej Wroński, president of Transport i Logistyka Polska (TLP), described the increased maut rates in December as “another, almost fatal blow to Polish transport companies.” “Even without the increase in road tolls in Germany, the situation of Polish transport would be dire,” added Maciej Wroński.
The head of TLP emphasises that the new German road toll system means additional costs for honest carriers who already operate on minimal margins. Moreover, these carriers are vying for business in a market with competitors offering services below market prices.
“Companies are trying to maintain financial liquidity at the expense of losses on each service performed,” explains Maciej Wroński.
The challenging situation of transport is evidenced by the fact that the transport and logistics sector was found to be one of the hardest hit in Poland by the economic slowdown.
According to data from the Central Economic Information Centre (COIG), in terms of the number of companies entering administration, transport and warehousing took second place with 176 (over 15% of all proceedings).
In the period January-March, seven transport companies also went bankrupt.
Better to park up?
While some carriers must drive to maintain liquidity, others who can afford to do so simply withdraw vehicles from operations.
Back in November, during the trans.iNFO debate at the Translogistica fair, Ellina Lolis, managing director of Maszoński Logistic, pointed out the possibility of companies grounding trucks instead of driving below costs.
“Analysis has shown that disposing of some vehicles will mean lower costs compared to keeping the entire fleet in operation while using it inefficiently,” said Ellina Lolis.
Ellina emphasises that negotiating higher transport rates, which should be a natural consequence of road toll increases, is very difficult due to the oversupply of capacity on the market due to lower consumer demand.
Short-sighted policy
As Mateusz Najdziński, director of logistics at TVM Transport & Logistics, emphasises, this natural market mechanism, which involves passing on higher operating costs to consumers in the shape of road tolls, will not help with Germany’s economic recovery.
“Currently, we have a client market that can dictate price conditions due to there being many carriers that desperately need orders,” says Mateusz Najdziński.
In his opinion, many carriers do not apply a well-thought-out pricing policy in their battle to maintain the continuity of their transport operations.
“This is a very short-sighted policy [not increasing rates to sustainable levels]. In the short term, such action may actually seem beneficial because it will ensure the functioning of the fleet, but in the long run, it may lead to at least serious financial turbulence for entities currently lowering freight prices,” explains Mateusz Najdziński.
In case of prolonged stagnation, it is possible that companies will join those from the COIG data cited earlier regarding bankruptcy and administration.
Vulnerabilities in the system
However, for creative carriers, there is a loophole that could allows them to transport cargo without incurring new tolls on German roads.
On the website of the toll collector Toll Collect GmbH, it is stated that vehicle sets with a total weight exceeding 3.5 tonnes will be exempt from tolls – if the tractor unit itself fits within the 3.5-tonne limit.
In practice, this means a van with a trailer or semi-trailer will not be subject to the obligation to pay tolls. And for every 100km, it will save at least €15 compared to a 7.5-tonne truck carrying a similar amount of goods.
Photo: JuergenG, CC BY-SA 3.0, via Wikimedia Commons