Moves by the German and French authorities to apply minimum wages on foreign drivers operating in their territories could have a major impact on the UK’s export drive, according to David Williams, managing director of freight forwarder Rhenus UK.
While Germany introduced its controversial minimum wage of €8.50 per hour on January 1, France has now confirmed that it plans to impose a similar minimum hourly wage of €9.61 for drivers involved in cabotage operations within its borders.
Rhenus believes that this move will add unnecessary red tape, bureaucracy and cost to Europe’s faltering emergence from the recession. David Williams said: “This introduction of local wage rates for transitory drivers across EU territories is in my view a retrograde step that goes against the ethos of the common, single market. The free movement of people and goods was one of the central pillars of the European market concept. These moves bring complexity and cost to a trading bloc that is central to the prosperity of the UK.”
Williams believes that if fully enacted, these raises in wage rates could increase haulage costs to EU countries by as much as 5% percent. He continued: “While there will be an inevitable hike in overall transport costs due to these impositions, there are steps that we can take to minimise the impact.
“Our planning department has already started to examine new routes and load factors to minimise the number of milk runs within certain territories. Our understanding is that any loading or delivery of goods within a country is classed as cabotage (attracting potentially higher local wage rates); while drivers passing through a region are currently exempt. Luckily, we deal with high enough volumes to allow us to go direct with limited stops at distribution centres.
“On the other side, where this new regime does have an unavoidable impact on wages, we’re ensuring our hauliers are fully compliant with all the regulations.”
Rhenus understands that in the light of these moves, various MEPs are calling for a single, EU wide minimum wage, however the freight forwarder believes such a ruling may confuse the situation even further.
Williams concludes: “This move from Germany has prompted accusations from Polish hauliers that the German government is breaking EU law. It’s becoming a divisive issue that needs clarification from the European Parliament sooner rather than later.”