The impact of the EU mobility package on supply chain planning

The impact of the EU mobility package on supply chain planning
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The impact of the EU mobility package on supply chain planning
The EU Mobility Package was introduced early 2022 and was designed to create a European standard to improve working conditions for drivers, ensure fair competition and eliminating price discrimination between member states.Now over a year on from its introduction we take a look at what it was trying to achieve and how its implementation has impacted supply chains operating across Europe.What is the EU Mobility Package?The EU mobility package impacts a hauliers operation from how long a vehicle can be on the road for to wages and taxes. This useful guide by the Foundation for Future Supply Chain
outlines the main points of the package:All vehicles need to return to their registered country every 8 weeks. This is designed to prevent haulage companies permanently operating vehicles abroad.A 4 day “cooling off” before cabotage can be performed again.The minimum wage must be paid to truck drivers to reflect the country they are operating in: including cabotage, combined transport or international cross-trade (UK-Germany for example).Tightened documentation requirements and registration on the Internal Market Information System (IMI).Drivers need to be paid a taxable wage rather than a tax free “per diem” which increases the total payment required for them maintain the same earnings.The impact of the scheme a year onWhile the package is meant to offer improvements for people and business, it is creating some challenges. We reached out to our network to discuss the issues and the impact it could be having on consumers and businesses.Rising costs for European hauliersMany freight companies have seen their overall costs rise, particularly in drivers’ wages and this has hit hardest in Eastern European countries where wages are generally lower.According to Pawel Wasiewicz (Sales Director Grupa Transportowa) based in Poland, their average costs for drivers salaries has risen sharply as a result of the new laws.Additionally, for Grupa Transportowa , the costs for domestic and short journeys abroad have risen 17% and cabotage in the EU has leapt up 25%-30%. This has a direct impact on transport capacity, with less availability for customers looking to move their goods and with rising costs having to be passed to the consumer.New regulations, new constraintsBrian Hosford (Vice CEO of Smeets
Ferry UK Ltd ) said that planning European freight journeys are more complex and time consuming to arrange since the package came in.Transport planners now need to plan shipments around; driver time regulations, fleet management, routing to ensure vehicles are returned within their 8 week limit and ensure drivers are returning home every 4 weeks.Case Study: Bands on tourLonger European journeys, such as bands going on tour, are more challenging than ever. As drivers and vehicles need to return home on a regular basis the transportation needed for any touring musicians will need to be changed, almost country by country.Touring is already a complex operation which involves keeping people and equipment together through extended international journeys where profit margins are already tight. Continuously changing the modes of transport will make touring a challenge, in fact so much so a well-known artist has had to cancel their European tour.Is it being policed consistently?The EU mobility package is governed by each individual country, who must ensure these laws are being followed. However, keeping to these regulations is not always the priority for many countries as they struggle with many other challenges the world of supply chains throws in their way.In the UK the DVSA should be responsible for monitoring and enforcing the relevant parts of the package. However, the UK gov.uk
site states that it is “unlikely that the UK will prioritize a high level of enforcement of the postings requirements immediately. This is due to other priorities for enforcement, including related to rules critical for public safety”.Brian Hosford at Smeets says that he has “never heard of anyone being prosecuted or even been checked” which might suggest that it would be easy for more unscrupulous freight businesses to get away with disregarding the rules.It appears that policing the mobility package is a lower priority for most European states as well as the UK now, however hauliers should be wary as this might only be in the short term.The impact of volatile political climatesWe live in a time where sadly war and conflict are prevalent. This does have a much wider impact and this does include logistics. This coupled with the regulations of the EU mobility package does have an affect on capacity.Jamie Reid
(Associate Director for European Accelerate at Baxter Freight) believes that there will be a re-focusing of freight capacity nearer Ukraine. The new laws on vehicles returning home every 8 weeks will mean that there is less scope for them to travel to the UK.We have already seen a shift in hauliers registering their vehicles in counties nearer Ukraine, like Poland, so that they will be prepared to help rebuild when the chance arrives.As these vehicles will need to return home regularly, they will naturally be used to move loads on or near their registered base. This means that there will be a reduced chance of picking up a load to deliver to the UK plus it will be further for them to travel when they do go home.Getting European drivers to come to the UK has always been an uphill struggle due to the post Brexit bureaucracy and how hard it is for them to obtain backloads due to the imbalance of imports to exports.There have already been severe shortages in freight capacity and drivers in Britain and losing more import loads might prompt the UK government to need to relax the rules on cabotage again.This should result in an increase in exports to Eastern Europe which could bring some capacity back to the UK or it could also result in the limited capacity being squeezed even further.Trying to improve conditions for drivers led to a shortage.One of the objectives for the package was to level the playing field for costs so that domestic haulage companies could remain competitive across Europe.This was supported by a lot of UK freight businesses but the extra bureaucracy post Brexit has made journeys to Britain uninviting for European haulage companies which led to a driver shortage.Prices were driven up in the short term due to a spike in wages to attract new people to the industry. Supply chains also felt the pinch as collection and delivery dates had to be worked to when there was transportation available.The UK government had brought in a grace period where unlimited cabotage was allowed for European freight businesses within a 14-day period and this eased the issue in the short term. However, this came to an end in April 2023.There are more updates to come in the mobility package and the initial effects of the previous changes are only just showing now. We know that there have been some seismic shifts in where transport capacity is distributed across Europe, and it is likely that there is more to come.Baxter Freight is a well-connected freight forwarder with a global network of suppliers, and partnerships with brands such as DHL and Gerlach. This helps us to support our customers to overcome the complexities of moving goods and helps us to adapt to major changes within the transport industry.If you would like to keep updated with changes in the industry and how we can support your business sign up for our newsletter or get in touch at ##### You’ve definitely heard of (and probably participated in) the shopping holidays like Black Friday and Amazon Prime day! Singles’ Day, outshines all of those as the biggest physical and online retail day in the world.A sweet product launch. Team Baxter recently came together in their pinkest ensembles, to celebrate all things Accelerate. From presentations by our Managing Director, Peter,We take immense pride in offering unparalleled customer service in all aspects of our work, setting the benchmark for personalised solutions, responsive support, and continuous improvement.
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