The harsh reality of the planned increase in road tolls in Germany? It will be an economic disaster
An opinion piece by Gunnar Gburek, Head of Business Affairs, TIMOCOM GmbH
The negative impact that the planned increase in the cost of toll roads will have is not something we can afford to simply turn a blind eye to.
The planned increase in the cost of road tolls in Germany, which will come into effect on 1 December 2023, represents more than just additional financial pressure – it is the harbinger of an economic nightmare for road freight transport, the backbone of our supply chains and economy.
From the end of 2023, all trucks with a maximum permitted weight of 7.5 tonnes or more will have to pay a partial toll rate to compensate for CO² emissions – on top of the existing toll. There are also plans to introduce the higher toll fees for other transport classes from 2024. The transport industry will not be alone in feeling the impact of these measures, as industry, trade and consumers will all be affected, too. There is much more at stake here than just the issue of additional costs – it is also a question of protecting Germany’s ability to preserve and increase its competitiveness as an economic hub.
A vicious circle of extra costs
The planned toll, referred to as the CO² surcharge, is nothing more than a ‘hidden’, politically motivated tax hike. One look at the supposed facts supporters use to justify it immediately reveals that their arguments are not in touch with reality in any way, shape or form. Introducing the CO² surcharge on 1 December 2023 as planned will see the cost of road tolls in Germany almost double for trucks overnight. It is incredibly difficult to envisage how the logistics industry can overcome this challenge, especially given that it is already doing everything in its power to efficiently combat rising costs. The growing pressure on transport companies to offset some of these higher costs by reducing their own profit margins just to remain competitive is, quite simply, unacceptable. It goes without saying that having to take this approach is highly problematic for a large number of companies, seeing as the transport industry is already working with paper-thin margins. Exerting even more pressure on to profit margins inevitably means that companies will have fewer financial resources available, for instance, to develop and implement the future technologies that we urgently need. This will also prevent investments from being made in lower-emission transport solutions such as electric trucks and alternative motors – despite the fact transport companies should actually be supported in their efforts to introduce more sustainability in logistics rather than being ruthlessly cut off at every turn.
But the problems do not stop there – far from it, in fact. The additional financial strain will even see other transport companies, especially the smaller and medium-sized ones, end up recording significant losses, ultimately reducing their chances of surviving on the market in the long term to zero. The consequences will be drastic, as these companies will be left in a precarious situation, one which will see their financial struggles compound exponentially until they reach the point where they may even have to close down altogether. It is a vicious circle that the planned increase in road tolls in Germany will do nothing but exacerbate further, making an already tense situation even worse with no regard to the damage it will do.
The planned German truck toll increase is a failure as a policy instrument
The increased cost of toll roads is repeatedly touted as a policy instrument designed to promote more environmentally friendly transport. The stark reality here, however, paints a bleak picture. It will not provide the direction that its supporters hope it will – and for a multitude of good reasons. Put simply, the infrastructure required to foster and accommodate alternative drive technologies is neither sufficient nor universally available. What’s more, it is unlikely that there will be enough of the right vehicles to harness these technologies available on the market by the end of 2023 or even in 2024. Measures such as these raise serious doubts about the prospect of a future with green logistics. The planned increase in the cost of toll roads will not benefit the climate whatsoever. Instead, it will cause untold economic and social damage.
An irresponsible measure with far-reaching consequences
You don’t need a toll calculator to work out that the logistics sector and manufacturing companies will not be able to bear the majority of the cost of toll roads alone. There is no avoiding the fact that these costs will end up being passed on to the (end) consumers at the different stages of the supply chain, potentially leading to goods and services becoming more expensive in general – which inevitably means that the cost of living will increase for the entire population as a result. Or to put it another way, it will be yet another factor contributing to the current rate of inflation.
We need to find solutions that protect the environment without inflicting far-reaching consequences on the economy, industry and society, because making sure that Germany continues to remain an economic hub both now and in the future – not to mention protecting the quality of life of all those affected – is vital.
It is time to accept reality – truck transport is the backbone of our economy and our society. And just to reiterate, whenever you see a truck on the road, there is a good reason for it. Behind every journey is a transport operation that is keeping our economy alive, ensuring our nation remains prosperous and that its people continue to have all the goods they need. The higher cost of road tolls in Germany will not bring about any short-term changes in the modal split – the infrastructure for alternative modes of transport simply isn’t in a position to do so at the moment. This means that road freight transport will continue to be needed – and continue to operate – as a matter of urgency. Higher costs and all.
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