The German transporter, Nagel, has indicated that they will increase their tariffs. This rise is due to congestion and staff shortages. This transport company announced that their congestion costs would be offset by the shippers. Earlier this year, the Flemish branch organization, TVL, also said that, as of this year, they would pass on these extra costs. Should logistics service providers within the fresh fruit and vegetable sector comply with this? We asked a few key players.
Jelle Woudsma, Forwarding Manager at DFresh Logistics, said in a statement that he had been a supporter of this for years: "The road transportation operators have long sold the idea that everything is expensive and you must look for ways to reduce costs. Now, many have reached the rock-bottom. A good balance between costs and profits needs to be found."
"We deal with loaders on a daily basis who lay the cost for waiting hours, canceled or rejected cargoes, and other things at the feet of the transporter. They do this because they do not want to take any responsibility for this. The story simply comes down to 'the cost creator is the cost carrier'. This has been a point of contention for years, especially in the fresh produce trade sector. The shipper, exporter, or importer, who, most often, instruct the transporters, claim it is not their fault that these costs arise. This often happens. There are exceptions here", concludes Woudsma.
Marc Vreugdenhil of C. Vreugdenhil Transport admits that prices will increase again in 2019. This is due to the rising costs. "We will have a fixed percentage increase on all costs. This is not necessarily due to congestion costs."
Eric Lens of Lens Transport also does not agree with passing on the cost of congestion."I think you should include that, beforehand, as part of your price calculation. The only thing I have noticed at the moment is the long waiting times at loading/unloading docks. The waiting times there are getting longer and longer. Just yesterday, for example, I waited an hour to have half a pallet rejected by a client. That is time you cannot get back. Traffic congestion is a minor issue."
Peter Hendriks of the transport business with the same name from Venlo, admits that congestion in the Netherlands is becoming more and more of a problem. "It costs my company more than EUR1.000 per week. I am in discussions with our biggest clients about this. I am also going to report the problem to the TLN."
Pim Leenheer of DailyFresh Logistics also says congestion costs are an issue in the whole road transportation sector. This is because it is only increasing. "Especially in the industry that we work in. With fresh products and short shelf lives, delays are not desirable. Of course, no-one wants this kind of price increase. However, the time will come when shippers will have to pass on these costs in some way. In our case, we cannot say anything about a surcharge for our customers. There are other cost items that we will have to pass on in the future, in particular, because of Brexit."
For more information:
Jelle Woudsma
DFresh Logistics
Marc Vreugdenhil
C. Vreugdenhil Transport
Eric Lens
Lens Transport
Peter Hendriks
Peter Hendriks Transport
Pim Leenheer
DailyFresh Logistics