van driver's speedo representing for truck drivers in general

Berlin Approves Minimum Wage for Truck Drivers

This news has been little reported in the media but in April 2014 the German cabinet in Berlin approved a draft bill which will introduce a national minimum wage across German territory. The minimum wage is something the UK has already had for several years. But something such as this, happening in Germany affects the UK transport industry and freight drivers in general.

The reason why we are reporting on this now is because this bill is to be pushed through the German parliament any time now. What has this got to do with the ordinary freight driver? Firstly this new minimum wage applies across all industries so it will influence the transport and logistics sectors. Any employee (or lorry, truck, courier driver) passing through German territory will be subject to this new law. So if you are a freight driver that had taken a freight ferry from Dover-Calais and driving across Germany to get to Latvia or Estonia, or Denmark, they then would be subject to the national minimum wage.

The rate is stipulated at €8.50 per hour (about £6.60 at current exchange rate). Therefore, as defined in the law for any period spent driving in Germany an employee is subject to that law. Now this figure of €8.5 might not appear to directly affect UK freight drivers whom normally make more than this rate (in fact the minimum hourly rate in the UK in EUR is €7.80, lower than the German equivalent) but it will deeply effect lorry drivers travelling in the opposite direction. For example, any truck drivers coming from Eastern Europe or the Baltic states in order to reach Western Europe and the UK, many will pass through Germany because this is of course, a more direct or quicker route to reach the main ports of Hamburg, Rotterdam, Calais, and Amsterdam to catch a commercial ferry.

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The Impact on Freight Rates

As a result, many central and eastern European companies and businesses that already have trade agreements with UK partners, whether these are transport and/or import companies, will probably have freight rates too low to meet this wage increase in Germany, especially if their drivers cross its territory.

In addition, the UK already has a shortage of qualified and experienced hauliers, couriers, and HGV drivers because of new EU rules demanding extra training for older drivers, and the low numbers of younger drivers entering the field of road haulage and logistics. This was reported back in September 2014 in fears that pre-Christmas deliveries wouldn't reach their destinations properly. However, drivers from Eastern and Central Europe are plugging the gaps and replacing the traditional British truck drivers as they get older, refuse to take extra training brought upon them by EU law, and retire.

The main issue to this is that now that these gaps are being filled by drivers from Eastern Europe, they themselves now face their own difficulties in convincing legitimate employers to pay the German minimum wage, those that don't will break the law, and many drivers will avoid driving through Germany which will increase road mileage and costs. Nevermind the impact to British imports and exports - the British government has a concerted plan to increase British exports during the next decade but this requires drivers with experience and training - something there is a shortage of.

Even so this new draft legislation in Germany, while criticized and condemned by local German small and medium businesses, it may be welcomed in some industries in the UK for readdressing a seemingly unbalanced jobs market in which questions of EU membership, levels of immigration, and increased competition are part of a bigger ahead of voting in UK elections.

07 January 2015

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