Higher pay, fewer drivers

Under the Mobility Package provisions that recently came into force, drivers will receive at least the minimum wage set in the country where they perform their work.  The government of Germany intends to raise the country’s minimum wage in 2022 to €12 per hour. Are drivers rubbing their hands in anticipation?

In accordance with the provisions of Germany’s 2015 minimum wage law — the Mindestlohngesetz, or MiLoG – the statutory minimum wage increased from €9.50 to €9.82 per hour on January 1, 2022. Another increase to €10.45 euros per hour is scheduled for July of this year. In October, the German government intends to raise the rate to €12 per hour.

This means that drivers who perform cabotage deliveries, i.e. with loading and unloading entirely or partly in one country, will be paid higher wages. In turn, carriers must plan for higher costs due to the planned wage increases.

However, such changes do not only concern Germany. Under the Mobility Package’s delegation rules that came into force in February 2022, drivers will receive at least the minimum wage set in the country where they perform their work.

For comparison, here are the approximate hourly minimum wage rates in some European countries:

Alexandr Monsh, Branch Manager of AsstrA-Associated Traffic AG in Magdeburg, explains how the new wage regulations for drivers are affecting the transport and logistics industry.

Alexandr, will higher remuneration for seconded drivers be a reality? Or are they just in theory?

It’s hard to say whether a driver posted to work in Germany, for example, will really get the German minimum wage. German companies will pay the most attention to paying the German minimum wage. According to German law, foreign carriers must also pay their drivers higher remuneration when working in Germany, but will they? I doubt it.

What does MiLoG mean for non-German transport companies?

It’s a risk on both sides. The first risk is that German regulators can check whether an employer paid a driver’s salary while he was in Germany and issue a fine if not.

The second risk is that disgruntled drivers may sue employers who don’t comply with the new regulations.

In general, I think the MiLoG will not cause a decrease in the volume of transport provided by foreign carriers in Germany.

The German government intends to raise the minimum wage in the country to €12 per hour in October. That sounds ambitious.

I am sure that their intentions will be realized. Work must be compensated fairly. Moreover, due to an acute shortage of drivers in recent years, wages have been trending upward anyway.

Has this lack of drivers been hard on the German economy?

Every year for the past five years, 50,000 drivers retire and 20,000 new ones are licensed. That means there is an annual shortfall of 30,000. This is a disaster for a fast-growing economy.

This problem seems to be affecting all of Europe.

Yes. Each country is coping with the shortage in its own way. Germans are recruiting drivers from Poland and the Czech Republic. Poland and the Czech Republic are recruiting drivers from Moldova, Belarus, and Ukraine. There is a chain reaction, but the underlying problem remains.

How do you see the overall state of the transport and logistics industry these days?

The situation is not very optimistic. Because of the shortage of drivers, there is also a shortage of vehicles in Germany and throughout the European Union. Companies are afraid to invest in new equipment. Add to that the jump in petrol prices, and we see that transportation costs have risen 50% in Germany last year. These are major fluctuations. The transport and logistics industry is certainly facing new challenges.