Logistics And Frieght Forwarding

Pick of the week: Cabotage in road freight to get … – Shippers Digest

June 22nd, 2012

by Shippers Digest

A new report commissioned by the European Commission has suggested a major re-think of the way road freight cabotage operations should be managed by European Union member states.

In its document Report of the High Level Group on the Development of the EU Road Haulage Market 1] presented to the European Commission on the 19th June 2012, the so-called Wise Men (the report s authors) recommended a loosening of the present restrictions.

The following is extracted from a Memo http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/12/457&format=HTML&aged=0&language=EN&guiLanguage=en ] on the subject (issued by the European Commission on 20th June 2012), explaining briefly the issue of cabotage and the key elements of the proposals.

What is road cabotage?

Cabotage is the domestic transport of goods in a country by a haulier registered in another country. The rules on cabotage and access to the international road transport market for EU registered and other carriers are laid out in Regulation 1072/2009.

According to the Regulation, hauliers may carry goods without restrictions from their country to another or between two Member States, even if these Member States are not their country of registration3.

Hauliers are however still limited when they wish to go from one point to another in a Member State other than the one where they are registered. In this case, called cabotage, hauliers are restricted to three transport operations in the seven days following an unloaded international carriage. These rules have been applied since May 2010.

What is the problem?

The EU road haulage market is dealing with a series of problems such as:

  • Hauliers are not free4 to carry out transport operations freely, which can force hauliers to travel home or elsewhere with empty vehicles, or stop them from loading their vehicles in an optimal way and which creates efficiency losses.
  • Operating conditions vary from one Member State to another, meaning that the conditions for carrying out cabotage also vary from one operator to another.
  • The existing rules have proved challenging for Member States to apply, particularly regarding the number of cabotage operations carried out.
  • Concerns also exist as to the availability of manpower in the sector, and the capacity of the road transport industry to take up innovative solutions.

What is the High Level Group proposing?

The High Level Group is proposing a flexible and gradual opening of national road transport markets, to be flanked by measures to restore the attractiveness of the sector, ensure that rules are applied fairly and that innovation can be promoted. In particular, the Group recommends that two different types of cabotage be introduced:

  • Linked cabotage , limited to a short period of time and connected to an international carriage
  • and non-linked cabotage , which may take place for a longer time, independently of any international carriage and which would be subject to a registration procedure to ensure that the drivers5 involved apply the labour law of their local competitor.

What are the benefits?

The High Level Group considers that this set of measures would allow a step-by-step opening of the market, increasing flexibility of operations and competition in national markets, whilst ensuring fair competition and avoiding a race to the bottom in social norms. More flexibility would allow hauliers and shippers to optimise fleet management and reduce6 empty runs, thereby reducing emissions and fuel consumption whilst improving the competitiveness of the overall economy which relies on efficient logistics.

What are the next steps?

The Commission will consider the High Level Group s conclusions in its own report on the situation of the EU road haulage market, to be published in 2013. On the basis of this report, the Commission may also present a legislative proposal to review Regulation 1072/2009.

The issue is of interest to shippers in that many have openly supported the rapid phasing-out of cabotage restrictions. They claim their choice of haulage provider is restricted by the rules, which can be especially critical at times of peak demand, shortage of drivers, and where the spot market is perhaps utilised to fulfil more urgent and unplanned deliveries.

It is also claimed that by limiting the opportunities to use foreign registered haulage companies for some of their domestic road freight transport requirements, prevents the shipper from forging longer term relationships with them and integrating them into their total domestic and international haulage requirements. This then places greater reliance on agents and freight forwarders or third party logistics operators to manage the transport mix required by shippers.

Shippers will therefore be following any new proposals from the European Commission very keenly.

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  1. ^ http://ec.europa.eu/transport/road/doc/2012-06-high-level-group-report-final-report.pdf (ec.europa.eu)
  2. ^ http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/12/457&format=HTML&aged=0&language=EN&guiLanguage=en (europa.eu)
  3. ^ Powered by Text-Enhance (europa.eu)
  4. ^ Powered by Text-Enhance (europa.eu)
  5. ^ Powered by Text-Enhance (europa.eu)
  6. ^ Powered by Text-Enhance (europa.eu)
  7. ^ View all posts in Environment (www.shippersdigest.com)
  8. ^ View all posts in Europe (www.shippersdigest.com)
  9. ^ View all posts in Features (www.shippersdigest.com)
  10. ^ View all posts in Legal & Legislation (www.shippersdigest.com)
  11. ^ View all posts in Road (www.shippersdigest.com)

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