Reimbursement on Horizon: The German Toll Controversy That Could Influence European Road Transportation
A perspective on a recent court ruling and why this issue is likely to persist even after reimbursement.
Nearly four weeks ago, a German administrative court ruled in favor of a Polish carrier. The court found that the toll fee calculation unlawfully included costs for traffic police. This applied from October 1, 2015 to October 27, 2020. The court stated that the calculation was incorrect because it encompassed costs for other police tasks, which could not be clearly differentiated at the time of calculation.
The ruling specified that only the traffic police costs were unlawful. The carrier in this case sought reimbursement for this portion, plus interest. However, other lawsuits are questioning the legality of the total amount of the toll fees. This ruling does not directly apply to these other cases.
The situation is complicated and confusing, with many pending lawsuits covering various aspects and time periods. The key question is which lawsuits this judgment may apply to and during what periods. Given that statutes of limitations are also a factor, it is currently impossible to fully grasp the potential impact. As it stands, the only certainty is this lawsuit, assuming the parties accept the ruling and do not appeal.
What would happen if this judgment and many others become legally binding? Will that mark the end of this matter, settling all claims and disputes?
I am concerned that this discussion could shift to other instances as the “won” reimbursement could stir desire from the load givers who originally paid it as part of the transportation rate. While it is difficult to derive from all-in rates, toll fees are easier to quantify when they are kept as an additional surcharge or extra component. Particularly in these cases, desires might awaken on the load givers` side. Load givers, in this case, could be either the shipper or the carrier/forwarder, depending on how many times the load was subcontracted or forwarded.
I acknowledge that I'm speculating, but it is a tight market with thin margins for forwarders and carriers. Shippers on the other hand are looking for cost savings, particularly during economic downturns. Therefore, we have an economic/market situation where this matter could become significant. At least, it will likely become part of regular negotiations for further rate adjustments.
What would be interesting is the magnitude of this five-year reimbursement. How can we estimate and quantify the amount? Let´s simplify it with an example, applying it to an average transport of 300 km within Germany for the above five year period:
We have three years with a 5,86% reimbursement and two years with a 4,44% reimbursement, as outlined in the ruling. Combining this with the calculated cost share for tolls during this period using our Total Cost of Ownership (TCO) model, we derive:
5,86% * 10% toll cost share within the transport rate = 0,586% per year in 2016 - 2018
4.44% * 13% toll cost share within the transport rate = 0,577% per year in 2019 - 2020
Although on average 0,58% per year may seem small, it can represent a significant amount in the realm of European road transportation. Margins in the road transport segment often don’t exceed 3% even during good times for which an additional 0.58% would mean a significant increase.
This is why I believe this topic has only begun to attract interest and is far from resolution, after a potential reimbursement to the party that paid the tolls to the German government.
Christian Dolderer
Lead Research Analyst