Where is the journey taking us?

The logistics sector is having a hard time dealing with the effects of the war in the Ukraine. High fuel prices and a worsening shortage of drivers are making life difficult for companies. At the same time, emissions in road traffic are not declining in the way politicians intended.

The transport sector accounts for 19 per cent of greenhouse gas emissions in German. The problem here: compared to the other sectors, emissions from traffic hardly decreased between 1990 and 2021 – by a mere 9.4 per cent, according to the German Environment Agency (UBA). The cause: The gains in efficiency in vehicle technology have been largely cancelled out by the growing number of cars and the increasing amount of road freight. Even the Corona pandemic had little influence on this.

If the targets of the Federal Climate Change Act (KSG) are to be met, greenhouse gas emissions from transport would have to be reduced to 85 million tons of CO2 equivalent by 2030, according to the UBA. Compared to 2019, this would be almost a cut by half (-48% per cent).

If Germany intends to become greenhouse gas-neutral by 2045, this would most likely mean reducing greenhouse gas emissions in the transport sector to zero. From the point of view of the German Environment Agency, a reduction in greenhouse gas emissions in Germany by at least 70 per cent by 2030 and by at least 90 per cent by 2040 versus 1990 should be achieved.

However, the UBA estimates that according to the German Federal Government’s current projection report, the climate protection measures currently adopted by politicians will only be able to reduce greenhouse gas emissions in transport to around 126 million tons of CO2 equivalent by 2030. This would mean that the transport sector would miss its target of 85 Mt CO2 equivalent by more than 40 Mt CO2 equivalent. The emission targets set out in the Federal Climate Change Act for the individual years up to 2030 would also be exceeded. This as well as the failure to meet the sector target for 2021 increases the pressure on policymakers to adjust objectives in the transport sector and to set a significantly higher pace for all climate protection measures.

However, investments in new, climate-friendly vehicles are made much more difficult by the current situation. Vehicle manufacturers are lacking important components and materials. The Ukraine, for example, is a key supplier of cable harnesses. Production at the Munich-based truck and bus manufacturer MAN is expected to remain at a standstill for several weeks as a result of the gaps in supply.

Soaring prices and lack of drivers

The freight forwarding industry however is plagued with other concerns. It is not only the umbrella association Mobility & Logistics Rhineland-Palatinate that signals that rocketing fuel prices pose an increasing threat to the livelihood of medium-sized haulage companies. This would jeopardise the supply of goods and compromise mobility, the association warns.

The Federal Association of German Freight Forwarders and Logistics, the DSLV, also emphasises that energy costs are driving up freight rates for all modes of transport and burdening all stages of the value chain in the logistics sector.

There are already reports from the market that medium-sized hauliers are coming under increasing economic pressure as they are unable, or only partly able, to pass on the increased costs to the customers in current contracts. Furthermore, German hauliers find themselves in competition with foreign providers.

The situation has also reached the policymakers. The Parliamentary State Secretary to the German Federal Minister for Digital and Transport, Oliver Luksic (FDP), referred to the massive impact on the German transport and logistics industry as a result of the war in the Ukraine and the sanctions against Russia in the Transport Committee on 16th March. He assessed the situation in the industry as “dangerous”. Many journeys are loss-making ventures. This is why the Federal Government is in close dialogue with the industry to find short-term and medium-term solutions.

A further problem is the acute lack of drivers. Many of the drivers employed in Germany came from the Ukraine, Belarus and Russia. According to media reports, there is currently a shortage of around 100,000 Ukrainian drivers in European haulage companies. The situation could deteriorate further if Poland were to call up more reservists. In this case, additional employees could become unavailable, said Luksic.