First effects of Danish cabotage regulations already visible
Danish restrictions on road haulage are already impacting transport companies. FREJA Logistics, active in Scandinavia, experiences increasing capacity shortages that are very difficult to meet. The new regulations started taking place partially on 25 April. On 21 February 2022, they will begin to be in full swing. If the impact is already felt, what could happen after the full deployment of regulations?
Cabotage is a term used for domestic transports carried out by a means of transportation belonging to another country. It is a crucial component of combined transport that brings together rail and short, last and first mile, road transport. Utilising the EU mobility package, the Danish transport ministry decided to reduce the number of foreign companies active in Denmark significantly.
As a result, companies like FREJA Logistics cannot provide the needed capacity to their customers anymore since foreign hauliers choose not to operate in Denmark. Simultaneously, the Danish companies able to provide transport services are not enough to serve all the customers waiting in the queue.
According to the regulations in place since 21 April, all international drivers must meet the Danish salary standards. In case of a road check, drivers must present a valid employment contract and payslips to prove that. Moreover, all international drivers must sign up on a Danish online register listing the transport date, truck’s registration number and personal data.
If a driver does not comply with the requirements or made a mistake while registering online, the authorities issue fines. Understandably, these factors are deterrent for foreign companies to transport cargo through Denmark and pose a real threat for supply chains relying on combined transport.
Holding on to Danish companies
As FREJA Logistics underlines, the last resort is to rely on Danish hauliers who cannot provide satisfactory solutions to meet the transport demand. Consequently, the company is trying to pressure the Danish government in coordination with trade associations. Apparently, the company is not the only one affected by the situation.
However, the company’s reliability and performance concerning the customers’ needs has already been jeopardised. It is very alarming that with one EU country applying these rules for a couple of months, companies are losing capacities and, respectively, customers. In the event of more countries adopting such rules, or even if Denmark puts the regulations to full use in the coming February, how much could combined transport change and could it be able to overcome the obstacles?