Savage competition hits western European truckers
by Justin Stares
Living on an island has its advantages even in the single market: the UK's geographical isolation has saved Britons the unhappy fate of a growing number of unemployed European truckers
The English Channel has once again saved the United Kingdom, but this time the threat is not an armed invasion but a horde of eastern European truck drivers. On the other side of the water, savage competition from cutthroat Polish, Romanian and Bulgarian truckers has already driven thousands of western European companies into bankruptcy.
In Denmark alone, there were 8,000 job losses between 2008 and 2010, according to the Nordic road haulage lobby. In Belgium, unions say 2,700 jobs were lost over the same period. Chaotic deregulation and an inability, or unwillingness, to enforce existing laws are behind the sector's mounting unemployment. Western firms are being decimated even as the overall number of European truckers increases.
In some cases competition is illegal: road haulage firms are abusing poorly written legislation such as the EU's posting of workers directive. Other truckers simply ignore cabotage rules that restrict their ability to work in a foreign country after they have dropped off their load. "We have called on Kallas to put a stop to all deregulation," says Roberto Parrillo of the Belgian union CSC Transcom, referring to the European Union transport commissioner Siim Kallas.
Most of the illegal trade would end if governments enforced a European Court of Justice ruling stating that social security costs are incurred in the country from which the trucker sets off, Parrillo tells PublicServiceEurope.com. But enforcing the ruling on the roads of Belgium, which shares a border with four other nations, is not easy. Border crossings were dismantled years ago, meaning there is no natural location, no bottleneck, where enforcement can take place.
"We met with the Belgian government, who said they wanted to clamp down in fiscal and social fraud. We asked them how many inspectors they had, and they said seven," Parrillo says. The influx of foreign truckers into Belgium is so large that on weekends, while they take their compulsory rest, they form small villages around the Heysel football stadium in Brussels. Often with their wives and children, they cook and sip beer along the side of the adjacent roads.
EU law-makers have focused too much on liberalising service industries and not enough on harmonising labour law, says Søren Larsen, who heads the Brussels office for the Nordic Logistics Association, a group that unites the region's road haulage companies. "The rules are not sufficiently clear for applying controls," he says. "The posting of workers directive is difficult to apply". One in five truck journeys undertaken in Denmark is illegal, Larsen says. At least 10,000 Danish truckers are expected to lose their jobs.
The widespread undercutting of rates has taken place despite restrictions on the employment of Bulgarians and Romanians – two countries that joined the EU in 2007. The restrictions expire at the end of next year, and to make matters more frightening still Kallas is considering a new round of road haulage liberalisation. In a true single market there should be no need for cabotage restrictions at all, the commission believes.
Members of the European Parliament, on the other hand, say the entire sector is now at risk in some countries. "Cabotage must not lead to the complete loss of a whole profession in a member state due to competition on labour conditions and wages as seems to be the risk in Denmark," three MEPs told Kallas last month.
In the UK, meanwhile, the industry has relatively few complaints. "As an island we are in a better position," says Peter Cullen, head of international affairs at Britain's Road Haulage Association. Given that border crossings are in most cases in ports, British officials are not faced with the same enforcement challenges as their mainland European counterparts. "Around 80 per cent of all traffic comes through the roll-on roll-off ports," says Cullen. "There are lots of controls. Eastern European truckers can come over here but they would be subject to our regulation". Unlike most of western Europe, the UK is therefore in the unusual position of being satisfied with existing EU rules.
Free competition among EU member states was designed to improve living standards in Europe's less advanced economies. But competition in the road haulage sector is having the opposite effect: it is driving down wages and reducing employment in the richer western nations. The recession may be the culprit, at least in part. But EU law-makers cannot escape their share of the blame. Even the commission admits that the posting of workers directive needs tidying up. New legislation is underway in Brussels.
"The European parliament is really dragging its feet," says Jonathan Todd, commission spokesman for employment and social affairs. When the EU institutions start to blame each other, you know that something has gone badly wrong.