Freight transport will become significantly more expensive this year. The truck levy, which will be introduced on July 1st, will categorize trucks based on their emissions and charge a fee for each kilometer driven for their category. According to ING Research, this will result in a net increase in transport costs of 7% to 8%. Dennis Wetenkamp, CEO of AB Texel, expects this increase to be slightly higher for the agricultural sector, up to 10%. He believes the bill will ultimately be passed on to the consumer.
According to the logistics industry association Evofenedex, the introduction of the truck toll will affect not only carriers but also companies that have their goods transported. Although not all costs will be passed on immediately, according to ING Research: "If companies arrange this properly, these costs will be passed on to customers through a contractual clause, but with annual contracts, this will have to be done in the interim. Therefore, it cannot be ruled out that carriers may initially lose out."
A survey by Evofenedex revealed that almost half of its clients are willing to negotiate the kilometer charge. "This indicates that immediately passing it on will be challenging," according to ING. The bank previously reported that consumers will notice little of the cost increase, as transport accounts for only about 5% of a product's price.
Mark van den Dolder, co-director of freight forwarder Inverness Transport, which handles European transport of potatoes, onions, carrots, coffee, and cocoa, among other products, indicates when asked that they can pass the higher rates in the Netherlands on to their customers. "Farmers aren't well off, and transport companies don't have the thickest margins either." In that respect, the introduction of the truck levy is an unpleasant year for agricultural businesses, especially potato growers, says Den Dolder. "There's a surplus of potatoes, and farmers are forced to sell. I'm afraid the big players, the supermarkets, will exert pressure and farmers will foot the bill."
Consumer's account
Dennis Wetenkamp, CEO of AB Texel, expects the bill will ultimately fall on the consumer. "We'll pass it on to our customers; we don't have that margin. I expect the costs will be passed on further down the chain and ultimately reach the consumer." He believes that, due to agricultural transport, the cost increase resulting from the kilometer charge will be slightly higher than the average calculated by ING, at around 8% to 10%. "Not great for our competitive position," he says, although this is already common practice in other countries like Germany, Belgium, and France.
Rising costs, he says, make it even more important to create a dense network. He believes there's still room to "get as much mileage out of the supply chain as possible through scale and diversification."
Aside from the kilometer charge, AB Texel has been working on sustainability for years, including 125 trucks running on bio-LNG. In the near future, the company also plans to launch ten to twenty electric trucks. "Across all divisions—some RMO transport, potatoes, onions. We're going to see if we can remain flexible. We're going to collect data and see if it's viable."
The amount of the additional transport costs depends heavily on the number of kilometers on tolled roads and the type of truck, according to Evofenedex. The highest rate of €0,236 per kilometer applies to a Euro 5 truck, €0,201 for a Euro 6 truck, while the rate for an electric truck is considerably lower at €0,038 per kilometer. Therefore, hauliers with a (partially) electric fleet pay considerably less per kilometer.
Electric truck more interesting
According to Rico Luman, Sector Economist for Transport and Mobility at ING, the kilometer charge makes it "much more attractive for road hauliers to consider the use of electric trucks." According to Den Dolder, electric trucks are an option within the Netherlands, but "not if you have to charge them to Spain" (90% to 95% of their transport goes through the rest of Europe). The lack of charging infrastructure was also the main reason the European Commission decided at the end of last year to waive a requirement for hauliers to purchase electric trucks.
The investments required of transporters for electric vehicles are "extremely high," Wetenkamp points out. "The purchase price is still three times higher than for a regular diesel truck, so the interest and depreciation costs are much higher. And with diesel, you fill up twice a week for fifteen minutes, while with electric vehicles, you're at a charging station twelve hours a week. And then the electricity price also has to be attractive. It's only attractive if you can power them yourself and don't have to charge en route." In that context, the most important thing the government can do, according to the CEO, is to solve grid congestion. Wetenkamp also expects that, in addition to electric vehicles, HVO diesel and hydrogen will also play a significant role in sustainability.