In mid-September, carriers and the entire European economy faced another concern. At a time when Europe is already grappling with various economic difficulties, and the transport industry is burdened by reduced demand, Germany introduced temporary border controls with all its neighboring countries on September 16th. The decision was justified by security risks: Berlin aims to prevent illegal migration and protect internal security.

Several countries across Europe expressed dissatisfaction as soon as the measures were announced. The main challenges highlighted were the disruption of the principle of free movement within the Schengen Area, problems with goods transport, higher costs, import and export restrictions, etc. As for the transport industry, massive consequences are expected to be felt in Poland, which has the largest fleet of commercial vehicles in this part of Europe, and strong concerns were also raised in the Netherlands. On the other hand, analysts predict that the impact on Germany’s own economy will not be insignificant.

The end of Schengen as we know it?

Although Germany had already been conducting border controls with Poland, the Czech Republic, Austria, and Switzerland for some time, these inspections were “relatively relaxed,” which has no longer been the case since mid-September. Furthermore, controls were also established with France, Luxembourg, the Netherlands, Belgium, and Denmark, and these measures will be in place for six months.

Given Germany’s key position as a transit country in Europe, it is no surprise that the controls have caused significant concern. “This will inevitably lead to a transportation collapse,” cried the Evofenedex association from the Netherlands, whose busy border crossings with Germany see 1,000 trucks crossing daily. “The sudden introduction of border controls between Germany and the Netherlands completely caught Dutch companies off guard,” said the German-Dutch Chamber of Commerce. The Polish Association of Transport and Logistics (Transport i Logistyka Polska) also sent a letter of criticism to the European Commission.

While Germany’s federal transport ministry announced it would strive to minimize the impact on transport and that various measures (such as green lanes for commercial vehicles) are being considered, skeptics have called the border controls “the beginning of the end of the Schengen zone without borders.”

Transport of perishable goods faces significant challenges

Crossing borders within Schengen usually takes around three minutes, but with the introduction of controls, this time could multiply depending on the time of day, season, traffic congestion, etc. The biggest concern about long waits, disrupted supply chains, and delivery delays comes from those transporting or selling perishable goods, such as milk, flowers, etc.

Business associations from the Netherlands, which export goods worth €165 billion to Germany each year, warned that every hour a truck waits costs €100, and that the damages from delays over six months could reach tens of millions of euros. In addition, there are the losses from disrupted supply chains.

In an effort to assist those transporting sensitive cargo, experts recommend that more attention than ever be paid to whether the current refrigeration capacity is sufficient to compensate for longer waits, whether additional measures are needed to ensure the quality of the transported goods, and so on. For example, some carriers choose to use additional refrigerants to maintain temperature during unexpected delays, while others opt for alternative solutions that ensure product stability at lower temperatures.

“West-East is the most frequented route for European logistics”

The role of transport in Europe is so significant that any disruption in this area is quickly reflected in all other sectors. Allianz Trade, an international company specializing in trade credit insurance and credit risk management, published an analysis stating that temporary border controls will not only increase transport costs but will also significantly jeopardize the economic stability of both Germany and the countries surrounding it.

Temporary border controls trigger a domino effect—causing rising product prices and severe economic losses, according to Allianz Trade. They estimate that the increase in transport costs is likely to lead to a reduction in German imports of goods by -9.1% and services by -7.8%, amounting to a total of €1.1 billion annually.

Soon, the first month since the temporary border controls were introduced will pass. At that point, at least preliminary results are expected on how much this is all costing and whether the disruptions are as severe as initially estimated. Regarding carriers, one of the latest comments came from Poland. “Polish trucks have borne the brunt of the new regulations,” said former Polish ambassador to Berlin, Andrzej Byrt, in an interview with TVP World at the beginning of October. “We must not forget that the West-East axis is the most frequented transport route for European logistics. We are indeed impacted by these restrictions.”