Overcoming Hurdles: How Tightened Border Regulations Influence Business Expansion

Status: 16.09.2024 16:03

Even if the consequences for the movement of goods are expected to remain minimal, the logistics industry in particular is concerned about the expansion of border controls. How will they affect supply chains?

Frank Huster, the managing director of the Federal Association of Freight Forwarders and Logistics, does not want to speak of a “black day”. But one thing is clear: if border controls are carried out in the EU internal market, then that sends a negative signal. And Volker Treier, the head of foreign trade at the DIHK, the German Chamber of Industry and Commerce, also says: “Yes, we are concerned.”

Experience shows that border controls affect freight traffic. Commuters and service providers are also affected, as are the many retail stores and restaurants that serve guests near the border.

Memories of pandemic times

For some, unpleasant memories are awakened – for example, of the Corona pandemic, when many borders were only partially passable. At that time, there were kilometer-long truck traffic jams in front of checkpoints. At times, kitchen rolls and toilet paper were in short supply. “Just in time” deliveries were a major challenge.

“But we’re not there yet,” says association head Huster. And we shouldn’t imagine that everything will get worse overnight. “We have a very, very dilapidated infrastructure,” says the logistics expert. “There are construction sites. There are traffic jams caused by accidents. Logistics never runs smoothly in operational business.” Now the border controls could lead to additional delays. “But we can’t yet predict the extent to which this will happen,” says Huster.

DIHK foreign trade chief Treier is more skeptical: “Reflecting on the long phase of the Corona period, when the borders were only passable to a limited extent for other reasons, has shown that this can quickly amount to billions.”

Controls “with measure and means”?

The new border controls will initially apply for six months. There are already controls at the borders with Poland, the Czech Republic and Switzerland – nothing will change in this regard. France, Denmark, Belgium, the Netherlands and Luxembourg are now being added.

“Sporadic controls are planned that do not primarily affect freight traffic,” says Huster, pointing out that there are ways and means of avoiding excessive traffic jams at the borders. “During the Corona phase, the European community of states, led by the European Commission, ultimately implemented a Green Lanes Policy, i.e. a priority rule for freight traffic. This should now also take effect. And we are also confident that controls will be carried out with moderation and means.”

What if other countries follow suit?

But scepticism remains. Border controls are only permitted as a last resort in the Schengen area. And then only if exceptional circumstances exist. The corresponding agreement was signed in June 1985, almost 40 years ago.

What if other countries follow Germany’s example and also introduce border controls? Treier can vividly imagine that. “That makes the exchange of goods, the commuter traffic, the impact on tourism potentially so large and so serious for us that we are really worried.”

The logistics industry is also warning of undesirable side effects. If comprehensive and permanent controls are introduced, additional costs are to be expected. The controls will increase travel times, and this in turn will have an impact on supply chains.

Claudia Wehrle, HR, tagesschau, 16.09.2024 15:08

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