We have to have a stricter attitude towards diesel thefts

By: Thomas Ström 6/14/19

In the hauler industry in Sweden, there is a lot of talk about cabotage regulations, penalties, etc. However, one thing is rarely noticed – the diesel thefts. Given that the fuel price is now at record-high levels, it feels important to describe the problem.

After conversations with some of the Swedish haulers driving for us at NTEX, it is apparent that this is a very common and widespread issue. Of the cars driving for NTEX, there is almost one car being emptied for diesel every week.

We are talking about organized diesel thieves driving around with a small truck and a large tank on the truck bed. Once they have identified a vehicle that no one is supervising, they break the tank cap and then use high-capacity pumps that can empty a tank of 600-700 liters under a few minutes. In cases where the haulers have invested in covering the tank with some security or special locks, the thieves just break it by making holes in the tank.

Yet, it does not stop there. On the occasion when something goes wrong and large amounts of diesel leak out on the site, the owner of the vehicle is responsible for the cleanup. Well, more correctly – a rather high insurance fee. The insurance company pays for the remaining costs.

The police are aware of what is happening but cannot do anything. Sometimes it happens that the diesel thieves are caught red-handed, but after a few hours, they are out again. The reason? The crime is dismissed due to lack of evidence! With this in mind, I can understand that some haulers ignore reporting to the police. It takes too much time and effort and gives back way too little.

So what do the thieves do with the stolen diesel? In several cases, they re-sell it to sub-prices – sometimes half the price – to less scrupulous haulers. Alternatively, they sell the diesel abroad. This is the reason why today it is possible to buy cheap transports for 50-60 SEK per mile, which is supposed to cover costs for expensive cars, fuels and drivers.

Another distinct market is the one where foreign haulers send their drivers cash that should suffice for refueling for the trip to and from Sweden. A full tank of 700 liters for 8 SEK per liter instead of 16 SEK per liter means 5 600 SEK right down the driver's own pocket, which can correspond to almost a whole month's salary in their native country.

Do I need to tell you that people in the industry are laughing at us in the rest of Europe? We have to get tougher and set examples. This cannot go on.

Thomas Ström

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Differences in conditions are creating unfair competition between Swedish and European haulers

By: Thomas Ström 5/22/19

I have previously written about how competition between Swedish and European haulers is put out of play, since controls and extra sanction fees in Sweden only apply to Swedish haulers.

In this post, I will highlight some other factors that emphasize that these actors are playing by completely different conditions, which leads to the competition being distorted. This is something I hope that the EU will be able to contribute to change as soon as possible.

Most Swedish haulers invest heavily in new fuel-efficient vehicles with the least possible emissions to protect our environment. The latest Euro 6-rated engines emit next to nothing compared to their predecessors. According to BilSweden, a truck from the 70's releases as much nitrogen oxides and particles as 100 new trucks do today. A Euro 6-rated truck releases 95 percent less nitrogen oxides and 97 percent fewer particles than a Euro 1-rated diesel truck. It's no wonder that one of our hauler says: "These new trucks emit fresh mountain air."

But it’s pricey to invest in Euro 6-rated trucks. A new tractor unit with this type of standard costs about 1.4 million SEK in Sweden today. It’s a huge investment when all or large parts of the "fleet" are to be replaced. Meanwhile, we should be aware that in some European countries, the same trucks can be purchased for a roughly 300 000 SEK lower price. The competition is already put out of play right there.

But it gets worse. The Swedish haulers must comply with the Swedish Transport Administration's rules regarding driving and rest times word for word. In previous posts I have written about how strict the charges are if the driver breaks the rules in the slightest. For some companies, the total amount of fines could sum up to several hundred thousand Swedish crowns in one year. Because it is the human factor (i.e. the drivers) that determines how large the fees will be, the hauler is often unaware of the violations until the day the Swedish Transport Administration states its requirements. This has resulted in the Swedish haulers today budgeting with several hundred thousand Swedish crowns in additional fees during one year.

However, foreign haulers are not subject for review in Sweden. Their drivers can violate all the rules that their counterparts in the Swedish haulers must follow.

On the question why this is so, the Swedish Transport Administration responds: “But they are examined in their home countries in the same way as the Swedish haulers are here. The Swedish haulers will not be examined abroad. ”Several of the Swedish entrepreneurs I talked to are convinced that in many European countries there are not as many checks as in Sweden. Here too, the competition is unfair.

Along with a number of other factors, which I have written about and will write more about here on the blog in the future, the competition has been and will be unfair. Several foreign haulers therefore do not have to budget for extra sanction fees. And besides, they don't have to expect to pay as much for their trucks. It is no wonder that the Swedish haulers find it difficult to compete with the prices when it comes to transport to and from Sweden.

If the Swedish haulers are to win the contracts, they must be better at other things, such as service, quality, credibility and accessibility. We at NTEX work that way and try to help our partners to do the same. This is the reason why we are where we are today. Or as we usually say, "NTEX always does it a little bit better".

 

Thomas Ström

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The increased penalties of the Swedish Transport Agency are putting the competition out of play

By: Thomas Ström 4/24/19

The Swedish Transport Agency's new sanction fees towards the haulage industry.
On March 1st last year, the Swedish Transport Agency’s sanction fees for Swedish haulers were raised from a maximum of 200 000 SEK or 10 percent of a company's turnover to 800 000 SEK or 1 percent of the turnover, during the two-month period being controlled in conjunction with a company control.
Meanwhile, nobody is controlling the foreign haulers' vehicles.
The competition is being put out of play.

This is what the Swedish Transport Agency states on its website. 
“The rules on driving and resting periods aim to ensure healthy competition between the players in the road transport sector, to give drivers a pleasant social situation and to contribute to fine road safety. The Swedish Transport Agency therefore carries out company inspections to see if Swedish companies comply with the rules and live up to the responsibility they have as a transport company.”

This could very well be the case. However, over xx per cent of all transports to and from Sweden are currently performed by foreign haulers, who are not affected by these controls.
None of them risk any sanction fees if their drivers make the same mistakes as the drivers who drive for Swedish haulers.

The Swedish haulage industry is already hard-hired. The lack of drivers, increased costs for fuel and low margins mean that several entrepreneurs choose to throw in the towel. They believe that they do not have the same terms when working as their foreign competitors.

The Swedish Transport Agency claims that it’s the same for Swedish haulers in the other EU countries. “The Swedish haulers are not controlled there. The haulage is only controlled on its home market.”
But that’s not really true. The difference is that many countries do not control their haulers in the same way as they do in Sweden. They only control the drivers.

The background is that Sweden has a requirement of controlling three per cent of all working days performed by drivers covered by the driving and resting rules.
The EU has determined which rules apply in all EU countries, but each member state decides for itself how large the fees should be and whether the driver or the hauler should pay. And that varies greatly. In Poland, for example, it’s the driver who has made the mistake and must pay the cost while in Spain it is the opposite – the driver does not pay anything.

In Sweden, the driver is inspected 28 days back in time and can get a maximum of 10 000 SEK in fees for the errors he / she has made.
On the other hand, when it comes to the offending driver’s Swedish haulage company, the Swedish Transport Agency can go 12 months back in time and check errors in the tachograph. The slightest deviation is registered and entails a fee.

Sweden is a big country and it takes a long time to drive from Malmö to Luleå. By law, the driver must stop and rest for 45 minutes after 4,5 hours of driving.
After nine hours in continuous driving time, he must then take a day off.
All of this can be followed in the tachograph 12 months back.
This means that a correct round-trip drive between Malmö-Luleå takes just over 70 hours, while a vehicle from a foreign haulage company that does not risk any controls, can stretch drive for about 20 hours. This is solved either by the driver having an extra driver card or by the fact that there are two drivers in the car for the price of one. After the stretch drive, the driver rests for a few hours and then it is time for new stretch driving again.
This means a time gain of just over 20 hours. It would not surprise me if the foreign haulers – who drive to and from northern Sweden – use this as an argument in their procurement with customers on the continent.
This is what I call a distorted competition.
Who wants to run a business under such conditions?

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Professional drivers take advantage of Swedish haulers

By: Thomas Ström 4/4/19

There is a great shortage of professional drivers in Sweden and throughout Europe today.
This means that as a haulage owner, you try to make use of every possible opportunity that is available in order to acquire new or extra staff. This has resulted in a situation that has become very costly.
It appears that some drivers have put in system to take advantage of the Swedish haulers.


The reason is that Swedish haulers pay very well, usually between two to four times the monthly salaries compared to other countries. Some drivers therefore take the chance to work as much as possible for a limited amount of time.
This system is inviting people to cheat. Because who wants to rest for 45 hours during the weekend in a country you’re only going to work in for a few months?
This is why scrupulous drivers borrow licenses from peers that are currently not in service on the Swedish market. Or even worse: they use counterfeit licenses.

This way, a driver can work on his own driver's license for a haulage during the weeks and thanks to a borrowed or forged licenses for another haulage on the weekends.

Here's an example of a scenario:
A previously unknown person to the hauler gets in touch and says that he is a driver and wants to drive extra on the weekends to earn some extra cash. The person concerned has a valid driver’s license and driver card. The haulage company has no opportunity to check whether the driving license and driver card are correct, because no authority responds to these types of inquiries for intergrity reasons.
The driver gets the assignment to work for a few weekends.

The problem for haulers arises when the Swedish Transport Agency does a corporate control, which I have written about in my latest blog posts.
In some cases, the Swedish Transport Agency finds that the driver's licenses and/or driver cards are fake or stolen, and require fines from the hauler for every time it has been used by the driver. It doesn’t take a lot of times before the sanction fees are up to 100 000 SEK. 

When the hauler notifies the concerned driver, he or she can get upset and angry. "That’s not true, my papers are completely legal". The driver can prove his innocence.
When the haulage owner then raises this point in front of the Swedish Transport Agency, the sanction fees are written off in some cases. But in order to succeed with this, the haulage company must have a solid foundation of evidence. Therefore, it is no wonder that the law firms' fees to Swedish haulers have increased over the past year.

But since some haulers can deal with dozens of additional drivers within one year, it is difficult to confront all concerned drivers because they only worked a few weekends several months ago. It is impossible to find them to gain access to their evidence.
The haulage company can easily pay up to 100 000 SEK times nine drivers, i.e. 900 000 SEK.

The Swedish Transport Agency is careful to point out that they listen to arguments concerning each individual case. Therefore it is not surprising that haulers who contact lawyers to appeal often gets a reduction of their penalty fees to a certain extent. But as I already mentioned – the submission of evidence is always with the hauler.
Who can cope with running a business under such conditions?

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Swedish haulers pay high fees for drivers' mistakes

By: Thomas Ström 3/13/19

Last week I wrote about the Swedish Transport Agency's raising of the sanction fees against Swedish haulers.
Last year on March 1st, they raised the maximum penalty from 200 000 SEK or 10 percent of the company's turnover to 800 000 SEK or 1 percent of turnover during the two-month period that the Swedish Transport Agency controls in connection with corporate control.
Here I give a few examples of what the Swedish Transport Agency is cracking down on during such a control and how much money it means for the haulers in fees.

The background is that the EU has established which rules apply in all member states, but each country decides how much the charges are and who has to pay – the driver or the hauler. And that varies greatly. In Poland, for example, it’s the driver who has made the mistake and takes the large cost while in Spain, it’s the opposite. There, the driver does not pay anything.

In Sweden, the driver is scrutinized 28 days back in time and receives a maximum of
10 000 SEK for the errors he / she has made.
However, when it comes to the faulty driver’s Swedish hauler, the Swedish Transport Agency can check and review faults in the travel computer 12 months back in time. The slightest deviation is registered and results in a fee.

What the Swedish Transport Agency focuses on in the travel computer during a company control is for example:

  • The driver has driven 1-30 minutes too long before taking a valid break or rest after 4 ½ hours of driving, which gives a penalty of 1 000 SEK per occasion.
  • The driver has driven without inserting his driver card in the tachograph: 8 000 SEK per occasion.
  • The driver holds or uses one or more driver cards: 4 000 SEK per occasion.
  • The driver has not specified start or end country in the tachograph: 500 SEK per occasion.

Here are some examples of how the Swedish Transport Agency fines the haulers afterwards.

  1. A driver has planned to stay in a specific rest area after 4 hours and 20 minutes. Once there, it turns out that the rest area is full and the driver is forced to move to the next rest area. Obviously, he can't stay on the highway. If the time to the next rest area takes longer than 10 minutes, he will be fined. 1-30 minutes means 1 000 SEK and over 31-1,5 hours means 2 000 SEK and anything beyond that means
    4 000 SEK.
  2. A driver who has to rest for 11 hours (how many adults can sleep for that long?) leaves six minutes early. Thus, the break in the tachograph shows 10,54 hours. This results in a fee of 1 000 SEK. A break of less than 8,5 hours means 4 000 SEK.
  3. During the weekend, the vehicles often need to be washed and maintained. At this point, the driver must drive about 50 meters in his own hauler’s parking lot, where there is often a separate wash station. This little drive then "ruins" the 45 hours long weekend break and, just like that, the hauler receives a 4 000 SEK fee. If a vehicle is driven without a driver card, the hauler might have to pay 4 000 SEK.

In other words, we are talking about minor offenses, which in some cases are also hard to avoid. So far, Swedish haulers have calculated a certain amount of sanction fees, sometimes up to 200 000 SEK over a two-month period.
But now, they should allow for 800 000 SEK or one percent of turnover instead.
This is in a low-margin industry, where several haulages are struggling to even reach breakeven.
Who has the energy to run a business under such conditions?

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Fines imposed by the Swedish Transport Agency could devastate the Swedish haulage industry

By: Thomas Ström 3/1/19

On 1 March last year, the Swedish Transport Agency introduced new fines in the haulage industry.
As a result, many Swedish hauliers could face such high fines that they risk bankruptcy.
Of course regulations are necessary, but within reason.

In Sweden, there is a requirement to carry out checks on three percent of the days worked by drivers who are covered by the rules on driving and resting times. The Swedish Transport Agency and the Swedish Police Authority share the responsibility for carrying out these checks. This means that company checks are performed on half of the days and road checks are performed on the other half.

The EU has established the regulations that apply in all EU countries, but each member state decides the size of the fines and whether the driver or the haulier is liable to pay. The rules vary considerably between countries. For instance, in Poland the driver is charged a heavy fine for infringements. In Spain, on the other hand, the haulier is liable while the driver pays nothing.

In Sweden the driver is only checked for 28 days back in time and is subject to a maximum fine of SEK 10,000.
However, the Swedish Transport Agency can check the Swedish haulier that employs the offending driver for up to 12 months back in time and inspect the on-board computer for irregularities. Even minor infractions are registered and subject to fines.

So far, the maximum fine in Sweden has been SEK 200,000 or 10 percent of the haulier’s sales during the two-month period examined by the Swedish Transport Agency.
But as of March, the two-month ceiling will be raised to SEK 800,000 or 1 percent of sales.
This will wreak havoc in the Swedish haulage industry, which is already up against a severe shortage of drivers and low margins. 

Today all trucks and tractor units are equipped with digital tachographs, from which all manner of information can be retrieved. This, combined with the fact that each driver is required to insert a private driver card into the tachograph, allows the Swedish Transport Agency to retroactively monitor all the driver’s actions and vehicle use. 

Of course haulage companies should monitor their drivers’ actions and ensure they follow the rules, but because of the shortage of professional drivers in Europe, it is hard to protect hauliers from foul play. Many professional drivers work for less than a year with the same haulier, making it impossible to punish the driver retroactively. Instead, the haulier must bear the whole cost. The Swedish Transport Agency firmly maintains that hauliers are responsible for ensuring that their drivers know the rules and use the tachograph correctly.

Obviously I agree with this, but there needs to be some rhyme and reason.

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Do not be mistaken - we live in a democratorship

By: Thomas Ström 1/30/19

The general picture in Sweden is that we live in a democracy.
But after the crazy display in recent months to form a government, in combination with the media's unilateral reporting, I am very hesitant.
I believe that we live in a democratorship.

In previous blog posts during this fall, I have been writing about how wrong I think it is that our politicians do more or less anything to remain in power or to get a chance for increased power. The latest government formation is an excellent proof of this.

To emphasize my thesis that we Swedes live in democratorship, here is an explanation of the word translated from Swedish Wikipedia:

“Democratorship is a concept in which modern democracies are criticized for hypocritical democracy and lack of power distribution, where more protection is requested against tyranny of the majority.

The origin of the word is unclear. The term is often attributed to the French sociologist Gerard Mermet, but has been used previously by other people.

For example, author Vilhelm Moberg used the word in a debate article in Dagens Nyheter on December 14, 1965, where he criticised a government proposal for press support."

This is how Vilhelm Moberg's definition of democratorship reads:

"In a democratorship, there are general and free elections and there is formally a freedom of opinion, but politics and the mass media are dominated by an establishment that believes only certain expressions of opinion should be publicised. The consequence is that citizens live in a notion that they convey an objective and comprehensive picture of reality. The oppression of thought is well hidden, the free debate is silenced. However, it should be added that in the definition of democratorship, the fact of the matter is that the majority of people in this social state do not perceive themselves as living in a democratorship.”

This is exactly how it is in Sweden at the moment. We live in a democratorship while the majority of us believe that it is a democracy.

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I told you so…

By: Thomas Ström 1/16/19

New year, same traffic situation.
Gothenburg is growing fast, but there is a risk that when everything is done we are going to have an empty city center.


Last fall I wrote a debate article about how the current traffic situation is driving entrepreneurs towards bankruptcy. It was published in Swedish magazine GöteborgsPosten (GP), where we, just before Christmas, could also read about Albert Andersson’s Chark. They were forced to shut down their business in Saluhallen, where they had existed for 120 years.

120 years!

But now that 2019 is here, they have been forced to shut down their business. One of the owners, Magnus Knudsen, to GP:
– There are fewer customers now that everything is closed off. Soon the customers won’t be allowed here with their cars, and we cannot see any improvement for the next ten years, with Västlänken and all.


Well, I told you so.

I told you that I would not be surprised if there will be an increase in numbers of empty store premises within a few months, due to business owners who have been forced to close or go bankrupt because of the ongoing traffic situation in Gothenburg.

I am well aware that e-commerce claims large shares of customers from the stores. However, as far as I know, they are not buying their charcuteries online. As for other industries, there is no wonder why people choose to shop online before going to town. On the internet, the traffic flow is much better than in the city center. Regardless of your connection...

The traffic flow is also better in Partille (Allum), in Mölndal (Mölndal Galleria) and in Kungälv, where Kongahälla Shopping will be ready during 2019.
I understand the concerns of small business owners within the moat.

I did not want to be right in this scenario, but it really wasn’t very hard to predict. The question is – how could the politicians and decision makers not predict the same thing?

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Chalmers researchers confirm my fears from 2014 regarding cheating on ships' sulphur emissions

By: Thomas Ström 10/24/18

Now there’s proof of what I predicted here on the blog in 2014 and 2015.
Researchers at Chalmers have found that shipping companies are cheating on Northern Europe's sulphur emissions regulations.
In extensive remote measurements made by the researchers with their own method, it appears that every tenth ship is in violation of Northern Europe's sulphur emission regulations.
"Some shipping companies seem to have put it in system to cheat," says Johan Mellqvist, Assistant Professor at Chalmers University of Technology in Gothenburg.
"We can see clear differences in compliance depending on who owns the vessels.”

Chalmers researchers have developed their own monitoring system. It is based on air measurements with a sniffer, which creates a physical and chemical analysis of the air. The sniffer is then supplemented with other technologies, such as optical remote sensing and automatic ship identification systems.

The air measurements are made both at fixed stations at the port of Gothenburg and the bridges across the Sound and the Great Belt, as well as from an airplane that moves around Denmark and across the English Channel.

The system developed by the group at Chalmers presents good results. The system has actually been put to use for sulphur emission monitoring in a number of countries.
During its test period, the researchers have found that there is a lot of cheating in the northern European so-called "sulphur emission control area" (Seca). What is remarkable is that it is not about random variations. The violations follow clear patterns.
"We can see that rarely incoming ships, including cruise ships, violate the rules more often. Also, it is more common for ships to release too much sulphur on their way out of the area than on their way in, as they risk an inspection on board",  says Johan Mellqvist.

In the eastern part of the English Channel, near Seca's border, 15 percent of the ships violate the rules. Around Denmark that number is 10 percent and at the fixed stations it is 2-5 percent.

Nevertheless, the shipping companies can save a lot of money when breaking the rules, according to Professor Johan Mellqvist. He believes, among other things, that the more expensive low sulphur fuel can provide additional costs of 1 million SEK for just a return trip between England and Saint Petersburg.

For my part, I am behind the new monitoring system to 100 percent. What the researchers have now confirmed, I already predicted in 2014.

Here is a selection of those blog posts:

2014-10-03
The new directive regarding sulphur regulation will be in force from January 1st of 2015. This means that the sulphur content of the flue gas from all the ships in Northern Europe must reduce their emissions from the current permissible level of 1.0 percent to 0.1 percent.
But since there will be no follow-ups, I am certain many shipping companies will ignore the directive and still charge higher fees even though they have not made the investments in environment as required by the directive. 
Because the big question is: How will this new directive regarding sulphur regulation be regulated and by whom?
As of today, there is no one. 

2014-10-10
I am convinced very few of the companies will carry these environmental investments through, which is a necessity for this to become a reality. And why won’t they do it? Well, there are no helpful tools and no authority has been appointed responsible for ensuring that the new rules are followed.  
For NTEX, the new directive will lead to distinctively higher costs for freight across the North Sea, and above all, the Baltic Sea. We are talking about several millions Swedish crowns which we will have to invest in our transportation fleet. In the end this affects the customers.

 

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Add professional board members to the municipal corporations

By: Thomas Ström 10/9/18

The directors should not be certain of their positions until their pension

 

Public limited companies and boards need more professional business representatives.
And by this, I primarily mean within the board work.
Today, these corporate boards consist solely of confidence-elected municipal politicians, who very rarely have any experience of running a commercial company and everything that that entails.

Gothenburg is without comparison the one municipality in Sweden which has the most municipal companies. On the municipality's website there is an organisational list with over 40 different limited companies. The corresponding number in Stockholm is 20.

In these boards, there are no professional members from the business sector, except in exceptional cases when the municipal politician is also a trader. However, it is in the capacity of an elected official they have ended up in a municipal company board.

It is also these boards that, together with the Bureau of the Municipal Board, appoint and dismiss the highest officials, such as the CEOs of the municipal companies.

When such a board appoints a CEO with long experience from the business sector, it means that they are hiring a person who has much more experience from running companies than themselves.

Some questions that arise at this point are: How can this inexperienced company board make demands on its CEO and how should they know when it is time to dismiss the director in question?

The answer is that they can and do not know when it’s time. If you succeed in becoming a CEO of a municipal company, you will remain there until your pension. Provided that you are in line with the law and you yourself do not want to move on from the position, of course.

I think this is wrong. I believe that all corporate executives, with the directors at the forefront, should be challenged on a regular basis.

Therefore, it is extremely important that more professional business representatives are present in the municipalities' boards.

Currently, several municipal companies are examples of sheltered workshops, which occasionally are saved by municipal tax assets. Just look at Got Event AB, who runs Ullevi and Scandinavium. Last year, the company was responsible for the European Championship in equestrian sport, which was planned to give a plus to the cashier but instead became a financial failure. The bill for the city of Gothenburg and its taxpayers was at least 50 million SEK. Furthermore, Got Event loses around 150 to 200 MSEK each year, but receives group contributions from Göteborg Energi, among other companies, in order to continue its business.

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About Ströms blogg

 

Welcome to my blog. Here I will write about transport and logistics and much more ...

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