Background: Regulatory requirements in the European Road Haulage Market
EU law has been harmonizing the regulatory framework of the European road haulage market for over 45 years, focused on:
- granting market access in all Member States to service providers established in one Member State,
- as well as harmonizing minimum (professional, financial and social) standards to prevent unfair competition.
The EU has recently updated the relevant legislation in a new “EU Mobility Package”.
Shippers and freight forwarders are not affected
Traditionally, the only road haulage operators, i.e. trucking companies were covered by the regulatory provisions regarding the European road haulage market were.
Their customers (shippers or freight forwarders) were not affected by those regulations. The activities of freight forwarders or other intermediaries may be regulated in some Europeans jurisdictions such as France, Italy or Belgium, but up until now EU law makers had spent little time harmonizing access to these activities.
Sec. 7c of the German Road Haulage Act
In 2001, German legislators introduced sec. 7c of the German Road Haulage Act, which provides:
7c – Liability of the Customer
The following applies to persons or entities entering into a contract of carriage or a freight forwarding contract with a services provider as a part of their business (Customer). The Customer must not allow services to be performed under such contract, if the Customer knows that
- the service provider does not hold a German license or EU license or is using such license in breach of applicable laws,
- the service provider is performing the road haulage with drivers not meeting the applicable nationality requirements or not having a driver attestation in line with EU regulations, or
- the service provider will be subcontracting the performance of the contract to a carrier or freight forwarder who will permit the transport to be carried out under the circumstances stated in no. 1 and 2 above.
Knowledge includes actual and constructive knowledge, the latter meaning that the Customer could have known those circumstances if exercising due diligence.
If shippers or freight forwarders together with haulage operators are in breach of the duties set out in sec. 7c of the German Road Haulage Act, it will not affect the validity of the contract, however, the customer will be subject to heavy penalties:
- The manager in charge of compliance will be guilty of an administrative offence (Ordnungswidrigkeit).
- The company may incur heavy financial penalties, especially if the breach was ongoing for a longtime.
- The breach may be published.
German case law on constructive knowledge
Sec. 7c is important from a compliance perspective, because of administrative practices and case law regarding constructive knowledge:
- German shippers or freight forwarders must check whether a road haulage operator is properly licensed. Failure to do so, risks the appearance of having constructive knowledge of a missing license.
- Furthermore, constructive knowledge may also be implied by failing to check paperwork carried on board of a truck by the driver. At the very least random checks should be carried out in regular intervals and need to be properly documented.
New article 14a of the Regulation (EU) 2020/1055
With the introduction of article 14a of the Regulation (EU) 2020/1055 EU law imposes a duty on EU Member States to implement legislation similar to sec. 7c of the German Road Haulage Act. Arguably, the new requirements go even further than the current approach taken under German law.
Article 14a - Liability
Member States shall lay down rules on sanctions against consignors, freight forwarders, contractors and subcontractors for non-compliance with Chapters II and III, where they knew, or, in the light of all relevant circumstances ought to have known, that the transport services that they commissioned involved infringements of this Regulation.
As it is customary in the EU, penalties for breach are decided on a national level, but every EU Member State is under an obligation to implement an adequate compliance structure. Whilst the changes introduced by Regulation (EU) 2020/1055 will apply from 21 February 2022, Member States may enforce penalties immediately providing the tools for prompt enforcement of the new provisions, or at least close observation of any legislative processes on a national level.
EU-wide impact on shippers and freight forwarders
To comply with article 14a national law makers need to implement the new sanctions regime, however, shippers and freight forwarders established in Europe should also introduce and document proper compliance procedures, ensuring that:
- road haulage operators used by them (directly or as subcontractors) are properly licensed,
- drivers, who do not meet the relevant nationality requirements (EU nationals and some cases treated likewise) have the required driver attestation, and
- cabotage restrictions are adhered to.
To comply with the existing German liability provisions, shippers and freight forwarders should:
- include provisions requiring service providers to act in compliance with the applicable regulations, to provide relevant documentation on request and to allow audits if necessary, in their standard contracts of carriage or freight forwarding contracts including road transport.
- keep records showing they checked the license of the road haulage operators contracted by them or they imposed a duty on their contractors to carry out such checks on their subcontractors and to document this.
- warehouse providers should carry out and document random checks of drivers / documentation on board.
German shippers and freight forwarders familiar with these requirements should monitor legislative developments and check whether their standard contracts and compliance structures should be updated. Shippers and transport intermediaries in other jurisdictions may have to introduce new practices if their national laws did not provide for similar liability provisions already.
 See Council Directive 74/561/EEC of 12 November 1974 on admission to the occupation of road haulage operator in national and international transport operations; followed by Council Regulation (EEC) No 881/92 of 26 March 1992 on access to the market in the carriage of goods by road; followed by Regulation (EC) No 1072/2009 of the European Parliament and of the Council of 21 October 2009 on common rules for access to the international road haulage market.
 See, for instance, Regulation (EU) 2020/1055 of the European Parliament and of the Council of 15 July 2020.
 Second sentence not included, not a literal translation.