18
Issue 4 2012
///BENELUX
A move to the country does logistics a power of good
The Benelux countries remain as important as ever to European logistics, but subtle changes are occurring. Despite the recession, congestion remains an issue and many logistics firms are seeking out less cluttered and lower-cost land, oſten in quite rural areas. Even mighty Rotterdam has outsourced a good deal of its container activity to smaller ‘out ports’.
Big isn’t always beautiful for Dutch logistics industry
Mark Steegh, Dutch branch manager and project director of supply chain consultants’ Total Logistics’ says that as well as a move of activity away from the traditional main hubs to barge terminals and inland container terminals, there has been a move by some smaller and medium-sized customers away from the big multinational third-party logistics providers (3PLs) to smaller concerns. “The larger 3PLs are focussing more on the major multinational customers, while the smaller companies are looking to smaller 3PLs in order to obtain a more personal service,” he explains. “The disadvantage of the smaller 3PLs used to be that they couldn’t offer things like key performance indicators (KPIs) but many of them have now developed this.” The smaller 3PLs tend to use
facilities of around 30-40,000sq m rather than the giant 100,000sq m behemoths that many of their larger competitors have opened in the Netherlands. “If you’re one of 20 customers in a huge shed, you know you’re just not going to get top priority so there is a move to smaller facilities,” says Mark Steegh. Coupled
with the shiſt to
smaller 3PLs has been a move away from the congested hotspots
native Germans.) The move to the country
is Mark Steegh
of Rotterdam and Amsterdam/ Schiphol to more rural areas, especially those close to the Dutch- German border. “There will always be people who need speed and will therefore want to be close to the airport, but if it’s not that important then it can make sense to go to the
‘backlands’,” Steeg asserts.
Warehousing could cost €100-120 per sq m near Schiphol but that drops to around €45psqm in the more rural areas. The differential compared with the Rotterdam area is much less marked; there, rates are around €60psqm. Nor are there any serious
difficulties in acquiring labour in rural parts, Steeg maintains. “In fact, often it’s easier because you can get people from across the border in Germany.” (Often these will be East European living there rather than
much more pronounced in the Netherlands than in Belgium, Steeg believes. Here, there is heavy congestion in the Brussels and Antwerp areas; journeys that should take only 1½ hours might take 3½ hours during peak periods, which makes life very difficult for logistics planners. Perhaps as a Dutchman he is
slightly biased, but Mark Steegh believes that the Netherlands does have an edge over its smaller neighbour in terms of lands costs, congestion and infrastructure quality. Belgium is often perceived as having more labour issues too, he says, although the Belgian government is generous with subsidies to entice operators in. The recession has not totally
passed Benelux by, but logistics firms have coped by retaining their permanent labour and dispensing with temps. Volumes are now recovering again, Steeg believes. But the sector which is having
difficulty are the actually road hauliers themselves: “It’s not so hard for the 3PLs – it’s the transport operators who are struggling with high fuel prices and labour shortages.” So far, hauliers haven’t been able to increase prices but
with more companies going out of business, the market could be in for a major correction soon. For all that, the Netherlands has maintained its position as the number one country in Europe for trucking, although the drivers themselves are just as likely to be east Europeans as Dutchmen these days. Total Logistics does a lot of
quotation and tendering work on behalf of its clients and, along with the ever-present focus on costs, there has been a tendency for shippers to demand a lot of flexibility from their 3PLs, which can often amount to a hidden cost. Much of the peakiness seems to stem from customers’ sales practices, with salespeople often encouraged to cut prices towards the end of the month which, while it may boost sales, leaves the logistics provider with a problem. “In the electronic sector, in particular, 50% of turnover can be within the last week of the month,” Steegh comments. The 3PLs are looking at ways
of differentiating themselves, for example by coming up with ways to managing these peaks and also offering increasingly sophisticated IT solutions. These are important to customers, not only for tracking goods through the supply chain, but also for accounting and invoicing purposes too.
Benelux still central to
European logistics
Benelux remains an optimum logistics centre for many businesses in Europe, says LCP Consulting chairman, Professor Alan Braithwaite. This is particularly so where a large proportion of the goods involved are imported by sea because of
logistics investment. Recent developments include
clothing retailer H&M’s siting of a huge logistics centre serving a whole swathe of territory, including Northern France as well as the whole of Belgium and Holland. “No one has really challenged
Holland and Belgium’s dominance of logistics in northern Europe,” Professor Braithwaite argues. He points out that a facility in the Benelux can reach around 70% of the west European population by truck within 24 hours a greater proportion than any port region anywhere else in Europe. Despite these locational
Alan Braithwaite
the continued dominance of the ports of Antwerp and Rotterdam. It make sense to keep logistics activity as close to the point of entry in to Europe as possible, he explains. True, both countries are
suffering to some extent from congestion on their networks, but the
transport Benelux
countries are not alone in this. And there have been efforts by some of the regional governments in the two countries, notably the Wallonia area of Belgium, to attract
advantages, the Benelux countries have not been subjected to the sorts of swingeing increases in logistics property rent levels that have afflicted some other parts of Europe, such as the UK’s ‘Golden Triangle’. “Dutch and Belgian prices are not too bad, and are at around €60-70, perhaps €80 per square metre,” says Professor Braithwaite. This equates
to
around £6 per sq ſt in British units. Nor is there much sign of rent
levels being pushed up, owing to the weakness of the Belgium, Dutch and wider economies.
European
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