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Issue 3 2014 Freight Business Journal


///ITALY Over the Alps to the toe of Europe


As Hannibal found in 200BC, getting over the Alps to Italy is no mean undertaking – and even today it presents a few challenges to transport operator. But the rewards can be well worth it, especially as the country is showing the first signs of emerging from recession.


The economy: still work to do


With Italy’s new Prime Minister Matteo Renzi announcing $14 billion-worth of tax cuts and economic stimulation measures, it is clear that Italy’s troubled economy isn’t quite out of the woods yet. While the country never quite plumbed the depths reached by Greece or Spain, the state of Europe’s third-largest economy has been cause for concern. Renzi says that the target of


his cuts is the country’s bloated state sector, and not the wealth- and jobs-generating part of the economy. Currently, Italy is facing record levels of unemployment, especially among young people. The European Union has downgraded its outlook. While some other EU countries


are showing signs of growth, the Italian economy contracted by 1.8% in 2013, the jobless rate is around 12% - with youngsters hit especially hard – and businesses have been closing at a record rate. According to the Italian national statistics office, the country’s industrial production has fallen by a quarter since its peak, reached in 2008. And while exports have now recovered, domestic consumption has collapsed as unemployment has soared. There have though just a few


glimmers of hope lately – in the last quarter of 2013 the economy grew by a modest 01.%, which means that, technically at least, Italy is no longer in the grip of the


recession that has reduced the size of its economy by 9% or so. While some economists dismiss the recovery as a blip, there are signs that Italy is beginning to pull itself out of its economic morass through increased exports – provided Italy’s exporters can find markets, especially in a still economically-troubled Europe, and contain their costs, which are relatively high. Many of the country’s problems


are deep-seated and institutional – a long-standing unwillingness to tackle a high public debt and a lack of competitiveness, for example. The problem is that any Italian


leader’s room for manoeuvre is limited, between the unions unwilling to concede much in the way of pay or job cuts and businesses reluctant to shoulder a higher tax burden. The country has had several years of austerity now and people are unlikely to submit willingly to more of the same. The other issue Italy has long


faced is its unstable politics, although this is something Prime Minister Renzi is trying to address with new laws designed to create bigger political parties and more sustainable coalitions. For the moment, though, the new prime minister must try and control an unstable and unwieldy coalition – a factor that has hampered the country’s ability to make decisive political and economic reforms.


Despite the difficulties, a


strong and stable market, says Davies Turner


Davies Turner operates ad hoc full load trailers all over Italy in partnership with one of the country’s largest distribution and forwarding companies, Sittam. But it also offers three scheduled groupage services a week, using double-manned trucks, again in partnership with Sittam, its partner of the past two years. Head of overland networks,


Danny Southby, says: “Italy has been a core market for us for many years, and our imports have grown massively, while exports


have


also shown a recovery.” With the new Italian government in place, Southby hopes that there will now be a sustained recovery in the market. He points out, though that, despite the current difficulties, it has always been a strong and stable market and one of the top four economies in Europe. It is among Davies Turner’s top three companies in terms of requests for quotations and among the top five markets in terms of import and export volumes. “We have actually seen some the


of footwear and fashion


manufacturing that had migrated to Eastern Europe come back to Italy,” Southby points out. “It would seem that costs have levelled out a bit.”


Imports from Italy to the UK are


a real mixture, both in weight and volume terms and type of goods: “There’s the lighter fashion and footwear goods from the north, but


there’s also heavier engineering goods, car components and the like, while from the south there’s also wine.” As a premium road groupage operator, Davies Turner doesn’t get too involved in the heavy bulk shipments of commodities like olive oil or tinned tomatoes that tend to be moved in full load containers as journey time is not critical. A lot of Italian manufacturing


is concentrated in the segment of the country from the Florence (Firenze) region northwards, with agriculture predominating south thereof. The capital Rome, apart, the north is also where the country’s population and consumer base is also concentrated. “Italy does present challenges,


because it is such a long, thin country’” Southby says. “Lead times to the south can be a bit longer than to Milan.” On the other hand, there is a


very good mixture of cargoes in weight and volume terms, in both directions. From the UK, heavier traffic predominates and there is a mixture of electronics, engineering products and all sorts of chemicals, pigments and dyes. “There has been a recovery in


Italian buying, and the market is becoming a bit stronger” Southby continues. “So much so, that we’re considering stepping up our shuttle groupage services to daily in both directions.”


Europa looks to daily departures


Italy is an important market for Europa, the company taken over by former RH Freight boss Andrew Baxter, and his aspiration is to move to a daily groupage departure as soon as possible. “Italy is nearly daily now, and I want to make sure it is daily very quickly.” Europa works with its long-


standing agent, Bianci, a large forwarder with a head office in Milan – an arrangement that dates


back to long before Europa’s sale to its new owners. Baxter adds; “The Italian


market has suffered from a huge recession, but we are seeing some reasonable development.” The improvement to the


Italian service is part of a general move by Europa to upgrade all its groupage services from the UK to EU destinations to a daily frequency (Monday-Friday) wherever feasible.


Two-way growth for Bring


Bring Logistics has rapidly expanded its services from the UK to Italy in the two years since it entered the market, says senior development manager, Allan Marsden. At the UK end, a new branch in Birmingham has opened and is sending groupage trailers two days a week – Tuesdays and Fridays - to partner Euronord International’s depot in Como, northern Italy. And in Como itself, Euronord has


moved to a new 2,000sq m depot astride the main Milan-Chiasso A9 autostrada. This has ten loading bays with dock levellers and, for non-EU cargo, in-house customs.


Marsden says: “Italy is a very


strong market for Bring, and it’s been growing rapidly.” Euronord has also introduced


a regular nightly domestic trunker between Como and Prato. This has reduced journey times between the UK and Tuscany which, as well as being a highly desirable tourist region, is also a major industrial area. Prato itself is the centre of the Italian shoe- making industry. As well as the Birmingham


services, Bring also has twice- weekly groupage services between Manchester and Como, and it also handles full loads throughout the week.


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