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Covid-hit Italian buyers discover the internet


16


The Covid crisis has had a profound effect on business and consumption in Italy, says Andrea Dossi, transport specialist at Arvato Supply Chain Solutions. “It had a great impact on the market in 2020, both in business to consumer (B2C) and the business to business (B2B) segments.” Arvato’s transportation


management system simplifies the task of managing multiple logistics providers and also guarantees smooth data exchange, integrating them into a neutral, global, SAP- based EDI platform. It connects nearly 200 carriers worldwide, including a number in Italy. Dossi explains that, for


Arvato in Italy, B2C shipments surged during the crisis by no less than 250%, as shops were


shut and Italian consumers – hitherto by no means Europe’s most enthusiastic online buyers compared with the UK or Germany – turned to online marketplaces en masse. While B2B business naturally


did less well during the pandemic, overall Arvato’s business was up by around 175%. It wasn’t entirely plain sailing,


though. Arvato’s Italian carriers found that B2C last-kilometre deliveries were more expensive than for B2B and this, coupled with a general shortage of drivers, forced many of them to ask for increased rates. Drivers were particularly hard to find during the crisis, Dossi adds. Even getting goods into the


hands of domestic consumers proved tricky in the face


Italy takes to the rails


The global driver shortage crisis that emerged in 2020 will


says container


persist into this year, terminal and


intermodal service provider, Contship Italia. According to new research from the International Road Transport Union, European companies are expecting a 17% shortfall in drivers this year. This will have an adverse impact on the supply chain and ultimately slow down the economic recovery of Europe. To


mitigate the risk,


Contship’s intermodal solutions continue to minimize its clients‘ dependence on trucks and to ensure supply chain continuity in both Italy and across Europe by providing alternatives to receivers and shippers, especially for moving large quantities of goods over long distances. But amid the pandemic,


Contship Italia has made significant progress in business development. Its new business targets revealed in the fourth quarter of 2020 included a goal of offering over 1.8 million teu in new handling capacity, including gateway and transhipment capabilities to global carriers. Meanwhile, the target is for


intermodal transport modal share to reach 50% maritime and 50% continental and intra- EU trade by the end 2023. The first phase of La Spezia


Terminal (LSCT) aims to add 300,000teu to current handling capacity and increase rail share from the current 32% to 40%. In December, LSCT enhanced its capability to handle ultra large container


ships with higher


tonnage with enhanced draft available at Fornelli East (-15 m) and Fornelli West (-14 m), immediately adding an extra 300/400teu per call. Contship Italia’s multimodal


transport operator Hannibal currently offers over 150 weekly trains between the main


Italian and European


destinations (including Basel and Rotterdam), out of which 120 are directly operated by the Group’s rail traction company, Oceanogate


Italia, using 11


locomotives and 435 wagons. Hannibal also provides first- mile and last-mile trucking, with a fleet of 150 modern vehicles. Improved Gotthard tunnel


capacity through the Alps offers faster transit times and, with investment in national and international inland rail hubs, Hannibal can now


of Italy’s very strict social distancing rules, particularly in Covid hotspots like the Bergamo areas, he recalls. “Contact between drivers and other people was forbidden, so we had to find alternatives, including a pin number system so that the end customer could confirm who they were.” A


large proportion of


Italian citizens live in blocks of flats rather than houses, so identifying who is who is particularly important. However, “the pin number system was very effective,” Dossi states. The changes in the Italian


market will probably be long term, he continues. “Italy was quite behind in


e-commerce


compared with Britain or Germany for example. In Italy,


manage trains up to 750m long. Operating to and from Contship’s privately-owned Rail Hub in Milan, Hannibal will continue to offer premium train services across the Alps to the southern Europe markets, providing Asian customers with an alternative, efficient routing via Italian ports, to transport goods over the Alps to Austria, Switzerland and Southern Germany.


UK and Ireland connections


On the continental side of the intermodal business, Hannibal recently added three additional round trips per week between Rail Hub Milano and Rotterdam Botlek terminal, adding to the seven round trips currently operated between Milan and Rotterdam RSC terminal, providing direct connections with short-sea services with the UK, Ireland and Portugal, and avoiding the need for transfers via truck between rail and the maritime terminal. Contship will continue to expand services to Rotterdam and the UK for continental volumes, adding new corridors in 2021 and 2022. In Asia, during the second 2020


half of Hannibal, in


partnership with Rail Cargo Austria and DBO, launched a


70% of people who did an e-commerce transaction last year were doing it for the first time.” Many if not most of the new


e-commerce buyers will not go back to buying from bricks and mortar shops, he predicts. While there is not yet any data to show whether Italy has in fact caught up with other countries in respect of e-commerce use, the probability is that it will if it has not already done so, allowing for such factors as the average age of the population. Overall, most buyers’


experience of e-commerce was pretty positive. There were some delivery delays in some regions due to the sheer volume of traffic thrust onto delivery systems, exacerbated by the closure of some hubs in


new rail service from Xi’an in China to Contship Italia’s Rail Hub Milano (RHM), offering a 14-16-day transit-time, helping to diversify and better risk- manage its customers’ supply chains. The service is one of two


that links Italy with China via RHM and has enabled Contship Italia, alongside its sea offerings, to provide vital support to EU-China trade during the pandemic. It


has also expanded its


footprint in Asia by opening the first Hannibal representative office in China in late 2020. Meanwhile, from March 2021, it will be testing a new rail service between Chengdu and Melzo. Based on customer feedback, it will then implement a regular service. La Spezia Container


Terminal (LSCT) had meanwhile partnered with ARMS srl to test an automated system to perform plug and unplug operations on reefer containers. Founded in 2019, ARMS srl develops, builds, and installs robotic connection systems and remote monitoring and transmission of data within terminals and on board ships. Italian


Issue 3 2021 - Freight Business Journal


the most Covid-affected spots, but consumers on the whole accepted the reasons. Like almost all businesses in


Italy, Arvato’s own operations were also affected by the crisis. Where possible, employees were asked to work from home and the arrangements worked pretty well, says Dossi. The customer service team performed exceptionally, he says, adding: “Before Covid, it was already possible to work from home, for one day a week, for example. I think it will in future become much more common, for every company.” Of course, home-working


wasn’t an option for warehouse workers but Arvato was able to maintain safety standards and sickness levels over the past year have been very low. Other factors besides Covid


have affected the Italian freight market, including Brexit for the specifically UK- bound or originating business. Undoubtedly, the cost of shipping to the UK has gone up, says Dossi, and he is pretty


and maintain efficiency, Contship Italia had to adapt some


intermodal schedules.


Nevertheless, despite the challenges faced in the last year, it is now seeing a strong rebound in volumes with demand increasing. Contship, with its maritime


terminals in La Spezia (LSCT) and Ravenna (TCR) and its intermodal network, maintained throughout the pandemic a strong commitment to support the Southern Gateway logistics system, through efficient terminal operations and integrated high-frequency rail services, connecting Italian ports to the main logistic hubs in Italy and across Southern Europe. For the future, Contship


port volumes


were hit hard by Covid and blank sailings, like many others around the world. To better manage resources


Italia sees great opportunities related to the deployment of the EU Recovery Fund, which is focused on innovation, digitalization, and sustainability. The company is well positioned to benefit, directly and indirectly, from these opportunities and will continue to work hard to develop an efficient, alternative transport system that provides access to Italian and European markets through


a mix of


efficient quayside operations and integrated intermodal services. The railway


///ITALY


confident that the number of purchases by Italians from UK- based e-commerce retailers – 7.4 million in 2019 – will have reduced because of the difficulties. Arvato vice president


transport management Berthold Reinke, adds that there has been a significant increase in transport costs from carriers, and the extra charges are likely to remain in place. More generally in Europe, the


driver shortage is affecting the market, although this is less of an issue for Arvato’s long-term business - but it can push up rates in the spot market. This in turn increases the cost of one- off shipments, for example for special promotions. For the future, Dossi predicts


that e-commerce will continue to grow in Italy. No one yet knows when non-essential shops will reopen, and how smoothly the vaccine roll-out will progress but with or without them the online segment of the market will surely continue to increase.


represents the present and the future of freight transport , it says, adding that it looks forward to a comprehensive investment plan and economic incentive scheme capable of levelling the playing field, thus enabling a sustainable and innovative ‘logistics renaissance’. The port-rail freight option


offered will continue to provide shippers with an affordable alternative


compared to


air, when the reliability of containership schedules dropped to a record low. During the initial Covid-19 global lockdown, when ship schedules


were disrupted,


many shippers were already starting to see rail as a desirable option. According to China State


Railway Group, there were 12,400 China-Europe freight train trips last year, up 50% from 2019, while demand continued to accelerate, due to the tight capacity in air and the container shortage in sea freight. Contship Italia believes that


the tight capacity in air and sea freight will facilitate the shift to rail, and it remains optimistic for the medium-term growth in the new intercontinental rail option, despite the persisting uncertainty over global economic recovery.


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