Certain factors are weighing heavily in locating a logistics center in Europe — access to major import/export hubs, Europe’s evolving manufacturing centers, proximity to consumers, the high cost of fuel and congestion. Add these factors together and the single European distribution model becomes quickly outdated.
“The single distribution center has — for many industries — outlived its useful life, particularly after 10 countries joined the European Union,” said Marcel Stuve, managing partner of supply chain strategies for Buck Consultants International of Nijmegen, the Netherlands. “Many companies maintain a central center but satellite centers that deal with the final distribution are more popular.”
The bottom line is that with mega-size ocean vessels now calling at major seaports such as Rotterdam and Hamburg, and air cargo hubs centered at Frankfurt, Paris, Amsterdam and London, large distribution warehouses make sense in or near these locations, with regional centers serving specific markets.
“Countries like the Czech Republic and Hungary are becoming interesting alternatives for regional distribution for these reasons,” Stuve said. “This is especially the case when comparing German labor rates against those in the Czech Republic. If one puts a distribution center in Prague, a truck can still access the heartland of Germany in [less than 4 hours].”
So the battle is on for traditional distribution locations to retain and attract business while others pull in secondary activities.
Hub Access
The highest concentration of logistics activity remains around what Europeans call the “logistics banana” — an area stretching from the ports of Rotterdam and Antwerp through the Netherlands, Belgium, France and the western portion of Germany. Even Switzerland offers opportunities, although it is constrained by the Alps and rules governing nighttime transportation.
The Port of Hamburg feeds activity with its reach into Central and Eastern Europe. Demand for warehousing is high in Hamburg and in short supply, reason enough for Kuehne + Nagel (K+N) to open a new logistics center there.
K+N is also investing nearly $11 million in a center close to the Luxembourg airport.
In Flanders, Kumho Tires, a South Korea-based manufacturer, has chosen integrated logistics company Ewals Cargo Care in Genk to manage its European distribution center (DC). The DC covers about 19,200 square yards and has a direct rail connection. Flanders competes head on with the Netherlands for logistics operations.
Amsterdam’s Schiphol Airport region has attracted well-known companies such as Intel, which recently signed a 10-year lease at a logistics facility at Schiphol-Rijk.
“The operation was already in the Netherlands, but the core has shifted because of the fact that many goods are shipped by their suppliers and are cross-docked and/or merged in transit,” said Ron Roest of the Holland International Distribution Council. “Therefore, [Intel] wanted to be closer to a major airport.”
Consequently, Frans Maas Logistics Schiphol, which handles Intel’s logistics, is leasing a center from ProLogis at Schiphol-Rijk.
“The airfreight share is currently around 15 percent but will grow strongly during the next several years for inbound and outbound traffic, which is why a location in the vicinity of the airport has more efficiency benefits within the logistics chain,” said Cosmas Hoefnagels, director of logistics operations for Frans Maas.
UPS is also investing in the Netherlands to expand its freight forwarding arm. Plans call for building a multi-client European DC dedicated to providing logistics, distribution and transportation services in Roermond, an investment of about $11 million.
Germany’s state of Saarland serves the logistics needs of Dachser GmbH & Co. KG, a $2.5 billion global logistics service provider, and Amer Sports Group, a manufacturer of sports equipment.
From Dachser’s 160,800 square yard distribution location, products can be transported across Europe within 24 to 48 hours. Amer Sports’ location reduces delivery times to European sports shops and improves customer service.
In France, freight forwarder Schenker AG is expanding its logistics capacity by 54,000 square yards at its location in Gennevilliers, near Paris.
“We have had positive customer response and strong volume growth during the past few years, which has pushed our existing facilities to capacity limits,” said Joel Moebel, chairman of the management board and regional director, Europe West, for Schenker. “With the new terminal, we will be better prepared to meet the demand for high-value logistics services.”
On the Fringe
Farther afield, Bavaria is attracting growing logistics operations. Tchibo Logistik GmbH is restructuring its logistics operations with a new facility in Neumarkt.
Nearly 200 branch offices and 4,000 warehouses of food retailers and specialty dealers are being supplied from Neumarkt. Home improvement market retailer Hornbach has also set up its logistics center in Pleinting in Eastern Bavaria.
Hornbach AG will soon be supplying all the DIY markets and garden centers in Bavaria, Saxony, Austria, the Czech Republic, Slovakia and Slovenia from its new logistics center.
Mediterranean cities like Barcelona are positioned for logistics with its Barcelona Centre Logistics, coordinating synergies between the local logistics community.
The city itself offers more than 4,000 acres situated strategically for this function. ZAL, a logistics zone comprising 494 acres in Barcelona, offers multimodal capabilities with connections by sea, road, rail and air. About 50 companies are located within ZAL.
ProLogis recently acquired a 528,400 square foot facility at Interporto in Bologna, Italy, a multimodal and logistics center covering 2.4 million square yards.
“We are thrilled to expand our presence in Bologna,” said Alexandra Lopes, country officer for Prologis Italy.
Interporto is an integrated system of logistical, rail and road infrastructure designed for freight shipment and transport. Plans call for expanding Interporto by 2.64 million square yards. The freight village already hosts more than 81 national and international freight forwarding companies, custom offices and a public warehouse.
Across the Channel
In Wales, in the United Kingdom, a new 35-acre rail freight park in Cardiff is slated to be developed alongside the existing Cardiff International Rail Freight terminal.
The new park will help shift goods from congested roads to the railway. When completed, it will house 435,000 square feet of warehousing and freight handling facilities.
“This park will help meet the increasing demand for distribution space within the region, as well as enable logistics companies and manufacturers of bulk goods to transfer a huge amount of traffic from the often-congested M4 to the rail transport,” said Paul Williams, head of regeneration for the region for the Welsh Development Agency.
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