The Netherlands: Logistics gateway to Europe

The region’s transport infrastructure, seaport and airport proximity, general business environment, and multilingualism offers strategic advantages to U.S. shippers looking to tap into Europe’s biggest consumer markets.

By Dagmar Trepins -- Logistics Management, 5/1/2007

• Capacity boost for Roterdam
• Amsterdam sets new records
• RFID investment
• Connections to the hinterland
• Staying competitive

A 2006 survey commissioned by Capgemini and ProLogis ranked the Netherlands as Europe's "most desirable" location for European Distribution Centers (EDCs), especially in the high-tech and electronics industries as well as the food and beverage sectors.

According to the report, the Netherlands accounts for 51 percent of all European distribution centers within the EU market, with more than 9,000 foreign companies using the region as their distribution hub. Among them are U.S manufacturers like Apple, Boeing, Coca-Cola, Dell, Foot Locker, IBM, John Deere, Procter & Gamble, Reebok, Timberland, and Tyco Electronics.

Following U.S. clients and attracted by the European market potential, U.S. logistics providers have also established sites in the Netherlands. Schneider Logistics was one of the first U.S. logistics providers to start operations in the region. And when FedEx launched its first pan-European 3PL business, it based its Supply Chain Services operation in Eindhoven. Another big U.S. player, Menlo Worldwide, expanded its European multi-client logistics center in Eersel to a capacity of 350,000 square feet in 2006.

"The Netherlands is often called the Gateway to Europe, which makes sense if one looks at Rotterdam, one of the leading ports in the world, and at the Amsterdam airport, Schiphol, which is the third largest airport in Europe," says Dirk't Hoof, president and CEO of Holland International Distribution Council (NDL/HIDC), a private, non-profit organization providing matchmaking services for logistics partnerships in Europe.

Gantry cranes are delivered for the ECT Euromax Terminal at the Port of Rotterdam, currently under construction.

A majority of U.S. companies putting the Netherlands to work as a logistics hub use Europe's largest seaport, Rotterdam, as their gateway into Europe. In 2006, 378 million metric tons of goods were handled in the port of Rotterdam. During that time, container throughput rose by 4 percent, totaling 9.7 million TEUs for the year.

Due to this rapid growth, however, the port is facing congestion problems, restrictions on empty containers, and strikes that are putting pressure on port facilities, manpower levels, and overall operations. Therefore, Hans Smits, Port of Rotterdam Authority CEO, is laying his hopes on the port's expansion projects to keep its leadership position in the region.

"Virtually the whole of the port is continuing to operate at full capacity," says Smits. "With the current terminal capabilities, it's possible to approach the maximum growth scenario. Only when the major expansions, such as the EMO coal terminal and the Euromax container terminal, have been completed will it be possible to accelerate growth."

However, Smits is optimistic. The port has secured the first large customer for its prestigious project, Maasvlakte 2, which encompasses nearly four square miles of industrial land adjacent to deep water. And, a contract was signed last year with AP Møller for a container terminal in Maasvlakte 2. The terminal has the potential for handling 4.5 million TEUs and should be operational by 2014.

Another milestone was the agreement that Europe Container Terminals (ECT) and the CKYH alliance--which includes COSCO Pacific, K-Line, Yang Ming and Hanjin shipping lines--signed to develop and operate Phase 1 of the new Euromax Terminal in the Port of Rotterdam. The Euromax Terminal is currently under construction close to the ECT Delta Terminal in the Maasvlakte area of the Port of Rotterdam, while Phase 1 of the Euromax Terminal is expected to be operational in 2008.

Port of Amsterdam is another European gateway that has come into focus. In 2006, the Amsterdam port area--which consists of the Ports of Amsterdam, IJmuiden/Velsen, Beverwijk, and Zaanstad--handled 85 million metric tons of cargo--up 14 percent from 2005.

The Port of Amsterdam accounts for the lion's share of the growth--transshipment in Amsterdam rose to 64 million metric tons last year, a 20 percent increase. A major contribution to the container growth came from the Ceres Paragon Container Terminal, which set a new record in transshipment with a total of 3.5 million metric tons (a 380 percent increase) in 2006. The fast growing NYK-owned terminal is operating with a "ship-in-a-slip" system that allows handling activities from both sides of the vessel. Sources say that Amsterdam's high productivity may help relieve the congestion in Rotterdam.

Amsterdam and Rotterdam are heavily investing in technology to improve security and accelerate the transport and logistics flow. In Amsterdam, objectives include a general lowering of costs, faster and more efficient government control operations, and improved security.

Possibilities for cooperation between the airport communication platform (Cargonaut) and a similar platform in the port (PortNET) are being investigated to improve communication between companies at Schiphol airport and in the seaport and the government. Due to these improvements, more efficient handling of administrative and customs work is expected to result, as well as the possibility of creating a customs-free zone in the port of Amsterdam.

In 2007, the Port of Rotterdam decided to expand the SaviTrak real-time information service to its key terminal locations. With Savi Networks system, Rotterdam will enhance efficiency and security for shippers, port terminal operators, and service providers by automatically tracking the location and security status of cargo containers.

The Netherlands is linked to all major European markets through a dense network of roads (78,029 miles), railways (1,745 miles), and inland waterways (3,135 miles) that keeps delivery times for cargo under 36 hours throughout Europe.

Most rail services operate from the ports of Rotterdam and Amsterdam. One of the major rail projects is the Betuwe Route, a 100-mile long, $6.03 billion, double-track, double-stack freight line between Rotterdam and Germany which is part of the Trans European Freight Rail Network. The original start was planned for this March, but due to security improvements, it has had to be postponed, likely until June. Up to 500 trains a day are expected to use this route.

Due to increased cargo traffic to and from the Czech Republic, the Czech CSKD-Intrans has launched a twice-weekly rail shuttle service directly connecting all quays in Rotterdam with its terminal in Prague; while the shipping company NYK started another train shuttle service between the Ceres Paragon Container Terminal in Amsterdam and Prague.

The city of Amsterdam tested an innovative cargo tram project this March operating right through the inner city by running on the existing tram system of the Municipal Transportation Company (GVB). Cargo tram operation will be restricted to lines with sufficient free capacity to avoid conflicts with passenger trams. The city council will decide this month whether to continue cargo transportation method.

However, the Netherlands realizes that it needs to make further investments in infrastructure to stay competitive. In its Mobility Publicity Document, the Dutch Ministry of Transport and Water Management announced an investment program between 2010 and 2020 to keep passenger and freight transport moving by increasing reliability on roads, rail, and water.

Commitment to re-investment is welcome news, according to Andrew Austin, Schneider Logistics Vice President of European Operations, "The Netherlands is an important gateway for mainland Europe and is now faced with significant infrastructural challenges," says Austin. He adds that the region is confronted with growing bottlenecks in all modes including personal mobility, airports and seaports, as well as freight movements. "This inhibits economic growth and heavily burdens foreign investment," says Austin.