28 augustus 2013

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West Brabant the most popular region for logistics companies

Since the year 2000 there has been a great deal of superregional relocating by the major logistics companies, and there have been no signs of that slackening since the end of the boom years. In total 123 large distribution centers (an average of nine a year) have moved to a different region or been newly set-up in the Netherlands, and Brabant is gaining greatly with over 40% of these centers located in one of its four regions. Meanwhile, up to 10% of the regional growth in jobs in the province is due to the new logistics companies. These figures have emerged from a study conducted by the Stec Groep into strategic commercial relocations in the Netherlands. Since the turn of the century their database has been monitoring the choice of locations by large companies (with a workforce exceeding 50) when relocating over an extended distance (over 25 kilometers).

Only one in ten distribution centers are new to the Netherlands
A mere 10% of logistics companies setting up shop in Brabant are newcomers to the Netherlands (in other words, a foreign company that is opening its first outlet in the Netherlands). This means that the dynamism we are currently seeing is almost entirely due to companies already established in the country that are expanding their investments (by constructing a new distribution center, or merging or moving it). Moreover, the logistics companies’ customers in turn tend to be new arrivals to the Netherlands.

Industries that are seeing or starting to see a high frequency of relocating logistics centers are transport (30%), the food, drink and tobacco industry (20%), consumer electronics (12%), and clothing and textiles and life sciences (both at 7%). The biggest among these are DHL, CEVA and VOS Logistics, but companies such as Aldi, Lidl and Heineken also opened regional distribution centers.

Labor-intensive logistics – 150 jobs per company
In spite of the low-employment image of the sector, the superregional relocation of logistics equates to labor-intensive activities, and since 2000 this dynamism has created 18,500 jobs, 7,000 of which are in Brabant. This means 120 jobs in the province for each center with an average floor space of 24,000 m² and a site of around 15 acres – an average of 10 jobs per acre. In West Brabant superregional relocations have been responsible for 10-12% of total employment growth since the turn of the century, while in other parts of Brabant it has made up 5% of new jobs. The upshot of this is that logistics companies have proved to be a significant contributor to employment in the Dutch province.

A major increase in scale, with great demand for large sites
The average size of a distribution center that is relocated over a large distance has steadily increased from 21,000 m2 of floor space in 2000 to an average of 27,000 m2 today. This growth is set to continue in the next few years as a result of mergers, amalgamations and the growth of e-logistics. The Stec Groep currently regularly identifies companies that require a great deal of space – over 25 acres – and there are only a handful of locations that can accommodate these.

Brabant: the perfect logistics location
A total of 54 logistics companies have housed themselves in Brabant since 2000 (44% of all Dutch logistics companies), thus demonstrating that Brabant is indeed a perfect logistics site. Companies opt for Brabant due to its excellent location (between two international ports), outstanding accessibility – by boat, plane, truck or train – and the fact that the province has embraced the logistics industry as a key economic area of focus. Officials long ago laid out the red carpet for industry players, and that has become a decisive factor in an increasing number of relocation choices. The province has proved to be particularly attractive to European distribution centers, and some 90% of those that have relocated this century have moved south of the Rotterdam-Venlo axis.

Within Brabant itself, the regional differences are dramatic. West Brabant is the clear winner with 35 new centers, followed by Central Brabant with 12 and North-East Brabant and Eindhoven making up the rear with four and two new distribution centers respectively. The prime logistics focal points are Borchwerf (Roosendaal/Halderberge), the Moerdijk industrial park and Vossenberg in Tilburg. Other locations in places such as Tilburg, Roosendaal, Waalwijk, Oss and Bergen op Zoom have also become magnets for logistical service providers.

An increasing dichotomy expected
The Stec Groep expects this market dichotomy to increase in the near future, as well-founded locations and regions continue to draw new logistics centers while the places with little to offer and lacking strong logistical assets will miss the boat. The locations with plentiful sites, access by different means of transport and adequate options for construction (particularly construction height) come out tops – the new Moerdijk logistics park and Vossenberg-West (in Tilburg) locations as well as sites in Roosendaal, Waalwijk, Oss and Bergen op Zoom. Vacant buildings in less attractive locations are less likely to be occupied and are generally not considered as an alternative to a new building, as is demonstrated by historical figures.

The importance of access to a location by multiple means of transport is also increasing, and the majority of logistics companies consider access by road, river and/or rail to be a major factor in choosing a location. In this it is not the distance to a terminal that is crucial, and only a handful of logistics companies have their own docks or rail terminals. The Stec Groep believes that in the next few years the flow of goods will be increasingly concentrated around a few inland hubs, such as Moerdijk, Tilburg, Bergen op Zoom and Oss – places that are becoming the most attractive for new logistical set-ups. After all, the distance to a terminal influences a company’s use of it, and if the distance becomes too great (more than 15 kilometers), then the benefits of multimodal transport cease to exist.

E-logistics and medical/healthcare are the biggest growth industries
The nature of freight is changing, says the Stec Groep, with the rise of e-logistics creating a demand for alternative logistics sites, sometimes closer to the sales market and the consumer. For the province of Brabant this equates to greater logistical opportunities, even though it means smaller distribution centers or pick-up points that focus on e-fulfillment. The Stec Groep expects that the major international companies will continue favoring West and Central Brabant in particular.

The study has determined that the most promising industries for Brabant are medical/healthcare, agricultural produce and maintenance. Apart from the robust aspects already mentioned for establishing a company in Brabant (its location, accessibility and the welcoming attitude of officials), the historical presence of these industries – and the knowledge, suppliers and customers they offer – is the biggest motivating factor for that growth.

For more information,  please contact Peter van Geffen (p.vangeffen@stec.nl). Phone +31 26 751 41 00.