Profile: Europa European Express
We're an express operator with a freight forwarding ability," says Malcolm Smith, MD of
Europa Worldwide Services. It is a potent combination which saw turnover grow by 6% to œ52m (E58.8) last year. And the judges in the IFW Freighting Industry Awards 2001 were sufficiently impressed by some of the recent initiatives going on across Europa to give the
company the Express Operator of the Year title a couple of months ago. Subject of a management buyout last year, Europa was launched back in 1975. Its strength was road
distribution until the early 1990s and, although its sea and air freight departments are growing fast, this remains the linchpin of the operation. Of 6,000 international shipments
made per week, 5,000 are by road.
Europa's UK distribution division meanwhile doubled its office space and trebled its
yard space last year to cater for the fast growing volumes of traffic delivered around the
UK on pallets.
A founder of the Palletline co-operative seven years ago, Europa is the second biggest member and moves more than 1,650 pallets a week over the network on a next-day or 2/3 day basis. Clients include well known names in footwear, food products, stationery, tiles, tools and the packaging industry
The company puts a lot of effort into communication and its tariff guides are among the best you will find. If you want to air freight 100kg to Port Moresby or send a pallet next day to Aberdeen, charges are clearly set out with maps and delivery zones. "Our
customers have the right to know exactly how much they they are paying for their express freight services," says Smith.
Transporting a consignment from A to B at ratecard price is only part of the picture, however. Europa has built a presence in several key warehousing, logistics and distribution markets including fashion, automotive, electronic goods, music, pharmaceuticals and cosmetics. Where required, the company brings in industry specialists who understand the quirks of each business and can work closely with customers on their own terms.
Fashion customers include both manufacturers and retailers for example, Burberry clothes are distributed to France and Italy as well as to selected outlets in the UK.
For TK Maxx, Europa picks up garments from a number of sources within Europe and
distributes them to retail outlets across the UK. They go first to a dedicated 4,000 sq
metre high-security facility in Kent, 6km from Europa's Erith headquarters, and are
redistributed to store within 24 hours of the client requesting delivery.
Pre-retail services for another leading fashion brand, NafNaf, include unpacking consignments, checking for correct size and colour, labelling and tagging if the retailer requires, and bagging for delivery in shelf-ready form. Europa also carries out some reverse
logistics for Naf Naf while the main requirement for Base, the Italian shoe manufacturer, is quality control checks and relabelling. The goods are and packed from store when the client is ready for delivery. Europa has offices in Belgium, the Netherlands and Ireland employing
almost 400 people. It has interests in Italian, Swedish and Norwegian franchises but employs agents in other countries.
The company sold its French operations to the management a year ago and also sold its offices in Germany, where the company is now represented by agents.
"You can't control the world," Smith says. "Germany was not profitable and the fact that we had our own offices closed doors to work from other companies. It's now our biggest market, with 1,200 import and export shipments every week."
But the proximity of the Benelux countries and the end-to-end control made possible by operating its own offices there has led to a number of distribution contracts. Europa distributes toys from Belgium to a national UK chain, labelling the products and transporting them in special bins which suit the retailer's own racking.
Long shelf-life cakes and other food lines from the Netherlands are picked, packed and restacked to UK requirements for two supermarket groups.
In the automotive field, Europa collects Vauxhall parts from vendors in Switzerland, Austria, Hungary and the Benelux countries and consolidates them for the UK. Its network
is ideally suited to this kind of work, says Smith. "The problem comes when you have to collect a full load from only one point. That brings you up against other types of players."
There is a two-way automotive flow, with parts from UK manufacturers supplied to car plants in Germany and Spain.
A niche has developed over the last year in music and multimedia, which has grown
over the last year from 50 to 300 consignments a week. Europa stores, handles and distributes tapes, CDs, videocassettes and DVDs. UK-based customers can request a collection at up to 2pm and next-day or second-morning delivery is possible into the main markets of western and central Europe. Around 180 consignments are imported into the UK each week and Europa is fast building this into a global business, establishing relationships with importers beyond Europe in countries such as the US and Mexico.
In its early years, Europa operated a hub-and-spoke system through London and
Birmingham. But the move towards express services and growing hub congestion has led to the development of a "mini-hub" concept over the last year or so at Manchester, Bristol, Bathgate and Heathrow. "We only go through the main hubs on days when there is a time-definite requirement and the local hub is not offering a direct connection," says
Smith.
Europa claims the most extensive express network of any primarily road operator and is thus competing mainly with the integrators. Next-day service is offered to Dublin and to major destinations in France, Germany, Belgium and the Netherlands, with 48-hour service to additional locations in these countries plus the main cities of Denmark, Norway, Sweden, Spain, Portugal, Italy, Switzerland and Greece.
Other hauliers "are very good in pockets," Smith says – "but we are more flexible. We will work to client's schedules. They don't have to fit to our own."
He cites women's fashion retailer Morgan, which requires collection in Paris at 5pm and delivery in London by 7:30am next morning.
It was inevitable, given the extent of Europa's network and the growth in time-definite delivery, that the company would introduce a premium next-day service and it duly did soin March 2000. "We were getting a lot of business from courier companies, so we created our own courier business," says Smith.
Traffic is placed with four or five established UK wholesalers to ensure overnight delivery to major destinations across Europe, with cut-offs up to 8.30 pm.
Now being promoted heavily is a remail service through which Europa takes mail out to European sorting centres on behalf of foreign postal administrations and brings back mail for the UK post office.
While much of the company's recent service expansion has been through agency agreements, that is no problem so long as the right reporting systems are in place, Smith emphasises.
Attention is now turning towards eastern Europe. Europa plans to introduce services to Poland, Hungary, the Czech Republic and Russia. "It's a fringe market for many operators," says Smith. "We won't be offering anything different from the opposition, but again we are clearly setting out our offer."
He is budgeting for a 6% increase in turnover again this year, but is optimistic it
could reach 8%. Despite the massive consolidation that has taken place in logistics over recent years, Smith is happy to be a medium-sized player – albeit one with a claimed customer base of 65,000.
His strategy is simple: a wide range of products and services, aggressively sold
both internally and externally. "Developing existing clients is easier than finding new ones," says Smith. "The sales guy on the road knocking at doors is gone.
"But there is no customer loyalty any more, so you've got to open more doors than
are closing on you. You have to compete with the biggest players who are hungry for market share. And we believe we've got products that can match or beat them."
