Needs must when you're the poor relation: Portugals logistics sector

UK industry underestimates the growth potential in the Portuguese market, according to Peter Cross, director of freight forwarder Arends International, based in the Merseyside town of Newton-le-Willows.
"It is an up and coming country, but still tends to be looked upon as the poor relation when compared with neighbouring Spain.

"Sadly, Portugal misses out, because Spain is the larger market of the two.

However, from my dealings with Portugal, it is obvious that there is still a lot of good growth there and if UK companies do not quickly recognise that, then others will!" Arends has struck up a long-term partnership with Oporto-based forwarder Trevomar, resulting in increased year-on-year traffic that Cross sees no signs of diminishing.

However, while conceding that there is something of a trade imbalance, he nevertheless emphasises the strong northbound traffic in port, textiles and footwear, with some building materials and hazardous chemicals products, such as adhesives, heading south.

Goods arrive and depart mainly by road trailer, although the previous ro-ro link out of Leixoes to the UK was also another favoured mode. Accompanied trailers take three to four days between Portugal and the UK and work out much cheaper than the air freight alternative.

"Air freight tariffs out of Portugal are expensive; as a consequence we make little regular use of this mode.

However, if cargo needs to move by air then it tends to do so irrespective of price, even if this adds an extra 20% to transport costs, " says Cross.

"This is a needs-must market – for example, broken machinery needing to be repaired, or just-in-time products for the car industry.

However, by despatching products by trailer on a Friday evening, we can often get them shipped to the UK for Tuesday, which is quite time-competitive." Trevomar 's operational director José Vieira points out that his company despatches 12-15 trailers a week to the UK, which is much higher than from neighbouring Spain, where volumes fill just three to four trailers a week.

"Both the UK and Spanish markets import basically the same products, but textiles, especially household linen items, are particularly strong exports into both Madrid and Barcelona, " explains Vieira.

"Traffic is definitely on the increase. Five years ago, we only despatched full-load consignments into Spain, but nowadays we also have regular groupage services, which can combine consignments of up to 15 different exporters. In fact, in terms of groupage, we now offer regular weekly services to Benelux, Austria and Greece, in addition to Spain." Overall, Trevomar, which only began trading in 1982, has seen traffic boom in recent years. Initially, the company managed just six trailers a week, while nowadays this figure can be anything between 35 and 50, serving markets in the UK, France, Germany, Greece, Italy and the Benelux.

In addition to Europe, Trevomar also acts as a forwarder for Portuguese companies currently involved in infrastructure projects in Angola, to where significant numbers of containers and conventional cargo are being exported.

The situation with regard to Brazil is more complicated.

Despite the common language, restrictive and highly complex rules for importing equipment currently make it difficult for Portuguese companies such as Trevomar to expand rapidly into what could be a major market in the future. In fact, at the moment, Trevomar has no specific trade with the country.

As for the euro, Vieira's earlier misgivings have not been realised. "It will be a lot easier to compare prices in the future, " he notes, adding that with 200 escudos to the euro, conversion to the old currency presents no problem.

Palletline, the major UK distribution network for palletised goods, is continuing to develop its European services through the introduction of Palletline Espana. This is being operated by Framptons Iberica in Barcelona, part of Framptons Transport Services, of Shepton Mallet, Somerset.

Framptons has been active in the groupage and full load haulage sectors between the UK and the Iberian peninsula for the last 20 years, with some 15 weekly trailers covering these markets in both directions.

Following the introduction of Palletline España, Framptons decided to integrate its activities in Spain with the Palletline UK system, setting up a door-to-door palletised distribution network for one to four pallet consignments.

All parts of the UK and Spain now fall within the orbit of this service, although the main focus is on the highly industrialised area of Cataluña, which is also one of the fastest growing commercial areas in Europe.

For international trunking and domestic services in Spain, Framptons uses its own 13.6-metre Euroliner trailers, whereas distribution within the UK is administered through the Palletline network.

According to Palletline's MD Steve Hayward: "Trade between the UK and Spain is increasing substantially year on year. Current exports from the UK are €13.4bn, while imports are running at €9.6bn.

"There is now a greater call on us to provide customers with a fast twoway transport and distribution service on this route. With the existing successful presence of Framptons in Spain, setting up Palletline España was a logical move."