European logistics operators target Italy
The Italian market has proved to be the focus of considerable attention from leading European logistics companies over the past few weeks. In addition to the acquisition of consumer logistics specialist Cappelletti by Exel (TI Briefing 11/11/03) TNT, Schenker and Kuehne & Nagel have all substantially extended their operations in the country.
Schenker Italiana has developed a land transport terminal in Peschiera Borromeo south of Milan. The new 5,000 sq m facility includes 48 loading ramps and is situated adjacent to its air freight depot and trade fair operations. The terminal will considerably improve processing times and capacity for Schenker’s overland cargo operations in Italy.
Meanwhile TNT Logistics has announced two major new deals in the luxury consumer goods market in Italy. The new long term contract with accessories manufacturer Trussardi will involve national distribution, quality control and finished goods warehousing. For Giochi Preziosi, a manufacturer of children’s toys, TNT Logistics will undertake the logistics management of all its products and will be focused on a new 150,000 sq m facility in Somaglia.
Kuehne & Nagel has opened a new 24,000 sq m in Brignano Gera d’Adda, mid way between Milan and Bergamo. The company has the option of extending this up to 70,000 sq m. The facility will house K&N’s air and sea forwarding, overland freight and contract logistics operations.
The new investment in logistics operations comes even though the Italian economy is still in the doldrums. GDP is forecast to grow only by 0.4% in 2003 and by 1.6% in 2004. Retail sales are falling and industrial output was up only 1.7% in August over the same month in 2002. TNT Logistics itself has identified its Italian non-automotive operations as problematic. However whilst the economy may not be showing significant signs of recovery, many logistics companies are banking upon the potential for high levels of growth driven by out-sourcing by manufacturers and retailers. The market has to date been dominated by owner drivers (the padroncini) and extreme fragmentation. As the requirements of shippers become more sophisticated, the larger logistics companies will increasingly gain a competitive advantage over their smaller rivals, driving high levels of market growth.
