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Materials handling in the Benelux
Thursday, 24 Apr 2008 ( #357 )
Special Feature
Crepa BV's headquarters in Rijswijk, the Netherlands.
The Benelux is an economic union in Western Europe that consists of Belgium, the Netherlands and Luxembourg. Christine Liew looks at this important materials handling market.

Europe’s distribution hub

The Benelux is Europe’s distribution heartland. The Holland International Distribution Council estimates over 800 European distribution centres are established in the Netherlands alone, including big names like Sony, Yamaha and Xerox. International consultancy Cap Gemini recently surveyed 100 leading European companies and subsequently designated the Netherlands, Belgium and Germany as the top three countries with the largest number of European distribution centres.

This makes sense when one considers the region’s central location in Europe, advanced infrastructure, highly skilled and multilingual workforce, developed logistics service sector and pro-business government policies on customs and taxation.

Also, the region is home to the Port of Rotterdam, one of the world’s largest ports and in 2007, the first European port to break through the 400 million tonnes cargo throughput barrier, with 406 million tonnes loaded and unloaded, 6.4% more than in 2006. In unit terms, Rotterdam handled 10.8 million TEUs last year. Amsterdam Schiphol Airport, a major logistics hub, is close to Rotterdam. The Port of Antwerp in Belgium, also a leading port in Europe, fiercely competes with the Port of Hamburg for second place after Rotterdam. These main entry points are close to the important consumer markets of Germany, France and the UK.

Forklift leaders in the Benelux

Leading global forklift manufacturers have carved their niche in the Benelux and industry insiders say newcomers will be hard-pressed to penetrate the well-established market.

Lex Knol
Lex Knol, the managing director of the Benelux’s exclusive Hyster dealer, Barloworld Intern Transport (Nederland), says the region’s standing as Europe’s distribution base benefits the materials handling industry.

"The materials handling market profits from this strong logistical position over the entire range. Reach stackers and container handlers are needed in ports and intermodal terminals. Warehouse equipment is needed in the many European distribution centres for both domestic and foreign companies. Additional counterbalanced product demand is also generated by these logistical activities," Knol says.

Rogier van der Hoeven from Crepa BV, the exclusive Caterpillar forklift supplier for the Netherlands, says Jungheinrich, Still, Linde and Toyota are leaders in the market.

"Most firms like to go for the bigger brand names," he says, adding that Caterpillar is also doing well in the Benelux. Crepa claims its forklift rental fleet, comprising 4,500 units, is the largest in the Netherlands.

Koen Lisman from Lisman Vorkheftrucks BV, the sole Benelux wholesaler of used equipment to the international market, says the leading brands in the Benelux are the "same as all over Europe".

Martijn Nanning, the managing director of Geveke Intern Transport, Amsterdam, a wholesaler and importer representing Hangcha forklifts, estimates BT as the frontrunner with a 22% market share followed by Linde (15%), Jungheinrich (14%), Still (11%), Toyota (7%) and others (31%).

Knol says Toyota and BT became strong players in the warehouse and counterbalanced markets after the two companies merged. He calls Jungheinrich a "very strong household name" in the warehouse sector and an organisation with the know-how and products to provide complete warehouse solutions. Linde is perceived to offer good prices and reliability while Still is strong in the warehouse and electric counterbalanced markets, he notes, adding that Hyster, which his company represents, offers a solid 24-hour service operation and a full range of forklifts.

Eastern European forklifts and associated suppliers are virtually non-existent in the Benelux, while industry sources estimate the total market share held by Japanese, South Korean and Chinese forklift manufacturers at less than 15%.

Solutions, not just forklifts

The Benelux forklift market is not expected to grow significantly this year and industry insiders say forklift companies need to move from being product sellers to solutions providers if they want to remain competitive.

Chris Mathijs from Manitou BNL says the biggest challenge facing materials handling companies is gaining market share and maintaining existing business levels.

"Competition makes this (keeping customers) difficult but companies can try to get new clients by offering good service through a solid organisation," Mathijs says, adding that other strategies include improving forklift quality and enlarging the product range.

Manitou BNL is a subsidiary of Manitou Group of Ancenis, France that imports Manitou rough-terrain and industrial forklifts and distributes them via 23 Benelux dealers. It claims to have over 90% market share for rough-terrain forklifts in the Benelux but is new in the industrial forklift market, having entered it in 2006.

Mathijs concedes that leading forklift manufacturers may have difficulties making "huge improvements" to their product offerings and believes that for them, "the future is in service contracts and rental, the possibility of offering short-term interim contracts for a machine with driver".

Van der Hoeven estimates a flat market or growth of 1-2% for this year and says 2007 was exceptional because most forklift suppliers invested heavily in their short-term rental fleets.

Nanning agrees that the focus in the Benelux market is shifting from mere forklift selling to offering materials handling solutions.

"They try to have long-term contracts with customers and focus on service mainly. The customer likes to outsource his entire forklift fleet and pay by the hour he uses or even rent the truck with driver."

Van der Hoeven says besides offering a one-stop shop for customers, forklift companies wanting to stay on top need to identify small forklift customers with potential to grow into major accounts.
"There is a need to keep a database with all the necessary information of potential customers as up to date as possible [through] telemarketing and database maintenance."

Knol says customer needs are changing as non-core activities [like materials handling] are increasingly outsourced to gain efficiency and advantage over competitors.

"Most are aware that changing the company mindset from product orientation to customer orientation is needed [but] achieving and managing this transition is not an overnight task," he explains.

Emerging forklift brands

While companies from China, Japan and South Korea join hordes of non-Europeans in choosing the Benelux as a base for their European distribution activities, their forklifts have had little impact on the region’s market.

Koen Lisman
Koen Lisman, whose family-owned company claims to have over 1,600 used forklifts - the "largest selection of used forklifts in Europe" - available for sale, says there was a high demand for Japanese forklifts in the Benelux but the last 20 years have seen European OEMs gain market share.

Lisman says Japanese forklifts have been present in the Benelux for over 40 years and lead the South Koreans (15 years) and Chinese (5 years) in market share. Lisman stocks Japanese forklifts, but not Chinese forklifts.

"[Chinese products] are practically only available new and we don’t offer new trucks within the EU markets. Also we doubt the sustainability of the market strengths of the Chinese suppliers as they offer little continuity from an after-sales and spare parts perspective," he says.

Nanning cautions newcomers trying to enter the mature Benelux forklift market.

"Many newcomers have died because of lack of focus on after-sales. They all try to make money with selling the units first."

Knol, meanwhile, says South Korean and Chinese forklifts are growing in popularity.

"By no means have they become market leaders, but we see them getting slightly more successful in the ‘price purchase’ deals. There are still customers who rate buying price more important than cost of ownership."

Knol says price-conscious customers now have two options – buying a used quality product backed up by good service or buying a new Chinese forklift that can be 30% cheaper than other new forklifts and risk downtime or relying on the warranty.

Chinese forklifts in the Benelux are competing with each other as well as with the used forklifts of leading brands.

Nanning believes Chinese forklift imports have impacted on the used forklift market in the Benelux.
"In the second-hand market, where the Chinese products are very competitive, it is harder to sell their products. They (the used forklift vendors) have to go outside of Europe where they get less money."

Lisman agrees: "The Chinese trucks coming into the Benelux market do affect the used market value of renowned brand trucks as they are offered very cheap."

Skills shortage

Just like the rest of Europe, the Benelux is experiencing a shortage of skilled labour. This is a crucial issue for the materials handling industry as after-sales service is an important aspect of the market.

Crepa’s Van der Hoeven says the problem lies in demand exceeding supply.

"It is very hard to find employees because job-seekers can go anywhere they want and because there is more needed than offered."
Van der Hoeven’s company faced a skills shortage and has focused on recruiting car mechanics and investing in student mechanics who work for the company at their internships’ end.

Mathijs from Manitou BNL says the company’s existing service network for its rough-terrain forklifts can sufficiently deal with the newer industrial forklift market. The company regularly offers in-house training on its products.

Lisman’s company overcame the challenge by outsourcing repair work.
"We are forced to outsource repairs as later-generation used trucks can only be diagnosed and repaired by trained OEM mechanics with the necessary laptop, software and training."

Knol says it is important for organisations to market themselves as attractive employers.

"This is necessary for attracting young people and getting them to commit themselves to your organisation and the industry. You need to develop these in order to have the right amount of skilled technicians eight years from now."
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