John McCloud is editor of Industry Property Journal, from which this article is excerpted.

Paris—Although the UK is the largest employer in Europe's distribution network, a new survey commissioned by the Paris office of Capgemini Consulting Services and Denver-based ProLogis shows the Netherlands is the region's most sought after location for distribution centers, with Belgium and Germany close behind. Bert Angel, senior vice president for global services Europe at ProLogis, says the Netherlands and Belgium have a relatively large number of distribution centers compared to the size of their populations because of their proximity to the major demand markets, good transport infrastructures and access to two of Europe's largest international ports, Rotterdam and Antwerp. Germany, meanwhile, benefits from centrality, a large population, two major ports and superior transportation infrastructure encompassing road, water and rail networks.

Two-thirds of the European land devoted to distribution facilities is located in the Netherlands, the UK, France and Germany. However, the report indicates the future may look quite different because of several anticipated changes. They include consolidation by merging networks and reducing supply chain costs, complexity and numbers of distribution centers; increased regional distribution to take advantage of opportunities in Eastern European markets such as Poland and Romania and reducing the impact of higher transport costs; and adoption of strategies such as the outsourcing of logistics, leasing property, shorter lease contracts and flexible warehouse space.

In regard to individual distribution sectors, the report says high-tech and electronics companies prefer to locate distribution centers in the Netherlands, Germany and France, using centralized locations and minimal space. Food and beverage companies favor the Netherlands, France and Belgium, but lean toward decentralized operations and smaller centers. Consumer products companies have made France the favored location, with Belgium a distant second. The life sciences and pharmaceutical companies, on the other hand, maintain highly decentralized distribution networks with many relatively small national distribution centers.

Capgemini vice president Roy Lenders says one of the survey's most significant revelations is that logistics departments, rather than other executive divisions, are often responsible for making strategic supply chain decisions, at least in large companies. The report is based on a survey of more than 100 supply chain leaders in a wide range of industries conducted in the second half of 2006. The goal was to give a high-level overview of the pan-European distribution footprint over different industry sectors and address key challenges per industry sector. In all, the survey evaluated 300 distribution center locations, 18,000 full-time equivalents in the realm of employment and 2.4 million square meters of distribution center surface area.

Instant Insights /

Survey: Netherlands Top Distribution Site

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