The logistics DNA of the Netherlands: a 3PL-friendly country

A market expected to reach $65.99 billion by 2030: the logistics and freight sector is one of the cornerstones of the economy of the Netherlands, which is also known as ‘the gateway to Europe’. A market massively preempted by 3PLs. To explain the Dutch model and its specific features, we take a look at the logistics anatomy with Jan Heijblom, Senior Sales Executive for BENELUX at Exotec, and himself a native of the land of tulips.

The Netherlands: Identity card of a country ‘built for logistics’

Due to its geographical and environmental factors, as well as its infrastructure, the Netherlands is a relatively fertile ground for the movement of goods: 

• Population: 17.8 million. For Jan Heijblom, ‘you could almost talk about a city, and that makes logistics efficient.’ 
• Surface area and population density: 41,500 km2. With an average population of 424 inhabitants per km2, its very high population density is an important identity marker (the country ranks 33ᵉ in the world in terms of population density). 
• Rail and road traffic: No mountains to cross, making it easy to build and use road and rail infrastructure.
•  Maritime traffic: Rotterdam, Europe’s largest port, provides a river link between the North Sea and the rest of Europe, via the Rhine and Meuse rivers. It is also the 10ᵉ largest port in the world (the top 10 being Asian ports, led by Shanghai). Of note: the port of Antwerp, in Belgium, ranks 12ᵉ worldwide and plays an important role in Dutch logistics due to its geographical proximity. 
•  Air traffic: Amsterdam’s Schiphol airport is 3ᵉ on the European podium for freight traffic with 1,559,000 tonnes, behind Paris-CDG and Frankfurt am Main.

Factors conducive to 3PLs

Other countries that are geographically close, such as Belgium and the UK, also experience a high prevalence of 3PLs. However, a combination of factors sets the Netherlands apart from its neighbours: 

• A regulatory context: the regulatory context is pushing players to outsource logistics management to transport and storage specialists: the 3PLs. In addition, since 2000, all infrastructure projects have had to undergo a socio-economic assessment before they can go ahead (OEEI programme). This strategy is now combined with strong decisions on the environmental front. From 2019, the Netherlands will no longer be building any new roads or rail lines, and is paving the way for a new supply chain in line with climate concerns. 
• A culture of social dialogue: ‘Labour relations are based on negotiations rather than directives’. A social climate that gives the country a head start, particularly when the global context is unstable.
• An openness to the outside world: the tax advantages granted to foreign companies make the country even more attractive.

‘All of the above make it relatively easy for foreign companies to start operations in the Netherlands and distribute their products from here.’

The Netherlands and 3PLs: a business that’s been going strong for over 400 years

3PLs and the Netherlands have a history that goes back several centuries. If you’ve never heard of the VOC or Verenigde Oostindische Compagnie, the name East India Company may ring a bell. Founded in 1602, it was not only the first 3PL company in the Netherlands, but also the oldest public limited company in history, with shares listed on the stock exchange. ‘At the height of their success, their value was as high as the current GDP of Germany, France and the UK!’ explains Jan Heijblom.

Netherlands VS World: who are the leading 3PL providers?

The characteristics of the 3PL model

What are the 6 characteristics that make up the DNA of 3PLs? 

• Cost: a 3PL, as a specialist, optimises costs at all stages of the supply chain.
• Acceleration: in a context of growth, using a 3PL service provider facilitates access to new markets in which you are not yet established.
• Speed: an external logistics service provider guarantees competitive delivery times.
• Accountability: costs, directly linked to orders and order lines, are more visible. The result is greater transparency for the entire supply chain.
• Expertise: companies using a 3PL logistics solution can concentrate on their core business.
• Scalability: rates, calculated on the basis of order lines, adapt to volumes, and therefore to seasonal variations. ‘Fewer transactions = lower costs’, explains Jan Heljblom, ensuring greater flexibility in the event of economic ups and downs.

3PLs and their warehouses

The logistics of a retailer or manufacturer are comparable to those of a 3PL, with one major difference, which Jan Heijblom notes: ‘Whereas a manufacturer uses its warehouses and optimises the available space in the best possible way, a 3PL goes further: it sells this space to its customers.’ A business in its own right!

These considerations are prompting 3PL players to take a close interest in the commercial value of their storage space: ‘If you have a 14-metre-high warehouse, you can sell 14 m³ of storage space to customers using just 1m². Having tools that allow you to exploit the height and volume of a 3PL warehouse are crucial differentiators’. 

Especially during a period of growth: ‘In Europe, the 3PL sector is growing at an annual rate of 2.6%’, concludes Jan Heijblom. A figure to be cross-referenced with e-commerce growth, of the order of 10.5% in 2023 in France (2.35 billion transactions), which augurs further growth for 3PL logistics!

Taking inspiration from the 3PL model: strategic avenues for supply chains to consider

Based on the example of the Netherlands, where the 3PL model predominates, what strategic directions can be envisaged to support the growth in demand? Optimisation avenues can be found throughout the supply chain, with a common denominator: warehouses.

• Transport: Multimodality, last-mile management: rethink transport on a local scale, to adapt to the infrastructure of each region. And locating its warehouses in places that limit the number of kilometres traveled and facilitate flow management.
• Storage: Optimising the configuration of its warehouses, in particular through high-density storage and robotisation. To improve their capacity and performance, anticipate their obsolescence, but also improve working conditions for warehouse staff and deal with labour shortages.