Why the Netherlands is an Important Hub for Logistics? – The Background
The Netherlands, also known as Holland is a comparatively small country and is a very flat country with more than 25% lying below the sea level. The country characterized by its strategic geographic location and temperate climate is one of the wealthiest countries in the world. The country has a dense population (ranked 30th globally) and shares the border with Belgium to the south and Germany to the east. The coastline that stretches along the west and north sides of the country with a length of 451 Km and the sea transport infrastructure makes it a trade centre.
The Netherlands is one of the world’s leading exporters of Natural Gas and it is also known for exports of agricultural products. With a high density of motorways, the country’s road network is one of the densest networks in the world. The country’s flourishing economy with low tax systems encourages Foreign Direct Investments (FDI). The neighboring countries Germany and Belgium have comparatively higher tax systems leading to a favorable business environment in the Netherlands.
The country is also known for its landscape of canals, flowers and attracts a lot of tourists. Moreover, Netherlands is also known for its Inland waterway network with the total coastline length of the country including estuaries close to 1000 Km. All these factors collectively made the Netherlands as European gateway boasting the logistics market.
Why the Netherlands is still market leader? – The Present Scenario
The Netherlands have traded in its DNA. As mentioned above, the country’s lower taxes and efficient customs clearance favour the logistics industry. Also, the continuous adoption of technologies helps the Dutch to maintain its position. The Port of Rotterdam and Schiphol airport are the two major entrance points for the flow of goods in to the country.
The Dutch port infrastructure is named the best by world economic forum for the sixth consecutive year in 2017. The Port of Rotterdam, the main part of the country and the largest in Europe continent keeps its pace with technology stepping towards automation. The port authority continuously invests in developing the infrastructure in smart and sustainable manner. For instance, in June 2018, the port has signed with four start-ups for port innovation during the PortXL program, the start-up accelerator program.
The Netherlands have an agile supply chain with bonded warehouses providing Value added services. The country has the second largest cold storage capacity in Europe with a total capacity of approximately 15 million cubic meters. The growing e-Commerce market and outsourcing of logistics demand more warehousing space with integrated logistics services. The logistics stock has increased to 30.5 million square meters in 2017.
The constructive government approach towards trade is also responsible for the country having stable growth in the logistics sector. The Neutral Logistics Information Platform (NLIP) is a data sharing platform developed by the Dutch government to make the country leading in Europe logistics sector by 2020.
Focus Shifting Towards the Development of New Logistics Hotspots:
Due to the rising demand, the investments in the logistics real estate sector are growing rapidly and the vacancy has been decreasing. The investment in the logistics market of 1.9 billion USD in 2017 was mainly dominated by the foreign investments. Apart from the main logistics centres such as Moerdijk, Tilburg, Rotterdam, Venlo, and Schiphol, the focus of the investors is shifting towards the development of new logistics centres. The places such as Utrecht, Nieuwegein, Hoofddorp, Born, Noord Brabant, and Limburg are drawing the attention of the investors.
How Brexit is going to Effect the Dutch Trade?
The exit of the United Kingdom (UK) from EU is expected to have a significant impact on the Netherlands and may result in an increase of costs. Additionally, non-tariff barriers are expected to be introduced on goods and services. According to a study by Netherlands Bureau for Economic Policy Analysis (CPB), the Brexit could run costs up to 10,000 Euros which is 1.2% of the Netherland’s GDP by 2030. The customs authority is expected to have huge traffic with the cost increasing delays and obstacles.
The exports to the UK accounts for 3% of the Netherland’s nominal GDP (the goods manufactured in Netherlands – 1.4%, Services – 1.2%, Re-exports – 0.4%). The UK is the third largest trading partner of Netherlands and the exports of the goods to the UK generated a revenue of USD 45.4 billion in 2017 and remained almost the same as that of 2016. The re-exports grew by 0.5% and the Dutch origin exports decreased by 1% when compared to 2016. However, the exports of services increased by 7% in 2017.
The Netherlands logistics market cost in 2016 stood at USD 64 billion that accounts for 8% of GDP, according to the analysis by industry experts.
About the Netherlands Logistics Market
The Netherlands Freight & Logistics Market is expected to grow at a steady pace during the forecast period (2018 – 2023).
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