Germany’s Logistics
Nerve Center

hen an area lands a major logistics project from a leading global retailer, site location experts take notice. Germany's North Rhine-Westphalia has logged at least three such projects in 2010, most recently from Amazon, which will open a 60,000-sq.-m. logistics center in Werne that will employ 800. TK Maxx, the European subsidiary of U.S.-based retailer T.J. Maxx, announced it will build a 70,000-sq.-m. distribution center in Bergheim, near Cologne. And fashion company Esprit also announced plans in recent months for a European distribution center in the German federal state. These companies join more than 21,000 other logistics enterprises, making the state the leading logistics location in Germany. Why?

North Rhine-Westphalia has several advantages of interest to those moving goods in and out of Europe, not the least of which is a population density that serves as both end market for goods and labor source. (TK Maxx's operation will create about 1,000 jobs.) Nearly 18 million people live in North Rhine-Westphalia, and almost 150 million live within 500 kilometers of the state capital Düsseldorf — that's a third of the EU's consumers and about 45 percent of its purchasing power.

But population alone doesn't make for a logistics powerhouse like North Rhine-Westphalia. It takes a few other attributes, such as these:

• The densest rail network in Germany. High-speed trains such as the Thalys or ICE provide fast connections to Brussels, Paris, Amsterdam, Berlin and Basel. North Rhine-Westphalia also occupies a leading position in goods transport with its own close-knit network and its strong regional, port, industry and works railways. DB Schenker Rail and over 50 other companies cover around three billion ton-kilometers every year on the rail tracks of North Rhine-Westphalia. The transshipment station Cologne-Eifeltor is the most important terminal for combined transport (CT) in Germany. Numerous other CT terminals throughout the state form major interfaces in the rail network of North Rhine-Westphalia. The Ruhr region is linked directly to the seaport of Rotterdam via the new stretch of Dutch freight transport track known as Betuweroute.
• The intersection of important European waterways. North Rhine-Westphalia has no coastline, but links to the major European seaports are well established; 226 kilometers of the Rhine, Germany's most important waterway, flow through North Rhine-Westphalia. Each year, 120 ports on the Rhine and canals handle around 133 million tons of cargo by ship. Duisburg port, the world's largest inland port, handles around 80 million tons of goods every year.
• Two large international airports. Düsseldorf International and Cologne-Bonn Airport, and other airports with European connections, link North Rhine-Westphalia to all major domestic destinations and to economic centers all over the world. High-speed trains bring travelers to the European air hub Frankfurt/Main Airport in less than an hour. As a UPS regional hub since 1986, Cologne-Bonn Airport plays a particularly important role in air cargo. It is now Germany's second-largest cargo airport after Frankfurt am Main. Over 560,000 tons of freight take to the skies from Cologne each year. "We value the central location in North Rhine-Westphalia with its good infrastructure, which allows fast connections with short drives and flights to the customers," says Hans-Werner Gabriel, UPS director of Cologne Airport operations. "This is why we set up our first branch in Europe here over 30 years ago — the foundation stone for our 6,000 employees in North Rhine-Westphalia and 40,000 in Europe today. We are pleased to be part of the Rhine-Ruhr region and, not least due to the extension of the night flight permit for Cologne-Bonn Airport issued by the state government of North Rhine-Westphalia, we want to continue to grow, to invest and to create jobs here."

How Universities Prime the Labor Well

Logistics operations are electing to expand in North Rhine-Westphalia — like UPS — or establish new operations because they can readily find the workers they need to be competitive. Today, being competitive in the logistics arena means not just moving goods more efficiently, but offering specialized services across the supply chain. These include packaging and labeling, invoicing and goods provision, order-related assembly of sub-components and end products and even call centers. And the state's universities play a central role in supplying companies the workers with the required skill sets.

There are 11 different courses of study, including three at private universities, geared specifically to the logistics industry in North Rhine-Westphalia. In many fields of study, logistics is a discipline in its own right. This includes, for example, container construction in mechanical and structural steel engineering. Specialist logistical knowledge is also required in nautics, i.e. the steering of container ships.

The focal points of the logistics courses offered in North Rhine-Westphalia are varied, from a logistics diploma in the field of technical logistics to a master's degree in the physics of transport and traffic. Besides the University of Dortmund and the University of Duisburg-Essen, the European University of Applied Sciences Brühl in the Rhine region offer courses of study in "Logistics Management." The dual studies combine theory and practice at an early stage. A semester abroad is an integral part of the course, ensuring that students gain international experience. The University of Logistics and Economics in Hamm offers courses including "Industrial Engineering in Logistics" and "Logistics Management." At the University of Neuss for International Economics, students can earn a Bachelor of Science in "Logistics and Supply Chain Management."

Regional Logistics Specialties

North Rhine-Westphalia's logistics sector is so advanced that it has centers of expertise around the state that may help determine which location is most suitable for a given enterprise. Following are some examples:

The Cologne/Bonn region: one of the logistical core regions and particularly strong in trade and chemicals logistics; home to Germany's most important combined cargo transshipment center and second-most important cargo airport (Cologne-Bonn);

The Duisburg Lower Rhine region encompasses Duisburg and the Wesel and Kleve districts. Apart from the Rhine which acts as the artery for this region (ports from Emmerich through Wesel to the world's largest inland port in Duisburg), logistics contractors for a wide range of tasks can be found here; the University of Duisburg-Essen has established the Center for Logistics and Traffic;

The eastern Ruhr region including Dortmund, Unna and Hamm, is the logistical heart of German trade logistics and is home to Europe's most important research institute for logistics, the Fraunhofer Institute for Material Flow and Logistics (IML);

The central Ruhr region (Herne, the Recklinghausen district, Gelsenkirchen, Bo-chum, Ennepe-Ruhr district) is a preferred location for last-mile logistics. At the very heart of the Ruhr region, first-rate distribution can be operated from the sites here;

The central Lower Rhine region (Neuss, Krefeld, Mönchengladbach) has established itself as a location for leading logistics service providers and is a pioneer in textile logistics;

The Münsterland region offers logistics sites with good transport links and is particularly strong in the food industry, mechanical engineering and vehicle construction sectors. The region is the gateway to the Ruhr region and the bridge to the Netherlands. (The city of Bocholt in Münsterland emerged as winner of the competition "Logistics Location of the Year 2009 in NRW." Bocholt is home to leading logistics companies including Kühne+Nagel, Fiege, Duvenbeck and the WM Group);

The Bergisches Land region is of particular importance in terms of transport logistics due to its location between the Cologne-Bonn and Ruhr regions;

The Aachen region is not only interesting logistically because of its proximity to Belgium and the Netherlands — with RWTH Aachen University it is also home to a leading research and development center;

The Sauerland and Siegerland regions are among the most important locations for mechanical engineering in Germany and thus an important source of logistical added value; and

The Ostwestfalen-Lippe region is one of the most prospering regions in the state of North Rhine-Westphalia. The furniture industry, the food industry and in particular the SME sector make this region a special location for logistics companies.

— edited by Mark Arend

This investment profile was prepared under the auspices of NRW INVEST Germany GmbH. For more information, visit www.nrwinvest.com or call 49 (0) 211-130 00 0.