The impact of new logistics corridors in Europe
Our expert's opinion
"There’s no denying that considerable changes are both ongoing and on the horizon when looking at the logistic challenges this era brings with it. Evidence shows a further diversification of logistics solutions in terms of routing, cost-effectiveness and modalities. Take a moment to consider that freight transport (and the demand thereof) will increase by 1/5 in the coming 10 years. Are you taking the necessary action to ensure your supply chain is ready for the future?"
- Kelian Huysmans, Associate Consultant
„Blue banana” grows into a whole bunch. Eight logistics corridors in Europe until 2030
The main distribution corridor of Europe, so-called „blue banana” stretching from Benelux to northern Italy, is no longer the only one. There are new „bananas”. The key logistics corridors in the Old Continent will expand over a dozen or so years and there will be as many as eight of them.
The international consultancy firm Cushman & Wakefield reports that the main distribution corridor in Europe, due to its characteristic shape called „blue banana,” has evolved into several corridors. It’s a result of, among others, enlargement of the European Union and the emergence of new highways.
Given the growing demand for freight, analysts from Cushman & Wakefield predict that European bananas will continue to evolve. The more so that the volume of freight transport will increase by 22 per cent in the next decade. Eurostat, for example, estimated an almost threefold increase in demand for freight transport services in 2010-2050 (by 182 per cent).
However, there are also other factors that will significantly affect the logistics and transport industry. Among the most important are rising transport costs, shortage of skilled workforce and traffic congestion. In addition, the development of e-commerce and new technologies (eg, the Internet of Things and multimodal communication and transport networks), as well as issues such as Brexit, have an undeniable impact on the market.
The shape of supply chains is changing rapidly. Traditional long-distance transport is approaching a critical point. Therefore, all parties should cooperate with each other to guarantee the free flow of goods to Europe, on the continent, as well as their export,” comments the author of the report, Lisa Graham, director of research and analysis of the logistics and industrial real estate market in the EMEA region Cushman & Wakefield.
Logistics corridors are still taking shape
Lisa Graham emphasizes that Brexit and other external factors increase the pressure on entities from the logistics sector, forcing them to propose long-term solutions.
It is partly because of this that new logistics corridors are being created because the EU invests in infrastructure and new technologies all over Europe to reduce costs and increase efficiency,” Graham explains.
In the report „The Changing Face of Distribution: The Shape of Things to Come” Graham pointed out eight major logistics corridors that could affect the development of logistics in Europe.
The new logistics corridors were divided into new markets, markets of 2025 and markets of 2030. The division was made based on predictions when the corridors would be fully operational (some depend on the availability or reliability of the infrastructure or on the resolution of legal obstacles).
Eight future distribution corridors (until 2030)
- Blue banana – the corridor through which goods are brought into Europe, passing through the ports in the Benelux countries, the Rhine region in Germany and further to northern Italy. Due to the growing importance of the Mediterranean ports, this corridor may be extended in the future to Genoa in Italy;
- UK banana – as a result of UK exit from the EU, UK nautical, road and rail networks will no longer formally be part of the North Sea-Mediterranean corridor of the trans-European transport network (TEN-T) and the importance of supply chains within the UK will increase. Brexit may increase the dependence of the logistics industry on British ports;
- Irish banana – a new sea route is created between the ports of Cork and Dublin in Ireland and the ports of Zeebrugge and Antwerp (Belgium). Due to the limited capacity of the Zeebrugge port, the increase in demand for space may be recorded in nearby Belgium in Gent, and even in the Netherlands;
- Iberian banana – the availability of qualified and cheaper work force in Spain and Portugal is already attracting German automotive companies. Thanks to new railway lines and other transport connections, the volume of transport may increase in the next 5-7 years;
- Central European banana – investments in the network of motorways and rail connections under TEN-T have already increased the efficiency of distribution along the existing corridor. If it is ultimately brought to northern Italy, it can connect with the blue banana route in Bologna and Milan;
- Nordic banana – distribution within this corridor, connecting the port of Hamburg with Copenhagen and Malmö, will significantly improve after the completion in 2021 of the tunnel between Rødby and Puttgarden, which will be available for heavy goods vehicles and freight trains;
- Black Sea banana – future distribution corridor, which will be connected to the Central European „banana” after completing part of the Rhine-Danube rail and motorway network as part of the TEN-T, connecting Budapest with the Black Sea. For this reason, Romanian markets such as Bucharest can play a key role;
- Baltic banana – the growing importance of the Baltic countries as industrial locations will depend on the construction of a motorway, road and rail network under the TEN-T, which will connect this region with Finland, Poland, the Czech Republic and Germany. Significant infrastructural investments are necessary that may enable further development of this corridor in the long term.
We have planned the future logistics corridors taking into account alternative fuels and multimodal transport. In order to preserve its effectiveness in the future, road transport must evolve towards autonomy or electronic integration in order to reduce traffic congestion and improve safety,” explains Rob Hall, director of Logistics and Industrial Real Estate in the EMEA region in Cushman & Wakefield.
According to him, the development of greener road transport is not subject to any discussion. „By 2030, all major motorways will have to have stations offering alternative fuels or other eco-friendly technologies. The task of the public and private sector is to ensure that these ecological solutions are both financially beneficial and consistent,” Hall adds.