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Aristotle University of Thessaloniki Lectures on freight : contemporary economics and policy issues Structure and strategy of freight industry Michel Savy savy@enpc.fr professor, ENPC and University of Paris 12 director, OPSTE ( www.cnt.fr ) 1. Road transport
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Aristotle University of ThessalonikiLectures on freight : contemporary economicsand policy issuesStructure and strategyof freight industry Michel Savy savy@enpc.fr professor, ENPC and University of Paris 12 director, OPSTE ( www.cnt.fr )
Interest of the topics (road haulage) • Transport production is still strongly structured according to modes, intermodal transport is limited • Dominant position of road in inland freight transport in Europe • quantitative domination • sets reference price and quality of service for other solutions • The organisation of road haulage market is an example and gives proper keys to understand all other modes • industrial economics • transport, organisation, logistics Aristotle University of Thessaloniki May 14th 2007
70,0 60,0 50,0 Rail 40,0 Road IWW 30,0 Pipeline 20,0 10,0 0,0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Modal split in Europe 1970-2004 (ECMT, 44 members, %, t.km) Aristotle University of Thessaloniki May 14th 2007
100% 90% 80% 70% 60% Inland waterways 50% Rail Road 40% 30% 20% 10% 0% CY MT EL IE ES PT DK LU IT UK FR BE FI CZ DE NL AT SE HU PL SK SI LT EE LV EU 25 Differences in modal split, within EU 27 Aristotle University of Thessaloniki May 14th 2007
Structure of road haulage • Technical specialisations • local • interurban • vehicle renting with driver • removal • Economies of scale ? • limits in vehicles size • network effects, organisation ? • Interaction between firms within haulage industry Aristotle University of Thessaloniki May 14th 2007
Average size of road transport firms in European Union NB : firms and not groups Aristotle University of Thessaloniki May 14th 2007
Road transport structure (4 criterion) Aristotle University of Thessaloniki May 14th 2007
Turnover per capita Aristotle University of Thessaloniki May 14th 2007
Investment per capita Aristotle University of Thessaloniki May 14th 2007
Subcontracting rate in turnover Aristotle University of Thessaloniki May 14th 2007
Share of investments apart from transport equipment Aristotle University of Thessaloniki May 14th 2007
Division of labour • Inside road haulage, a division of labour • no dualism, "bipolarisation" • hierarchical interaction (integration of organisation, uneven profitability) • no gap between transport and freight organisation • Freight organisation • parcel service (!) • chartering • international transport organisation (freight-forwarding) Aristotle University of Thessaloniki May 14th 2007
Share of investments apart from transport equipment Aristotle University of Thessaloniki May 14th 2007
Other criterion for classification • Statistic division only partly corresponds to actual market divisions • transhipment • type of product, size and packaging of consignment • served territory • quality of service, additional services • make or buy ? Aristotle University of Thessaloniki May 14th 2007
The "rule" of 3.10n • n = 0, from 0 to 3 kg, courrier and small parcels • n = 1, parcel service up to 30 kg • n = 2, traditional parcel service (several parcels for one consignment) and heavy parcels, up to pallets (average 300 kg) • n = 3, bulking, 1 to 3 tons consignments • n = 4, full truck load, according to type of product and of packaging Aristotle University of Thessaloniki May 14th 2007
From transport to logistics Transport and warehousing Aristotle University of Thessaloniki May 14th 2007
Tendencies • Concentration • multi specialist groups setting up • multinational • following changes in production and distribution (flexibility) • tracking and tracing, IT • transport, logistics, supply chain • Bipolarisation Aristotle University of Thessaloniki May 14th 2007
Two types of transport: market (1) and organisation (2) Aristotle University of Thessaloniki May 14th 2007
Biggest transport groups in the world (2005) Aristotle University of Thessaloniki May 14th 2007
Acquisitions of Deutsche Post AG • DHL • Securicor (UK) • Trans-O-Flex (Germany)) • Ducros (France) • Danzas (Switzerland) • Nedloyd (Netherlands) • ASG (Sweden) • Air Express International (air freight-forwarding US) • Burlington (inland parcel service US) • Exel (which bought Tibbett and Britten) • BPD (Belgium) • TNT Netlog (Germany) • ITG (Germany) • GP Paketlogistik (Switzerland) • Guipuzcoana (Spain) • MIT (Italy) • Sevisco (Poland) • Quickstep (Austria, Switzerland, Tcshek Republic) • Van Gend & Loos (Benelux) • Sernadis, Arcatime (France) Technical and commercial integration (DHL) Staff : 500 000 Turnover : 55 G€ Aristotle University of Thessaloniki May 14th 2007
Biggest groups for post, transport, logistics (2003) Aristotle University of Thessaloniki May 14th 2007
Biggest 3PL (2004) Aristotle University of Thessaloniki May 14th 2007
Biggest freight-forwarders (2004) Aristotle University of Thessaloniki May 14th 2007
Biggest shipping companies, liners (2005) Aristotle University of Thessaloniki May 14th 2007
Port terminal operators in Europe Aristotle University of Thessaloniki May 14th 2007
Biggest airline companies and airports (freight) Italiques : intégrateurs Aristotle University of Thessaloniki May 14th 2007
Specialisation / versatility of groups Aristotle University of Thessaloniki May 14th 2007
Late Hays portfolio of activities • parcel service • express parcel • transfer of funds • logistics • archiving • invoicing • equipment renting • organisation of fairs and exhibitions • staff recruitment • surveillance • real estate management • maintenance • systems of communication • services informatiques • software development • e-commerce • etc. Aristotle University of Thessaloniki May 14th 2007
Express: an unfinished globalisation CA 2003 Aristotle University of Thessaloniki May 14th 2007
Perspectives • Situation is not stable • Heterogeneous situation in Europe, some firms and countries in dominating position • Geographic strategy, European market control, enlargement • Multimodal alliances, joint-ventures, fusions ? • Continental models (Europe – USA – Japan) • integrated groups • marketing coordination of means providing companies • Worldwide alliances, global players ? Aristotle University of Thessaloniki May 14th 2007