When a region or city is already a sector leader, the pressure is on to maintain that position. In Hessen, local authorities and business are collaborating on a series of logistics industry initiatives that will ensure that the region remains a global leader in the field. 

Logistics firms in the region are full of praise for Hessen. In fact, 15 of the top 100 logistics companies worldwide are based in the region, including Amazon, Schenker Logistics, SEKO Logistics, FedEx, TNT, UPS and Lufthansa Cargo.

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Its advantages include its central location in Germany with easy access to all European markets. This comes with a first-class transportation infrastructure, including Germany’s largest international airport in Frankfurt, terminals for tri-modal cargo handling, and Europe‘s densest and most central highway and rail network. It also offers a secure investment climate and a wealth of highly trained professionals, as well as being a top location for research and development that can boast the fewest annual average strike days in Europe.

Tarek Al-Wazir, Hessen’s minister of economics, energy, transport and regional development, says: “We have the necessary square footage, qualified professionals and favourable conditions for logistics investments here. And with Frankfurt Airport, Hessen also offers connections to the global airline network, which few other regions in Europe can boast. That is why service providers who distribute their goods all over the world have based themselves here.”

Big opportunities

Some of the big names to have set up a logistics base in the region include Kühne+Nagel, which has a 16,000-square-metre distribution centre in Groß-Rohrheime, Bergstraße; SEKO Deutschland, which operates its German headquarters in Frankfurt’s Cargo City; Hermes Kogistik Gruppe, which operates the largest transportation hub in Germany covering 100,000 square metres at Friedewald, Hersfeld-Rotenburg; and DB Schenker, which has its 25,000-square-metre headquarters and air cargo hub at Cargo City.

Ingo Steves, managing director at Gazeley Germany, is a fan of the region. He says: “Due to its outstanding transportation infrastructure, the availability of highly qualified employees and its central location in Germany, Hessen is one of Europe ́s best locations for logistics.”

Volkswagen is the latest big name to expand its operations in the region with plans to establish a second logistics centre in Volkmarsen, about 27 kilometres north-west of the town of Kassel. The car manufacturer has had a base in Hessen since the 1950s and its largest parts distribution centre is in the town of Baunatal, in the Kassel district.

VW’s latest investment decision will benefit the entire region, not just the logistics hotspots of Kassel and Bad Hersfeld. Its expansion is welcomed by local mayor Hartmut Linnekugel, who says: “We are pleased that the city of Volkmarsen is now also part of this positive development in northern Hessen.” The main economic development organisation for Hessen state, Hessen Trade & Invest, reports that for VW the deciding factor in its choice of location was the rail connection offered by Volkmarsen. The organisation says: “North Hessen is a beneficial business location for any company wishing to access the world market, with the best cut-off time for Germany via its easy highway access and being in the middle point of the railway network’s north-to-south high-speed route.”

Regionally important

The logistics industry is vital to Hessen. Four out of 10 of its largest employers are logistics firms and the sector employs 200,000 locally. “[The logistics sector] also offers jobs at all qualification levels,” says Mr Al-Wazir. “It is therefore an important employer whose strength we want to preserve. At the same time, the challenge is to reduce the burden on people and the environment caused by the business.”

The region has put its money where its mouth is when it comes to logistics. In 2013, it created the House of Logistics and Mobility (Holm) centre of excellence for logistics with backing from investors including the City of Frankfurt and the State of Hessen.

“With the Holm, Hessen has a research institute that will supply new ideas and concepts for 21st century mobility and logistics,” says Mr Al-Wazir. “I am expecting this to significantly boost the development of the industry, making it more efficient and reducing its environmental impact.”

The Holm is a hub for interdisciplinary and applications-oriented project work, research and training. Based at the Gateway Gardens complex at Frankfurt Airport, it provides about 20,000 square metres of space for colleges, companies and other institutions to get together to network, research and train.

It also runs the Holm Forum, which showcases the centre’s ideas and projects. The forum provides a platform for firms from the automobile, aerospace, transport, freight and IT sectors to join with economists, social and political scientists, and engineers to discuss interdisciplinary approaches and share innovative solutions and concepts.

Logistics cluster

The logistics cluster in Frankfurt Rhein-Main puts firms close to Germany’s leading airport. These firms also have access to trimodal facilities at Frankfurt port and the Hoechst industrial park with access to road and rail transport. The cluster is at the centre of the German and European road network and provides easy access to all major European seaports, including Rotterdam and Antwerp, as well as to the Black Sea with its 250-plus logistics companies. Firms also have easy access to the Holm and Cargo City Frankfurt, Europe’s largest air freight hub, which operates thousands of direct flights a week to destinations worldwide plus 230 cargo-only flights to 78 destinations in 40 countries. It also operates its own freight station in Cargo City South.

North Hessen’s logistics cluster is home to a number of distribution, contract logistics and transportation centres. Because of its central location, firms based here can be in any place in Germany within five hours, meaning it has the shortest cut-off time for next-day deliveries in the country. It offers six first-class commercial sites for logistics, while the Logistics Academy in Bad Hersfield provides university-level education and on-the-job training.

Its 750,000-square-metre Freight Village (GVZ) in Kassel is one of the country’s most high-tech logistic sites. It is also part of the area’s largest industrial park, Kassel-Fuldabrück-Lohfelden. According to GVZ Kassel, UK logistics and distribution market leader Gazeley recognised the benefits of locating in this area very early on, and decided to construct its Magna Park logistics site at GVZ. Large parts of the area are currently used by the Baunataler Volkswagen original parts centre. Numerous other companies, including logistics specialist DHL as well as freight forwarders, distribution centres and parcel services, have decided to take advantage of the excellent local infrastructure.

Companies such as Amazon, supermarket chain REWE and Germany’s leading book wholesaler, Libri, have set up bases in North Hessen to take advantage of the area’s large distribution warehouses. These have been planned and built in line with an innovative traffic management concept, which takes into account the quickest possible access to the road and rail network. According to Hessen Trade & Invest, quick uptimes and local expertise ensure that companies can move their premises to North Hessen virtually overnight.

Cutting the congestion

Hessen Trade & Invest reports that in the region, new technologies and innovative concepts are created to improve the mobility of people and goods – in terms of transportation and job creation. Great emphasis is put on supply-chain agility and management.

One of the challenges for a region that has been so successful in attracting investment is how to maintain traffic at a manageable level. The Traffic-free Hessen 2015 initiative was launched by the Hessen Ministry of Economics, Transport, Urban and Regional Development in 2003 with the aim of improving traffic management flow. It is achieving this goal through the rollout of innovative traffic telematics, intelligent information systems and modern traffic management techniques that can change how a road is used in response to driving conditions, such as by using temporary hard shoulders and dynamic information signs. According to the authorities, it has been successful, with congestion on local highways reduced by 80% since 2003.

The initiative focuses on three core mobility topics: future technology, traffic management and mobility services.

Heart of action

The stats about Hessen make for impressive reading. Hessen Trade & Invest says the region is at the centre of European markets, providing access to 504 million consumers within the EU. Of these, 35 million are within a 200-kilometre radius of Frankfurt. And all major European cities can be reached from the area within 2.5 hours.

According to 2013 figures, Frankfurt Airport handles 57.5 million passengers and 2.2 million tonnes of air freight a year and offers more than 4400 direct flights a week to more than 300 destinations worldwide. With these passenger and air freight figures, Frankfurt Airport is ranked among the top 10 airports worldwide. It is home to 107 airlines that fly to 295 destinations in 107 countries, including 356 weekly connections to North America, 491 to the Middle East and Far East, 2221 to western Europe, 633 to eastern Europe and more than 600 domestic connections.

The airport also hosts a rail-air cargo station at Cargo City South and the continent’s largest airfreight centre, Cargo City Frankfurt, which is home to 280 companies employing 10,000 people.

“Frankfurt Airport is Lufthansa Cargo’s home airport,” says Lufthansa Cargo’s CEO Carsten Spohr. “This is the heart of the intercontinental air freight transport system and it offers us everything we need: it is located in the heart of continental Europe, has superb infrastructure, important strategic partners and major industries nearby.”

Impressive infrastructure

The region’s inland ports are also a key part of its transportation infrastructure. Its ports on the rivers Rhine and Main are part of Europe’s most important waterways network offering connections to Rotterdam and Antwerp in the north and to the Black Sea via the Main-Donau-Canal.

The largest port is Frankfurt am Main, which handles more than 2 million tonnes of goods each year. There are also trimodal facilities in the ports of Frankfurt and Frankfurt-Höchst offering water, rail and road transport connections. The Port of Frankfurt-Höchst has recently been expanded and upgraded to improve transport links and cargo handling, and it now boasts the latest high-performance gantry cranes.

The Berenberg City Ranking 2013 states that Frankfurt is the most accessible city in Germany. The region is home to Frankfurter Kreuz, Europe’s busiest highway junction. It also offers direct connections to Germany’s high-speed rail network, with 340 long-distance and 290 regional trains passing through Frankfurt Main Station every day.

Education and culture

With 80 universities, research institutes and schools of higher education, Hessen is a centre of excellence in science, medicine and engineering boasting a high proportion of international students. 

Logistics education, training and R&D are provided locally by the Academy for Logistics Bad Hersfeld; North Hessen Berufsakademie; Frankfurt’s Holm; the Frankfurt am Main University of Applied Sciences; the University of Kassel; the European Business School, International University, Schloss Reichartshausen; and Darmstadt Technical University. According to Hessen Trade & Invest, there are about 215,000 students currently studying logistics in the region.

Hessen Trade & Invest also states that 745,000 people from 180 countries live and work in the region. It is home to about 12,500 international companies, including 1150 US companies as well as 99 consulates and 60 foreign chambers of commerce. It is well equipped for expat living, with 13 international schools, 27 international kindergartens, 180 international business and cultural clubs, plus international theatre and movies. It hosts the headquarters of the US armed forces in Germany as well as representatives of several US states, including North Carolina, Iowa and Florida.

There is plenty to do during downtime in Hessen. Throughout the state there is a broad range of museums, theatres and sporting grounds providing many opportunities for sport and recreation activities. The region offers good shopping opportunities too. And for more cultural or historic pursuits, it is home to six Unesco World Heritage sites; is the homeland of fairytale collectors the Brothers Grimm; and is the birthplace of writer Johann Wolfgang von Goethe. Major events that take place in the region include 'documenta' – the world’s most important exhibition of contemporary art – in Kassel; Rheingau Music Festival; Museumsuferfest in Frankfurt; International Bad HersfelderFestspiele; Deutsches Jazzfestival in Frankfurt; Wolkenkratzer Festival in Frankfurt; plus additional events such as ironman and ski-jumping competitions.

Support available

Hessen Trade & Invest offers cost-free services to support executives throughout their decision-making process, site selection and establishing of a subsidiary in Germany. It also offers business location information; comprehensive consultation on site and real-estate searches; support with company formations; a contact network and introduction to experts in corporate and tax law; information about work and residence permits; contacts with institutions, industry networks and services; and personal attendance for resettlement processes.

“Our transport infrastructure is a good foundation for future growth,” says Mr Al-Wazir. “Not only do we keep our roads in order but we also pilot and use state-of-the-art technology to improve transport efficiency. We still have enough well-developed areas where we can create more distribution centres. The growing volume of container transport, in particular, provides local ports and train stations with excellent opportunities.

“However, we need new ideas so we can do all this with [fewer carbon], fine dust and nitrogen oxide emissions. I am relying on the Holm to provide solutions. I am convinced that it will strengthen the attraction of Hessen as a location if we improve the energy efficiency of the transport of people and goods, making it more environmentally friendly as rising energy costs become an increasing burden on the logistics industry.”