The logistics industry of Wallonia in Belgium has a lot to live up to. According to the Wallonia Export and Investment Agency (AWEX), the region will become the most attractive logistics hub in Europe in 2020; a bold assessment, but not one that is impossible. In fact, the logistics sector was the most buoyant among Walloon foreign investment projects during the first decade of the 21st century, creating more than 3000 jobs and attracting major investors such as TNT Airways, Johnson & Johnson, Baxter and Dow Corning, who all now have major distribution and sorting centres in the region.

A recent study by Cushman & Wakefield – a commercial real estate firm that conducts biennial research into Europe’s leading logistics locations – further reinforces Wallonia's claims of being a logistics sector leader in Europe by placing Belgium (specifically regions within Wallonia) at the top of its list. Belgium also fares well in the World Bank's 2012 Logistics Performance Index, where it jumped two places from ninth to seventh, largely on the back of its improvements in infrastructure, where the country now ranks eighth in the world.


The right place

Geographically, Wallonia could not be better placed, sitting comfortably in the middle of the 'blue banana' – an area of Europe which covers the most densely populated centres of urbanisation on the continent, and therefore tens of millions of consumers. Within three hours of road travel from Wallonia are 60 million consumers, and the region boasts direct connection to major European cities (including Paris, London, Amsterdam and Frankfurt), has a multimodal transport infrastructure, a highly skilled, readily available workforce, and, crucially, surplus available industrial land. With incoming EU grants and attractive financial incentives from the local government for new investors, the developing infrastructure is a clear sign not only of Wallonia’s logistics potential, but its intention to capitalise on it.

Set up in partnership with AWEX, the website is a sign of Wallonia’s willingness to provide an open showcase for its growing infrastructure, as well as a tool to attract investment. A promotional database of operators and available space in Wallonia for prospective investors, the website features information on the region’s 230-plus business parks, spread over 12,000 hectares. As Shane O’Neill, a research analyst at global real estate adviser DTZ, acknowledges, despite Bspace being relatively new, it is a unique and potentially successful tool. An equivalent site exists to cater for the Brussels market, which Mr O’Neill says has been a huge success, something its neighbour to the south will be hoping to emulate.

In it for the long run

Published in July this year, a DTZ assessment of Belgian industrial property shows that an impressive 80,000 square metres of logistics take-up was recorded in just the second quarter of 2012, an indication that the praise lavished on the area is delivering business. Unlike other key logistics hubs, however, Mr O’Neill says that there is a “definite trend” for businesses purchasing developments for their warehouses in Wallonia, rather than renting them. This is a sign not only of the long-term intentions of the incoming investors, but also of the success of the local government's pro-investment policies, where financial incentives are offered to enable the logistics industry to grow and reach its full potential.

According to Paul Struman, a transport and logistics specialist at AWEX, the Walloon government has provided this assistance in not only financial terms, but also through investing in training programmes and centres. He says that in the logistics centre near Liége, where TNT Airways has set up, the government has trained “something in the region of 800-plus people, free of charge”, an initiative he claims is integral to the success of the region, and of the logistics industry. “This business it a matter of people; we very much believe in that. Not only in the money but in the people,” he says.

While this has occurred after TNT first set up in the area (it being one of the first major logistics names to invest in Wallonia), Mr Struman says that for new investors, the attraction of these training programmes means that they will be able to find a specialised, trained workforce ready for employment.

Going down a storm in the port

One of the major developments in Wallonia – the Trilogiport – is indicative of another of the region's major assets: its multimodality. As Mr O’Neill says: “Nowadays, transport providers are looking for multimodal or trimodal warehouses.” While the Flanders region to the north of Wallonia boasts one of Europe’s biggest seaports in the form of Antwerp, he claims it suffers from an oversaturation of available land, and that transporters are instead shipping into Antwerp but then travelling to Wallonia to unload. Mr Struman recognises another problem faced by these ports, noting that traffic congestion has created bottlenecks not only on the roads of Antwerp, but also in Rotterdam in the Netherlands.

The redevelopment of Liége’s port, named the ‘Trilogiport’ due to it being trimodal, having three points of access to the sea through Antwerp, Rotterdam and Dunkirk in France, and boasting three trans-border markets (France, the Netherlands and Germany), is a major development set to begin work in September. A public-private partnership (PPP), the overall investment is set to be in the region of €160m, with €115m coming from private investors and €45m from the local government and Liége Port Authority.

Logistics in Wallonia – the transportation and logistics cluster set up by the Walloon government – have been instrumental in pioneering the bringing together of public and private funding for projects such as this. Working with a network of more than 240 members, their goal is to develop logistics activities, to promote the industry and to ensure innovation and progress in the field.

The focus on the region’s waterways, as Mr O’Neill points out, is integral not only to Wallonia’s logistics industry, but throughout the rest of Europe, despite the majority of transport still being conducted on the roads. With the EU looking towards a sustainable future through projects such as the TEN-T (Trans-European Transport Network Executive Agency), he says that “[the EU] wants to encourage more sustainable transport. Even though waterways are much slower than roads, they are much greener.”

With an aim of creating 2,000 new jobs and increasing the port’s container traffic substantially (estimates suggest ten times the 25,000 teu current figure), the intention is clear: Wallonia want to operate one of the most important logistics ports in Europe.

Wallonia’s logistic credentials are strong: the densest road and rail network in Europe, a steady influx of major players setting up distribution warehouses, and the available labour to operate them. With the planned future developments, the region may be in line to achieve its potential as the most important European logistics hub in 2020.

The cost of this report was underwritten by the Wallonia Export & Investment Agency. Reporting and editing were carried out independently by fDi.