Penske Logistics Europe

Coevorden and Roosendaal, Netherlands
October 7, 2003
By
Richard Armstrong

Key Personnel:
Erik van Egmond, Managing Director – Europe
Henk Wijnbergen, V.P. Sales
Joe Gallick, S.V.P. Sales

To enter the European market, Penske bought a trucking company, Transportgroep van der Graef in 1998. The company had limited revenues, 800 customers and a lack of supply chain management expertise.
Rather than trying to be all things to all people, Erik van Egmond has focused the operation on 30 core customers, providing them a host of logistics solutions including complete supply chain management. The customer list includes Royal Ahold (the largest Dutch supermarket operator) Daimler Chrysler, Detroit Diesel, Sunbeam, Scania, Proctor & Gamble, Evian, Merck SD and Resolution.

For Royal Ahold, Penske operates 60 dedicated contract carriage units making direct store deliveries during daytime hours. At night the same units are used to pick up from suppliers.

For Merck, Resolution, Dunlap, Evian and others, Penske does pure transportation network management. Solutions for transportation management customers involve extensive engineering and i2-based solutions. Van Egmond points out that customers aren’t very concerned about what the software is as long as the solutions are good!

One of Penske’s best solutions is for GE Medical Systems. For GEMS, Penske manages a supply chain involving x-ray scanning mammography machines. In 1998, the gap between the CTP order date and the delivery date was too long for GEMS. More visibility was needed from suppliers to the manufacturer.

Penske instituted an ASW inbound supply chain management system with kanban delivery. Once the machines are made, Penske picks them up at the end of the production line and delivers them to customers. In addition, Penske purchases the parts from suppliers and manages all inventory levels. The parts become GEMS’ at time of delivery to the assembly line. In summary, GEMS receives the order, makes the machines and collects the money. Penske manages all of the supply chain pieces.

Penske also manages European supply chains for IAMS and Detroit Diesel. The Detroit Diesel operation involves collection of parts from vendors throughout Europe, followed by forwarding to North American manufacturing locations.

For its other customers, Penske does value-added warehousing work like kitting, vendor managed inventory, dedicated contracted carriage, dedicated transportation capacity management and intermodal (rail and water services).

Penske’s European transportation management center is in Maastricht. This center manages transportation systems for Europe including longhaul operations. This center utilizes the same technology which has been employed effectively in North America.

Penske uses its campuses at Coevoerden, Venlo and Roosendaal as launching pads for services to different parts of Europe. Roosendaal serves France, Italy and the Iberian Peninsula. Coevoerden services Northern Germany and Eastern European locations. Venlo handles Central Europe. The sea and air NVOCC and forwarding operations are coordinated primarily from Roosendaal and through the port of Antwerp.

Van Egmond notes that there are significant obstacles to transportation management in Europe. There is no Sunday truck traffic allowed in France, Germany, Switzerland and Austria. In addition, the Germany is working to implement an electronic highway toll system (Maut) which will be very expensive (10-19¢ per kilometer). In addition, railroads do not always match up well from country to country. Those in Spain actually have a different gauge.

Despite those challenges, Von Egmond and his team are experiencing 20% growth this year. About one-third of this growth is from new business.