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H.Essers – Train Terminal

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In order of Mr Buurman Noor al Husni 0797177 IBMS 330 1. Introduction 2. Background information 2. 1 History of Centrum Transport Romania 2. 1. 1 Some milestones 2. 2 The company now 2. 2. 1 Organizational structure 3. Current train-terminal 3. 1 General information 3. 1. 1 Location 3. 1. 2 Organizational structure 3. 1. 3 (Un)loading trains 3. 2 SWOT-analysis 4. Competition 4. 1 Do the competitors (have plans for) transport by train? 4. 2 Competitive advantage 4. 2. 1 Costs road transport from Genk to Oradea 4. 2. 2 Costs train transport from Genk to Oradea 4. . 3 Other (dis)advantages – Rail VS. Road 5. Conclusion & Summary 6. Recommendations 7. Resources 3 4 4 5 6 6 7 7 7 8 9 10 11 12 13 13 14 16 17 18 19 2|P age 1. Centrum Romania is one of the main logistics providers on the Romanian market in the design and delivery of advanced supply chain solutions.

It is the Romanian branch of Centrum Group Europe. In 2005 Centrum Group Europe was taken over by the Belgian logistics and transport provider H. Essers Groep. In this research the reader will be provided with detailed information about H. ssers Groep, its background information, current train terminals, how to improve, the best solution how to deal with competition and several other topics regarding train transportation.

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In addition, this study also provides the advantages and disadvantages of the rail and road transportation. This study can be used in a Logistic environment although it is based on H. Essers and the area where it is located – Romania. The researcher is analyzing these environments and the outcome of this research will be given to Mr Buurman. “Established in 1928, Groep H.

Essers has grown into the largest family transport and logistics company of Belgium, with 2. 250 employees, spread over 26 branches in 12 European countries. ” “Groep H. Essers offers customers personalized and integrated transport and logistics solutions through Europe. ” 3|P age Centrum transport was originally a Dutch company, founded in 1976 by Mr. Jan Daris, in Valkenswaard (NL). In 1992 the decision to expand to Eastern Europe was made, they rent an office in Oradea and founded Centrum Transport S. R. L. In 1996 the company bought a territory of 30. 000 m? n Oradea. Three years later, in 1999, the building of warehouse 1 in Oradea started and in the same year Centrum Expeditii S. R. L. and Centrum investitii S. R. L. were founded. In 2001 Centrum logistics S. R. L. was founded and one year later warehouse 2 was build in Oradea. In that year they also purchased 48. 000 m? territory in Oradea. In 2004 the building of a warehouse in Bucharest started (Cefin logistics park). Also in this year, Centrum Transport bought 15. 000 m? to build the 3th warehouse in Oradea. In 2004 Centrum Transport was taken over by H.

Essers Groep, a family-owned, Belgium company that offers transport and logistic solutions through Europe. 4|P age 1928 • Henri Essers establishes a transport company in Eksel (B) • Noel & Jules join their fathers company • Start Transport combined with logistic activities in Tessenderlo • Belgium investment company GIMV takes over 40% of the shares • Move headquarters to Genk • start direct rail connection to Novara (Italy)/ establishment Essers Italia • Fam. Essers takes over the 40% shares that GIMV invested in 1990 • Take-over Superliner Cargo/ establishment Air Cargo Logistics (zaventem) 976 • Jan Daris establishes a transport company in Valkenswaard (NL) • Foundation Centrum Transport S. R. L. in an office in Casa de Cultura (RO) • purchase of 30. 000 m? territory in Oradea • foundation Centrum Expeditii S. R. L. & Centrum Investitii S. R. L. • Start builing warehouse 1 in Oradea • foundation Centrum Logistics S. R. L. • Start builing warehouse 2 & purchase of 48. 000 m? territory in Oradea • Start building warehouse 1 in Bucharest/ warehouse 3 in Oradea/ purchase 15. 000 m? 1958 1992 1983 1996 1990 1999 1995 1999 1999 2001 2001 2002 2002 2004 2004 • H.

Essers Groep takes over the Dutch family-owned company Centrum Transport • Centrum Transport 100% taken over 2005 2006 • Start direct rail connection to Oradea (RO) & Halkali (T) 5|P age Centrum Romania has its headquarters in Oradea and represents a group of companies under the Centrum name. All companies are independent business-units, with own specialized staff members and personnel. Centrum Romania has now branches in Oradea, Bucharest, Ploiesti, Sibiu, Roman and Timisoara. The company offers the ‘full package’ of logistic services; transport, logistics, distribution, customs and intermodal transport via the rail.

Centrum Romania is part of Centrum Group Europe which was in 2005 100% taken over by H. Essers Groep. This company is now the greatest family-owned transportand logistics company in Belgium, with 26 branches over 12 European countries. Board President Noel Essers Audit Comite CEO Ivo Marechal Transport Logistics Communicatie / Marketing Legal IT Purchase Finance HR Buildings 6|P age The current train terminal is a terminal owned by IKA, located in Oradea. Centrum Transport is not the only company that (un)loads its train there, but it is the biggest client of that terminal.

When the train has arrived at the terminal, the train will be checked by IKA and the documents by the employees of Centrum Transport. After that the train has to be ‘cut’ into three pieces, because the train is too long for the 200m railway in the terminal. The train comes from Genk in Belgium and arrives in the South-East of Oradea. On its way the train has to stop several times at the borders for changing locomotives, and in Budapest it has to stop for putting a diesel-locomotive in front of the train (It is not possible to come to Oradea with an electric locomotive).

Further, the train has to stop a couple of times, just for the simple reason that there’s another train on the railway. 7|P age On this map of Oradea you can see that the head office of Centrum Transport Oradea is located at the other side of Oradea. Six employees are directly related to the train terminal. At first, Catalin and Ovidiu, who arrange the documents of the loads on the train and who manage everything that has to do with the train. These employees are working in an office on the terminal. Next, Raul, a planner who manages that the loads on the train will be going to the unloading-address.

He is working on the Centrum head office in Oradea. There are also 3 truck-drivers directly related to the terminal. These employees take the chassis to put the containers on and make the trailers ready for the next driver who brings them to their unloading-address. There are always two out of the three yard-drivers working. 8|P age Train terminal Planning Arranging documents and managing the train Yard-drivers Raul Ovidiu Catalin 3 drivers Normally 3 trains with loads for Centrum Transport arrive and depart every week. The arrivals are on Monday, Thursday and Sunday. The departures are on Tuesday, Friday and Saturday.

On one train are approximately 20 containers. There is no minimum load on a train, since the train has to get back to Belgium and Centrum Transport has its focus on long-term relationships with their clients. Luckily the imports and exports are quite balanced. The maximum quantity containers on a train is 35, because then the train will be around 600m (including a 30m locomotive), which is the maximum allowed length for a train. Also, the total weight of a total train cannot exceed 1100 tons. When loading or unloading a train, a reachstacker takes the loads of the chassis and puts them on the wagon, or vice versa.

A reachstacker is a mobile, heavy machine that is used for loading , unloading and moving containers. 9|P age Strenghts • Excellent transporting link • Little threating competition • Skilled West-European workforce • Loyal to customers Weaknesses • Trains must be splitted before entering the terminal • Not located next to the headoffice • Half of the terminal is concrete, the other half is mud • Machinery not up-to-date • Rented premises (adding extra costs) • No space to put the containers on the terminal, so extra chassis needed • Old terminal Opportunities Good financial position of the company creates the possibility to invest in the train terminal • increase spending powers in the local economy • having own trains • profit margin will be better • moving into new attractive market segments Threats • Rising costs of wages • increasing competition from international companies • technology factor • Legislation could have an impact • Competitors can have access to the same terminal • loosening of regulation 10 | P a g e In today’s business environment it has never been more important to know how to compete against competition. As H.

Essers is a transportation company it has many competition, the researcher has made a detailed research with three multinational and two national companies which will give a wide idea on this subject. Keuhne Nagel chooses to transport by train for their good rates. When the company has more than 10 containers to ship it to another country it will be through train as it will be most sufficient for them, although it depends on the distance and amount as Keuhne Nagel also has the availability of sea – and other transportation. The company transports goods world-wide, but mostly in Europe and Middle-East.

The company does not have their own terminals as they find it very costly to own one, they are having more benefit under freight forward contracts. The disadvantage what Keuhne Nagel faces by transporting by train is the fact that if having more than 10 containers ready-to-go that perhaps the platform for loading will not have enough platform, so they will need to rent an additional port and will be charged by container, also known as demurrage. When the train departure from port has the possibility to lose a container on some rail stations – some places do not update the system.

In this case they prefer to have another port fees like detention. Until the rest of the wagons will arrive on the railway station, the arrived wagons will be charged for parking cost at the station (perhaps two or three days wagons must wait for a different train). The level of stress by rail transport is higher than other transportations. Not to forget that within rail there can be a lot of unexpected costs. 11 | P a g e Schenker AG is a German logistic company and a subsidiary of Deutsche Bahn, the German railway company.

It is responsible for land, sea, and air transport and contract logistics. In short the Deutsche Bahn is the biggest operator in the European Union and is divided into three main operations groups: DB Bahn, DB Netze and DB Schenker. These subsidiaries are companies in their own right. Schenker chooses to transport by train as they are a part of the Deutsche Bahn and are number one in the rail way transportation in the European Union. They also have the necessary infrastructure what is needed in Romania. The company transport from all over the EU to Romania, it s doing more import than exports. They also have their own terminals in Romania, the location are in Oradea, Curtici (Arad), Cluj, Iasi, Galati and Bucharest. 12 | P a g e In order to be successful, it is of great importance to know the market, which includes also the competition. For H. Essers and other companies competition can be either direct or indirect. In the direct way, competition can has the same product or service for the same market. While indirect competition means the competitors have the same product or service, but in a different market. Competition: Open market rivalry in which every seller tries to get what other sellers are seeking at the same time-sales, profit, and market share by offering the best practicable combination of price, quality, and service. Where the market information flows freely, competition plays a regular function that keeps the demand and supply in balance” (Business dictionary) “Competitive advantage: Superiority gained by a firm when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation.

Competitive advantage results from matching core competencies to the opportunities. ” (Business dictionary) The km-cost price is a cost price based on the salaries, the costs for the truck and the trailer or chassis with container and the costs of reparation, tires and diesel. The cost price does not include road and toll charges. Romanian driver: 0,714 €/km Belgium driver: 1,063 €/km 23% 34% 4% 15% 2% Truck Container Salaries Driving 52% 21% 49% 13 | P a g e In the pie charts there can be found the composition of the different cost prices per km.

The cost-price per km is higher in Belgium/ Holland compared to Romania, which is mainly caused by the salaries. The length of the route from Genk to Oradea is circa 1. 600 km. Thus, the costs for one trip driven by a Romanian driver will be €1142,40 , while the costs for the same trip driven by a Belgium driver will be €1700,80. Don’t forget these cost prices are still excluding the road and toll charges. The costs to transport one container or trailer from Oradea to Genk (or vice versa) are calculated to be €800,-. This cost price is based on minimal 50 containers or trailers for one-way trips in one week.

When this standard is not met, the cost price per container or trailer will raise quickly. Costs per container in Euros 900 800 700 600 500 400 Total costs in Euros 90000 80000 70000 60000 50000 40000 300 200 100 0 50 60 70 80 90 100 30000 20000 10000 0 50 60 70 80 90 100 Transporting by train is definitely cheaper than transporting by truck for H. Essers. Since the standard of minimal 50 containers is always met, the cost price for transporting a container from Oradea to Genk (or vice versa) by train is €800,-, while the cost price for transporting that same container via the road is €1142,40 or €1700,80, without road and toll charges! 4 | P a g e When shipping freight or transporting machinery, one of the decisions that must be made is whether to ship by rail or truck (leaving other transportations out). Selecting a cost effective method of transport is important, but there are also other factors that needs to be taken into consideration. There are advantages and disadvantages to both shipping by truck and shipping by rail depending on the distance, destination, volume and type of goods you deliver. By evaluating the needs and priorities, there can be determined whether transporting by truck or by rail is the best option.

RAIL TRANSPORT Rail Freight is usually most energy-sufficient VS. ROAD TRANSPORT More flexibility and convenience Potential delays Shipment is frilage or prone to damage (carrying the container from the train to another type of transportation) Truck transport offers more options than rail transport, such as TruckLoad (TL) and Less than TruckLoad (LTL) Rail transport is usually smoother than truck transport A lot more routes are available, is not restricted to fixed tracks Rail transport is growing in Romania Pollutes the environment Environment friendly 5 | P a g e Trains are going over long distances Good roads in most countries, and they keep being improved Operate on a predetermined schedule If having a priority on costefficiency, this can vary depending on your shipment, but truck transport is relatively costeffective (road-tax, etc) Lower chance of accidents Greater size limits, a train can transport heavier en larger loads than a truck Just-in-time deliveries Big advantage of multimodal transport Congestion Driving in the weekend without restrictions Restrictions to cross some countries (e. . Austria, Switzerland) Bad connections between the railway companies from different countries Restrictions due to weight 16 | P a g e Background information Centrum Transport was originally a Dutch company, founded in 1976. In 1992 the decision to expand was made and they rent an office in Oradea and founded Centrum Transport S. R. L. In 2004 Centrum Transport was taken over by H. Essers Groep, the greatest family-owned transport- and logistics company in Belgium, with 26 branches over 12 European countries.

The current terminal In 2006 H. Essers groep decided to start a direct rail connection from Genk to Oradea. Every week three trains arrive and depart from the current terminal in Oradea. The main weaknesses of this terminal are that the train must be splitted into three before entering the terminal, it is an old terminal with machinery which is not up-to-date, it is not located near the head office in Oradea and there is not enough space to put containers on. Does H. Essers gain a competitive advantage with their transport by train?

Competitive advantage is superiority gained by a firm when it can provide the same value as the competitors but at a lower price, or can charge higher prices by providing greater value through differentiation. H. Essers Groep can provide the same value (goods transported from A to B) as their competitors at a lower price (compared to the companies that don’t transport by train), since the costs for the train are low compared to the costs for trucks. H. Essers Groep does not gain a competitive advantage through differentiation, since there are a lot of companies transporting from Belgium to Romania by truck and/ or by train. 7 | P a g e After completing this research, we can assuredly conclude that there are two best options for H. Essers Groep to locate their terminals. One of the options is to build a terminal in Crisana (Oradea, Arad). This conclusion is first of all based on the fact that the road and rail infrastructure is satisfying in that area. The other advantage is that there is already a warehouse established in Oradea and having that, there will be no need to build one – no extra costs on this part. The third advantage is that H.

Essers does not need to replace their workplace and resources. As the area of Arad has good connections for deliveries and transporting in the south of Romania. The other best option to implement a terminal will be in Walachia (Bucharest). This is based on the fact that there is already a good road infrastructure established in Walachia and it will be improved as they are building 5 highways in that area, (which 4 are connected with Bucharest). In Bucharest are a lot of H. Essers’ clients established, this means that import to Bucharest is much higher than its export.

Implementing their terminals in Bucharest will lead to less empty kilometers. At this stage, the rail transportation options are not optimal, however when H. Essers will decide to build their terminal in Walachia, they can establish a much more suitable connection between West-Romania and Bucharest. To buy or hire a terminal has both its advantages and disadvantages. Building one can be very profitable for H. Essers, however it will also enlarges risks. To contract a terminal won’t be as profitable as building one, however with this option there will be a lower risk.

If H. Essers wants to be more profitable we advise them to choose building a terminal, but if they want to play it safe – without a high risk, the best option will be for them to contract a terminal. 18 | P a g e http://www. essers. com/ http://www. centrumtransport. ro/ http://www. businessdictionary. com/ http://www. romaniatourism. com/ http://www. tramos. ro/parcauto. html http://www. delamode. ro/main. php? c=ro&page=international_services http://www. kn-portal. com/industries/ http://www. northernireland. ov. uk/news/news-drd/news-drd-october-2009/news-drd-081009road-and-rail. htm http://www. etcproceedings. org/paper/modelling-road-and-rail-transport-in-the-short-termapplication-and-results http://www. dmoz. org/Business/Transportation_and_Logistics/Trucking/Truck_Transport/Comp anies/Europe. htm http://ec. europa. eu/transport/road/index_en. htm http://www. logisticsworld. com/loglink/Trupage. htm http://www. morebusiness. com/running_your_business/businessbits/finding-location. brc 19 | P a g e 20 | P a g e

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H.Essers – Train Terminal. (2018, May 04). Retrieved from https://graduateway.com/h-essers-train-terminal-essay/

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